Opinion
October 20, 1992
Appeal from the Supreme Court, New York County (Elliott Wilk, J.).
In this action to foreclose a mortgage, there was no error in directing Peregrine Company, the mortgagor's managing agent which occupies space in the premises rent free, to attorn to the court-appointed receiver, and to pay a reasonable rent as set forth in the court's order. While, absent an agreement to the contrary, a mortgagor cannot be required to pay rent to a mortgagee in possession (Holmes v Gravenhorst, 263 N.Y. 148), the mortgage at issue provides that the mortgagor in default, its "associates" and "affiliates", are required to pay a "reasonable rent." Peregrine Company fits within either definition, since, by virtue of an overlapping of both corporate officers and shareholders, there is "common control" of Peregrine Company, the mortgagor, and the corporation which owns all of the mortgagor's stock. Moreover, as Peregrine Company's occupancy is an incident of its role as the building's managing agent, the jural relationship between principal and agent brings it within the definition of "affiliate" of the mortgagor. Further, a mortgagor may not contract away his right to receive rent, or lease space for a nominal rent, in violation of the lien of the mortgagee, where, as here, the mortgage contains an assignment of rents (Bank of Manhattan Trust Co. v 571 Park Ave. Corp., 263 N.Y. 57; New York City Community Preservation Corp. v Michelin Assocs., 115 A.D.2d 715, lv denied 68 N.Y.2d 604).
We have considered the remaining arguments and find them to be without merit.
Concur — Sullivan, J.P., Carro, Milonas and Kupferman, JJ.