Haywood v. Lockwood

Woodward, J. This is an appeal to the equitable powers of the court to set aside as fraudulent and void a certain chattel mortgage on the business equipment of a hotel located at 98 Main street, Tonawanda, N. Y., and given to secure the payment of- $1,000 to the defendant George Lockwood. The complaint alleges the purchase by the plaintiff of the property in question and sets forth facts which, if established ‘ upon the trial, would entitle the plaintiff to the relief demanded. A preliminary injunction was granted upon affidavits and the defendants now move this court to vacate and set aside such injunction order. It is well recognized that 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 only be tested by an action to [33] 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 the mortgage. Pending the determination of such action, the mortgagee may be.properly restrained from enforcing the power of sale contained in the mortgage. Bennett v. Wright, 77 Hun, 331; Earle v. Gorham Mfg. Co., 2 App. Div. 460, 472. There is no claim here that the direction of the court was not properly exercised in granting the original order of injunction; no claim that the action may not be maintained, assum-, ing the facts’ to be as alleged in the complaint and affidavits of the plaintiff, and the question presented upon this motion is whether the facts, as n'ow supplemented and explained by the defendants, make it entirely clear that the plaintiff is not entitled to the relief demanded. 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 the mortgage. Pending the determination of such action, the mortgagee may be.properly restrained from enforcing the power of sale contained in the mortgage. Bennett v. Wright, 77 Hun, 331; Earle v. Gorham Mfg. Co., 2 App. Div. 460, 472. There is no claim here that the direction of the court was not properly exercised in granting the original order of injunction; no claim that the action may not be maintained, assum-, ing the facts’ to be as alleged in the complaint and affidavits of the plaintiff, and the question presented upon this motion is whether the facts, as n'ow supplemented and explained by the defendants, make it entirely clear that the plaintiff is not entitled to the relief demanded. [34] a conclusion is not avoidance of circuity, but departure from the common course not to be permitted, save in exceptional cases. There is no reason thus to accept trial by affidavits. The litigation does not appear to require unusual expedition, and it is not clear that the evidence upon a judicial trial will not further enlighten the court. Alexander Smith & Sons Carpet Co. v. Hall, 137 App. Div. 100. I take it that the granting of the present motion, like that involved in the original order, rests in the sound judicial discretion of the court (Alexander Smith & Sons Carpet Co. v. Hall, supra), and as I am persuaded that the defendants have failed to show that the plaintiff may not reasonably hope to succeed in the litigation, I feel called upon to deny the motion. However, it appears to be practically conceded that the original bondsman is insolvent, and the order may provide that the injunction be continued in force pending the trial of the action, on condition that a proper-bond, approved by -this court, be given within five days, otherwise the motion tti vacate the order be granted. No costs. Ordered • accordingly.