§ 6401.Appointment and powers of temporary receiver.

The first sentence of subd (a) of this section is derived from subd 1 and 3 of CPA § 974. Subd 2 of CPA § 974 is treated in § 5106. The notice provisions of the former law have been omitted since they are covered elsewhere. Section 2103(e) requires all papers to be served upon all parties not in default for failure to appear. It thus covers the substance of CPA § 975, which only required notice “to the adverse party” as well as the notice provisions of former rule 180 which, unless the court required otherwise, were limited to notice to the person on whose behalf or on whose application the receiver was appointed. The last sentence of the latter rule, which prohibited allowances to a receiver for expenses incurred without authorization, is omitted as unnecessary. The provision of former rule 180 for notice to other persons if the court so directs is also omitted. The court has inherent power to direct that other persons have notice before granting discretionary relief. The last sentence of CPA § 975 applied only to mortgage foreclosure actions and it has therefore been considered with the foreclosure provisions. The provision of the second sentence of CPA § 975, which permitted the court to dispense with notice where service of the summons was made by publication has been omitted. Cf. Section 2103(e). The last sentence in CPA § 974, defining “property,” is the basis of a definition section applicable to the entire CPLR. The restriction in CPA § 974, which permitted only a party to seek appointment of a receiver, has been deleted and this section permits any person having an interest in the property to make the motion. Despite the language of CPA § 974, other provisions indicated that a motion by any person interested would have been entertained. See, e.g., RCP 180. Similarly, the requirement that the property be in the possession of a third person, which property is the subject of an action, could therefore be appointed under this subdivision. Although, in the usual case persons having an interest in or possession of property which is the subject of an action would be parties to the action, the last sentence of this subdivision expressly provides for the joinder and appearance of any person not already a party. The phrase “beyond the jurisdiction of the court” in CPA § 974 has been altered to “from the state” with no intent to change the meaning, since this subdivision, like CPA § 974, is expressly limited to Supreme and County Court actions. Cf. CPA § 72.

The first sentence of subd (b) of this section is derived from CPA § 977 and RCP 175; the second sentence is derived from RCP 180; the third sentence is based in part on the second sentence of RCP 179. Although CPA § 977 was restricted to real property, this subdivision applies to both real and personal property. There was no former provision prescribing the authority that might have been given a temporary receiver of personal property. Moreover, the provision of CPA § 977 gave the court unlimited discretion. While the primary function of a temporary receiver is to preserve the property pending the outcome of the litigation, there are circumstances that will require repair, improvement or sale of real or personal property. RCP 175 applied to the receiver of a “debtor’s estate” and would thus seem to have been limited to receivers appointed after final judgment; it has been made generally applicable to receivers under this article. Unlike the former rule giving the receiver power to “sue for and collect all debts, demands and rents of the debtor” unless “restricted by the special order of the court,” this subdivision requires the receiver to receive explicit authority before exercising any such powers. Cf. § 5227 (a). The substance of the latter part of CPA § 977, “subject to the direction of the court, from time to time, respecting the disposition thereof,” is covered in the beginning of the last sentence of this subdivision, which expresses a provision implicit in the former law.

Subd (c) of this section is new. Former law required a separate order after final judgment to continue the receivership. Colwell v Garfield National Bank, 119 NY 408, 23 NE 739 (1890); Baksi v Wallman, 272 App Div 752, 69 NYS2d 208 (1st Dept 1947); Ireland v Nichols, 9 Abb Pr (ns) 71 (NY Super Ct 1870). This subdivision would allow the court to direct the continuation of the receivership in the original appointing order.

Add, L 1962, ch 308, eff Sept 1, 1963.