Majority
Pursuant to section 1077-c of the Civil Practice Act, a proceeding was brought to compel respondent, the owner of certain mortgaged premises, to pay over to appellant, the holder of a participating interest in the first mortgage thereon, the surplus produced during the six-month period beginning March 1, 1936, and endng August 31, 1936, over and above taxes, interest and other carrying charges. The motion was denied and the movant appeals. Appellant complied with the provisions of section 1077-c in that he showed default in the payment of interest existed at the time of the application. The prime question for consideration is whether or not, during the period stated, the mortgaged premises produced a surplus over and above taxes, interest and other carrying charges. As to this there is sharp conflict; appellant claiming that an inspection of respondent’s books and records showed a surplus of $2,931.13; the respondent, that there was a deficit of $328.38. In view of these conflicting claims, proof should have been taken to determine whether there was in fact a surplus. Order reversed on the law and the facts, with ten dollars costs and disbursements, and matter remitted to the Special Term to take proof for the purpose of determining whether there was a surplus, or, in its discretion, to refer the matter to a referee for that purpose. Lazansky, P. J., Hagarty, Davis, Johnston and Close, JJ., concur.