Bennett v. Wright — 84 N.Y. Sup. Ct. 331

Majority

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Ada Bennett, Respondent, v. William H. Wright, Appellant.

Headnote

Remedy of the m/yrtgagor where a chattel mortgage is invalid or paid — answer demanding its foreclosure— enjoining the mm’tgagor.

Where a mortgagee has the right under a power of sale contained in a chattel mortgage to foreclose the same without action, the validity thereof can be contested only by an action to have it adjudged that it is null and void or that it has been paid, in which action the mortgagee may properly ask for the foreclosure of his mortgage. Pending the determination of such action the mortgagee may be properly restrained from enforcing the power of sale contained in the mortgage.

Appeal by the defendant, William H. Wright, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 21st day of February, 1894, enjoining and restraining the defendant from interfering and meddling with certain chattels belonging to the plaintiff.

This action was brought to have certain chattel mortgages given by the plaintiff to the defendant declared null and void and to have

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the same discharged and satisfied of record, and the issuance of an injunction pending the notion was prayed for, restraining the mortgagee from interfering in any way with the mortgaged property.

Abram KVmg, for the appellant.

Otto Irving Wise, for the respondent.

The mortgagee having the right under the power of sale to foreclose his mortgages without action, their validity can be contested only by an action to have it adjudged that they were null and void, or that they have been paid, as the case may be. The mortgagee can ask to have the mortgages foreclosed in this action, and on such an issue might have an injunction restraining the plaintiff from removing the property from the State or from dispersing it, to the injury of the mortgagee’s interests.

We think, under the allegations, that the mortgagee should be restrained from enforcing the power of sale pending this action, upon condition that the plaintiff be required to give an undertaking in lieu of those heretofore given, in the sum of $2,000. No costs to either party.

Order modified accordingly, without costs.

Present — Yan Brunt, P. J., and Follett, J.

Order modified as directed in opinion, without costs to either party.