Shotwell v. Smith

The Vice-Chancellor : This case is to be governed by the usual rule that when premises are an inadequate security and the mortgagor is insolvent, a receiver will be allowed; and if the present case rested solely on the affidavits, produced by the complainant, the court would here appoint a receiver. But opposing affidavits show also the value ; and two of these are made by persons presumed to be competent judges of real estate, namely, assessors appointed to value city property for the purposes of taxation. I consider, however, the best criterion of the value of property in the city of New York is its rental. We are not to be bound by what it would sell for. Its worth can best be known by the rent it commands from paying tenants. In this way, we can get at the value as an investment. I am of opinion that the security held by the complainant is sufficient for the payment of his mortgage debt, without, any interference with the rents through a receiver. Indeed, I consider that the court has no authority to interfere with a mortgagor’s right to the rents, unless such rents, as well as the property, have been pledged as security for the debt or there is a clear want of security. In this case, the application for a receiver must be denied.