Silver v. Kingston Realty Corporation , 114 Conn. 349 ( 1932 )

This is an action for the foreclosure of a real-estate mortgage brought to the May term, 1931, of the Superior Court by writ dated April 8th, 1931. On that day the plaintiffs sought and obtained from a judge of that court the appointment of a receiver of rents. On April 14th the defendant filed an application to revoke this appointment which, on May 12th, the court denied. On May 28th a stipulation was filed stating the amount of the debt and providing for a foreclosure by sale but containing a reservation by the defendant of the right to pursue the question of the court's refusal to vacate the appointment of the receiver. On the same day judgment for a foreclosure by sale was rendered and the defendant filed an appeal, assigning as sole ground of error, the appointment of the receiver and the court's denial of the motion to revoke that appointment. The plaintiffs have pleaded in abatement, the ground, in brief, being that the order of the court refusing to revoke the appointment was a final judgment which fixed the time within which an appeal must be taken, and the appeal, not having been filed within two weeks from the entering of the order, was not taken within the time allowed by our rule. Rules of Appellate Procedure, § 2.

The order appointing the receiver in this case provided that he should proceed to collect all rents and take all lawful steps within his power to safeguard, secure and preserve the property being foreclosed. This order, so long as it continued in force, necessarily interfered with the control of the property by the defendant, the mortgagor in possession; and it also took from it the right to collect the rents and apply them to its own use while its possession continued, and sequestered them for possible application to the payment of the mortgage debt. Kountze v. Omaha Hotel Co.,107 U.S. 378, 395, 2 Sup. Ct. 911; Astor v. Turner, 11 Paige Ch. (N. Y.) 436, 437; Schreiber v. Carey, 48 Wis. 208, 215, 4 N.W. 124; Haas v. Chicago Building Society, 89 Ill. 498, 504; 2 Clark, Receivers (2d Ed.) § 958. But, as far as the latter effect of the order is concerned, the right to receive the rent was not determined by it; should the defendant have judgment in the foreclosure action or should it redeem the property, it would become entitled to be paid the rents in the hands of the receiver; should the plaintiffs recover judgment and the defendant not redeem, the plaintiffs could only receive them on satisfying the court of their right to do so; and in either event the court would ultimately have to make an order for their disposition. All the parties concerned in the present controversy would still be before the court and the substantial rights of the parties to the rents would then be determined; and an appeal would lie from the order of the court. See Humphrey v. Gerard,85 Conn. 434, 83 A. 210. From a practical standpoint to allow an appeal from the appointment of the receiver would ordinarily stay the proceedings pending its decision; Zinman v. Maislen, 89 Conn. 413,94 A. 285; and there might follow a complete denial to the plaintiffs of a right they might have to require that the rents be applied to the payment of the mortgage debt. The appointment of a receiver of rents would not, in an ordinary case such as this, so substantially affect or conclusively determine the rights of the parties as to make the order appointing him a final judgment within the test laid down by us in Banca Commerciale Italiana Trust Co. v. Westchester Artistic Works, Inc., 108 Conn. 304, 307, 142 A. 828. We agree with these courts which deny the right to appeal from the appointment of a receiver of rents in a foreclosure action. Farson v. Gorham, 117 Ill. 137; 1 Clark, Receivers (2d Ed.) § 126.

The grounds on which the plea in abatement is based are not well taken, the demurrer to the plea is sustained and the plea overruled.

In this opinion the other judges concurred.