Opinion
October 24, 1949.
In a proceeding by a receiver appointed under the provisions of section 94 Tax of the Tax Law to settle his account and be discharged, appellants appeal from an order which directs the payment of the surplus in the receiver's hands to a former owner. Order modified on the law so as to strike from the last paragraph thereof "Lynhaar Building Corporation" and substitute therefor "Betty Nelson and Samuel Katz". As so modified, the order is affirmed, with $10 costs and disbursements to appellants. When the respondent conveyed the premises to appellants, rents had been collected by the receiver. By statute, section 94 Tax of the Tax Law, those rents were applicable to the payment of arrears in taxes. Both respondent and appellants knew that the receivership was a "forcible process" for collecting the unpaid taxes (cf. Matter of City of New York [ 801-815 E. New York Ave.], 290 N.Y. 236, 241), and that the receiver was bound to apply all the rents then in his possession, or thereafter obtained by him, to the discharge of the unpaid liens. The receiver could not, and the parties did not as between themselves by agreement, free the rents collected during respondent's ownership, from the right of the collector of taxes to have them paid over. When appellants or their grantees paid the liens of record, they were not volunteers. They had the right to pay the unpaid taxes. Without such payment they could not end the receivership. Not until they made the payment was there a surplus in the receivers hands. Payment by the appellants and their grantees was a permitted performance by them of an obligation of the receivership. The appellants, with the assignment of the rights of their grantees, are entitled to the surplus. Johnston, Acting P.J., Adel, Sneed, Wenzel and MacCrate, JJ., concur.