
    Everett Greene, Respondent, v. Leander B. Faber, Individually and as Receiver, etc., of Patrick H. Flynn, Appellant.
    Second Department,
    July 25, 1913.
    Pledge — sale of collateral by assignee of pledgee — suit to restrain sale—injunction pendente lite.
    Where a pledge of stock as collateral security for the payment of a note provided that the pledgee might, at his option, sell or assign the collateral without advertisement or notice, and the pledgee assigns, under an order of the court, said note and collateral, and the assignee, after refusal by the pledgor to pay the note, advertises the collateral for sale at public auction, the pledgor in a suit against the assignee asking that he be adjudged the owner of the collateral, and that the assignee be restrained from selling the same, is not entitled to an injunction pendente lite restraining the sale.
    Appeal by the defendant, Leander B. Faber, individually and as receiver, etc., from an order of the Supreme Court, made at the Kings County Special Term, dated the 25th day of June, 1913, granting an injunction pendente lite restraining the sale of 393 shares of Kings County Lighting Company stock.
    
      Charles L. Craig, for the appellant.
    
      Robert H. Elder, for the respondent.
   Burr, J.:

If there was substantial dispute as to the material facts upon which this controversy depends, following the usual policy of this court, we should decline, upon an appeal from an order granting an injunction during the pendency of an action, to review the discretion exercised by the Special Term. But in this case, even if we accept plaintiff’s version of the facts so far as there is dispute respecting the same, it seems clear that he is not entitled to the relief sought, and that the order appealed from should be reversed.

On December 27, 1911, plaintiff borrowed from the Hamilton Trust Company the sum of $20,500, and executed and delivered to it his promissory note for that amount payable on demand. As collateral security for the payment thereof he pledged to said company 393 shares of stock of the Kings County Lighting Company belonging to him.. The. stock note contained the usual provision that the pledgee, upon' failure of the maker of the note to pay the same according to the terms thereof, might sell, assign and deliver said security or any part thereof, or any substitute therefor, or any additions thereto, or any other securities or property given unto or left in possession of said pledgee, at any broker’s board or at private or public sale, at the option of said pledgee, without either advertisement or notice, which was expressly waived. On previous occasions plaintiff had borrowed other sums of money from-said trust company, for which he had executed seven other promissory notes, and as security for the payment thereof had hypothecated other stocks and bonds then in his possession which had been delivered to him for such purpose. The stock notes by which such securities were pledged contained like provisions. The entire amount of plaintiff’s indebtedness to the trust company aggregated $46,000. On February 11, 1913, in a proceeding then pending in the Supreme Court, entitled In the Matter of the Supplementary Proceedings of Patrick H. Flynn, to which proceeding plaintiff became a party, Mr. Justice Jaycox made an order to the effect that upon certain conditions, and upon tender by defendant to said trust company of the principal and interest due upon the said eight promissory notes of plaintiff," it should deliver and assign to him the said notes, together with all the securities and prop: erty held in pledge for the payment thereof, including • the 393 shares of stock of the Kings County Lighting Company and the certificates therefor. On March 7, 1913, an order was made at a Special Term of this court vacating and setting aside the order of Mr. Justice Jaycox, but upon appeal, and on May 16,1913, this latter order was reversed and the original order was reinstated. (Matter of Flynn, 157 App. Div. 241.) Thereafter, and on May 26, 1913, the conditions precedent recited in said order having been performed, defendant tendered to the Hamilton Trust Company the amount then due upon said notes for principal and interest,- and said trust company assigned and transferred the notes and the securities collateral to secure payment thereof, including the lighting company stock. Demand having been made upon plaintiff for the payment of his note for $20,500, which was refused, notice was thereupon given to him that on June 11, 1913, at the salesroom of Adrian H. Muller & Son, Nos. 14 and 16 Vesey street, in the borough of Manhattan and city of New York, the said stock would be sold at public auction. Notice of the intended sale was also published in the Wall Street Journal, the New York Evening Post and the New York Times. By consent of plaintiff, but reserving all his rights to object to said sale, an adjournment was taken to June 18, 1913, at the same time and place. On the morning of that day this action was commenced.' The relief sought was, among other things, that plaintiff he adjudged to be the owner' of the Kings County Lighting Company stock, free from any claim of defendant thereto, and that the latter be restrained from selling or disposing of the same. On June 25, 1913, the order appealed from was made. This order enjoined defendant during the pendency of this action, or until the further order of this court, from selling or disposing of said lighting company stock.

That the Hamilton Trust Company could have sold said stock in default by plaintiff of his note, is unquestioned. Defendant as its assignee has equal rights. Plaintiff alleges in his complaint that the order above referred to, directing the trust company to assign plaintiff’s notes and the collateral thereto to defendant, was based upon the false and fraudulent representation and pretense that Patrick H. Flynn was the owner of all the collateral stock and bonds, except the Kings County Lighting Company stock. Whether this is the case or not, and whether defendant was entitled to the order which was made, said order is still in force, and the trust company is not complaining of it. Moreover, defendant does not claim title to the notes, and the collateral securities, through the order, but through the assignment to him by the trust company. The order may have been the inducing cause for its action, but it is not the source of defendant’s title. In his brief the learned counsel for plaintiff and respondent says that the question in this case is as to the title of Patrick H. Flynn to certain of the securities thus assigned. It seems to us that this question is not involved at all. Concededly the Kings County Lighting Company stock belonged to plaintiff, and defendant as the assignee of the pledgee of said stock is seeking to realize upon the same in payment of plaintiff’s debts. The other stocks and bonds, according to the allegations in plaintiff’s moving papers, were delivered to him for the express purpose of pledging the same as collateral to his notes, and there is no suggestion of any diversion from such purpose, or any improper use of the same. That being so, no matter who owns these various securities, defendant as the assignee of the trust company is authorized' to sell the same in accordance with the terms of the hypothecation contract to pay the debt. If there is a surplus it may be that the question of title will become important. But there is no question of plaintiff’s title as to the Kings County Lighting Company stock, and there is no person present in this controversy claiming title to any other of the securities, nor as yet has the defendant attempted to realize upon these.

Plaintiff contends that this is not a favorable time to sell the lighting company stock. Whether that is so or not the court has no power upon that ground alone to alter the contract between plaintiff and his pledgee. So far from there being anything unconscionable in defendant’s method of procedure, he might have pursued, under the provisions of the contract, more drastic measures than he has employed.

The order continuing the injunction should be reversed, with ten dollars costs and disbursements, and the motion for an injunction denied, with ten dollars costs.

Thomas, Carr, Rich and Putnam, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion for injunction denied, with ten dollars costs.  