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S. Z.B. Corporation v. Ruth

Appellate Division of the Supreme Court of New York, First Department
Sep 27, 1961
14 A.D.2d 678 (N.Y. App. Div. 1961)

Summary

calling the appointment of a temporary receiver a "drastic remedy"

Summary of this case from HSBC Bank U.S. v. Rubin

Opinion

September 27, 1961


Order, entered on August 22, 1961, unanimously modified on the law and on the facts, with $20 costs and disbursements to the defendants-respondents, to delete therefrom each and every ordering paragraph except the first ordering paragraph which denied plaintiff's motion for an injunction; and the cross motion of defendants for the appointment of a receiver denied upon the following conditions, to wit: 1. All accrued and accruing fixed installments of rent which would be payable by the plaintiff to defendants under the terms of the lease of December 31, 1955, shall be paid into court forthwith when due and payable. 2. The plaintiff shall, within 10 days from the entry of the order hereon, pay into court a further sum of $5,000; the said sum of $5,000 to be in addition to the $5,000 heretofore paid into court by the plaintiff pursuant to the terms of the order to show cause dated August 29, 1961 granted by the Honorable CHARLES D. BREITEL of this court. 3. The plaintiff shall promptly pay when due all taxes, assessments and other lienable charges which it would be obligated to pay by virtue of the terms of the aforesaid lease. 4. All moneys and rents heretofore paid into court pursuant to the order to show cause aforesaid, dated August 29, 1961, and all moneys and rents which shall be paid pursuant to this order, shall stand as security for any recovery by the defendants in this action and in the certain action for ejectment pending against the plaintiff and others. 5. The plaintiff shall consent to the joint trial of this action with the action brought by the defendants for ejectment, waiving all pretrial procedures on its part, and consenting to the service and filing forthwith of a statement of readiness and note of issue placing this cause and the action for ejectment upon the calendar for trial. 6. The plaintiff shall, within 10 days of the entry of the order hereon, duly file and serve a stipulation, executed and acknowledged by the plaintiff, and signed by its attorney, accepting and agreeing to the aforesaid conditions. 7. Upon default in compliance with any of the foregoing conditions, the defendants, upon motion on notice, shall be entitled to the appointment of a temporary receiver; and, upon appropriate procedure in the aforesaid action for ejectment, the defendants may, upon a proper showing, have such receivership extended to moneys and rentals owing or payable to Opa Corporation, Harvard Operating Co., Inc., and Sixty Second St. Parking Corp. The appointment of a receiver pending the determination of an action resulting, as it does, in a pendente lite taking and withholding of possession of property from a party without an adjudication upon the merits, is a drastic remedy. Many times such an appointment unnecessarily adds to the cost of litigation. Clearly, the remedy is to be invoked only where necessary for the protection of the parties to the action and their interests. "There must be danger of irreparable loss, and courts of equity will exercise extreme caution in the appointment of receivers, which should never be made until a proper case has been clearly established" ( Laber v. Laber, 181 App. Div. 733). An early trial of the actions will best serve and protect the interests of the parties. ( Alexander v. A.R.Z. Corp., 283 App. Div. 656; Moses v. New York Investors, 228 App. Div. 836; Gerstein v. Teitelbaum, 273 App. Div. 886; Mester v. Morgenstern, 281 App. Div. 967.) In view of the plaintiff's offer in its affidavit to deposit in court the amount of money in controversy including all future rent as it becomes due, and in view of the fact that it does not appear that there is any likelihood of the premises becoming in disrepair or deteriorating in condition in the near future, the appointment of a receiver was an abuse of discretion. (See further, Smith v. Nannen, 231 App. Div. 234; 13 Carmody-Wait, New York Practice, pp. 396, 397, 410, 411, §§ 9, 26.) Furthermore, it was improper in this action to enjoin and restrain payments by subtenants and occupants to the sublessees Opa Corporation, Harvard Operating Co., Inc., and Sixty Second St. Parking Corp. The said corporations are not parties to this action and may not be bound by the order herein extending the receivership to cover rentals and moneys payable to them. Settle order on notice. Motion for a stay denied, the court having determined the appeal and by such determination having deleted from the order appealed from the provisions with reference to the receivership.

Concur — Botein, P.J., Breitel, Rabin, Eager and Noonan, JJ.


Summaries of

S. Z.B. Corporation v. Ruth

Appellate Division of the Supreme Court of New York, First Department
Sep 27, 1961
14 A.D.2d 678 (N.Y. App. Div. 1961)

calling the appointment of a temporary receiver a "drastic remedy"

Summary of this case from HSBC Bank U.S. v. Rubin
Case details for

S. Z.B. Corporation v. Ruth

Case Details

Full title:S. Z.B. CORPORATION, Appellant, v. JACOB RUTH et al., Respondents

Court:Appellate Division of the Supreme Court of New York, First Department

Date published: Sep 27, 1961

Citations

14 A.D.2d 678 (N.Y. App. Div. 1961)

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The moving papers are grossly inadequate to support so drastic a remedy. (See S.Z.B. Corp. v. Ruth, 14 A.D.2d…