Summary
holding that the defaulting borrower remained the legal owner of corporate stock that he had pledged as collateral for a loan, and was therefore entitled to the surplus which remained after satisfaction of the debt
Summary of this case from Weber v. SefcuOpinion
May 26, 1998
Appeal from the Supreme Court, Westchester County (Wood, J.H.O.)
Ordered that the judgment is affirmed insofar as appealed from, with costs.
Contrary to the appellants contention, the trial court properly concluded that TJCC 9-505 (2) was applicable to this cases Pursuant to 13CC 9-505 (2), a secured party must provide written notice to the defaulting debtor of an election to retain collateral in satisfaction of the debt. The appellant failed to provide the requisite written notice and therefore did not become the legal owner of the plaintiff's stock, which was pledged as collateral for a loan ( see, MTI Sys. Corp. v. Hatzie-manuel, 151 A.D.2d 649, 650; Matter of Szelega v. Farega Realty Corp., 97 A.D.2d 874, 875). Since the plaintiff retained ownership of the stock ( see, Matter of Szelega v. Farega Realty Corp., supra), the plaintiff, and not the appellant, was entitled to the surplus which remained after satisfaction of the debt when the corporate assets were sold and the corporation was dissolved;
The appellants remaining contention is without merit.
Mangano, P. J., Thompson, Santucci and Aitman, JJ., concur.