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67 A.D. 143

Small v. Muller

Appellate Division of the Supreme Court of the State of New York · decided 1901-07-01

<p>Action to set aside a chattel mortgage—jurisdiction of the Supreme Court over such an action brought by a trustee in bankruptcy — sale of the chattels not ordered, before final judgment.</p> <p>A State court is not debarred by the provisions of the Bankruptcy Act of 1898 from taking jurisdiction of an action brought by a trustee in bankruptcy to set aside a chattel mortgage and bill of sale as fraudulent and void, and to enjoin the defendant from interfering with the property described in said instruments, or claiming any title thereto at a sale thereof by the plaintiff.</p> <p>An order appointing a receiver of non-perishable property pendente lite should not contain a provision authorizing him to sell the property before final judgment.</p>

Relies on Fred Bardes v. First National Bank of Hawarden Iowa · Brush v. . Jay

Decided 1901-07-01

Willard Bartlett, J.:

¶1This is a suit by a trustee in bankruptcy to set aside a chattel mortgage and bill of sale as fraudulent and void, and to enjoin the defendant from interfering with the property described in said instruments or claiming any title thereto, at a sale thereof, by the plaintiff.

¶2, A State court is not debarred from jurisdiction in such an action by the provisions of the Bankruptcy Act of 1898. (30 U. S. Stat. at Large, 544; Bardes v. Hawarden Bank, 178 U. S. 524.)

¶3The objection to the orders under review is that they practically dispose of the litigation in favor of the plaintiff, before trial.

¶4Theré is no answer in the appeal book, but-there is an affidavit of the defendant, Oonrad Muller, which puts at issue the allegations ■of the complaint which the plaintiff must establish to entitle him to the judgment which he asks.

¶5The moving papers make out. a proper case for the appointment of a receiver pendente life to take and preserve the property until final judgment.

¶6There was no necessity or occasion, however, for ordering a sale prior to the determination of the controversy, inasmuch as the prop, erty was not of a perishable character, (See Brush v. Jay, 113 N. Y. 482.)

¶7It is not a justification for taking away and selling a man’s possessions under such circumstances to tell him that he may assert his claim against the proceeds just as well as against the property.

¶8The order appointing the receiver should be modified by striking out the provision authorizing a sale and by restricting the powers of the receiver to the preservation of the property pending the action; as thus modified, it should be affirmed, without costs.

¶9*145As the injunction relates solely to the proposed sale, and we think there should be no sale before judgment, the injunction ■should be dissolved, with costs to the appellant.

¶10The appeal from the order refusing to modify the injunction should be dismissed, without costs.

¶11Goodrich, P. J., Woodward, Hirschberg and Jenks, JJ., concurred.

¶12Order appointing receiver modified, and as modified affirmed, without costs. Injunction dissolved, with ten dollars costs and disbursements to the appellant. Appeal from order refusing to modify injunction dismissed, without costs.

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