were delivered as collateral security for advances to be made under certain contracts made by the pledgee with the indorser. The creditor afterwards brought an action for a final accounting under the contracts, and obtained a judgment, which was satisfied. In this action, claims for advances made upon two drafts, each referring specifically to one of the collateral notes, were rejected because not included in the bill of particulars. Subsequently the creditor brought suit upon the notes, and it was contended that they were merged in the judgment recovered in the action for an accounting; but it was held that they were not so merged; that the obligation of the parties thereto remained until the purpose for which the notes were delivered should be accomplished, namely, the securing the payment of the advances made by the creditor upon the faith of these notes.1

2

The whole debt must be paid in order to discharge the lien of the pledge. In Louisiana the civil code provides that when several things have been pawned the owner can not retake one of these without satisfying the whole debt, though he offers to pay a certain amount of it in proportion to the thing which he wishes to get. The creditor who is in possession of the pledge can only be compelled to return it, when he has received the whole payment of the principal as well as the interest and costs.

But the fact that at the time of the payment of a principal debt of eight thousand dollars, an item of interest amounting to thirty-seven dollars was overlooked by both parties, and part of the collateral security was surrendered by the pledgee to the pledgor, the latter was not precluded from recovering the value of stock not surrendered, but retained by the pledgee as security for another debt. The pledgee did not refuse to deliver the stock in question because this item of interest was

'Steele v. Lord, 28 Hun (N. Y.) 27. 'Williams v. Nat. Bank, 72 Md. 441, 450, 20 Atl. Rep. 191; Flanagin v. Hambleton, 54 Md. 222.

JONES PLEDGES.-37

32 Merrick's R. Civ. Code 1900, arts. 3163, 3164; R. Civ. Code 1870, p. 376, arts. 3163, 3164.

not paid; and he can not on this ground maintain the defense that the pledgor did not establish a technical conversion of the stock.'

§ 541. A renewal of a note secured by a pledge merely extending the time of payment does not extinguish the debt, and is not a payment of it which will discharge the creditor's claim upon the collateral security. Upon payment of a part of the original note, and the execution of a new note in renewal of the remainder of the debt not paid, a pledge taken

1 Kullman v. Greenebaum, 92 Cal. Murphy, 40 Mich. 668; Post v. Spring403, 28 Pac. Rep. 674. sted, 49 Mich. 90.

Colorado: Collins v. Dawley, 4 Colo. Waddell, 75 Hun 104, 26 N. Y. Supp. 138, 34 Am. Dec. 72.

Georgia: Partridge v. Williams, 72 Rep. 1148; Merchants' Nat. Bank v. Ga. 807.

as security for the original note will stand as security for such new note, in the absence of any agreement to the contrary.'

An unexpressed intention of the pledgor that the collateral shall not apply to and secure a renewal of the note secured, which is merely an extension of the time for payment, can not defeat the right of the pledgee to hold the security until the debt is satisfied."

In Massachusetts, however, the rule is that there is a prima facie presumption that a note taken in renewal of an antecedent note or debt is received in payment of such prior note or debt. But this presumption may be rebutted by evidence that it was not the intention of the parties that the renewal should have this effect, and this intention may be inferred from proof that, if thus treated, the party taking the new note will have relinquished valuable security, as where a new note is given for an old one secured by a mortgage, or a pledge.

§ 541a. A substitution of other securities for those originally pledged does not affect the pledgee's rights except as the new securities are more or less valuable than the old. He holds the new securities in place of those originally taken, and may enforce them and apply the proceeds to the payment of the debt secured."

§ 541b. Payment may be made by a surrender by the pledgee of the note secured and a transfer of the pledge to him by the

1 Dayton Nat. Bank v. Merchants' Nat. Bank, 37 Ohio St. 208.

Clark v. Iselin, 21 Wall. 360; Tiffany v. Boatmen's Inst., 18 Wall. 375;

2 Williams v. National Bank, 72 Md. Greenwell v. Haydon, 78 Ky. 534; 441, 20 Atl. Rep. 191.

3 O'Conner v. Hurley, 147 Mass. 145, 16 N. E. Rep. 764; Green v. Russell, 132 Mass. 536; Ely v. James, 123 Mass. 36; Stevens v. Wiley, 165 Mass. 402, 407, 43 N. E. Rep. 177.

Mahaska County State Bank v. Crist, 87 Iowa 415, 54 N. W. Rep. 450; Des Moines Nat. Bank v. Chisholm, 71 Iowa 675, 33 N. W. Rep. 234; Stevens v. Blanchard, 3 Cush. (Mass.) 169; Girard F. & M. Ins. Co. v. Marr, 46 Pa. St. 504; Searight v. Carlisle Dep. Bank, 162 Pa. St. 504, 29 Atl. Rep. 783; Smith v. Hiles-Carver Co., 107 'Sawyer v. Turpin, 91 U. S. 114; Ala. 272, 18 So. Rep. 37.

Bryant v. Pollard, 10 Allen (Mass.) 81; O'Conner v. Hurley, 147 Mass. 145, 16 N. E. Rep. 764.

pledgor, who can not afterwards redeem the pledge unless the surrender of the pledge was obtained by fraud. Thus, where the pledgee of shares of stock surrendered to the pledgor a paper evidencing the pledge, and also surrendered the notes to secure which the pledge was made, marking them "paid," and the pledgor executed and delivered to the pledgee an absolute bill of sale of the shares, the chancellor will not, in the absence of strong evidence of fraud, set aside the contract and permit the pledgor to redeem.'

§ 542. A tender of the amount due on a debt for which property is held in pledge, or for which collateral security has been given, no objection being made to the amount or sufficiency, wholly discharges the lien of the pledge, and revests the title to the thing pledged in the pledgor, so as to entitle him to maintain trover, or replevin therefor. In this respect a tender is equivalent to actual payment. A tender of a part of the amount of the debt will not have the effect to revest the title to

1 Cunningham v. Jones (Ky.), 57 S. Minn. 146, 42 N. W. Rep. 865, 4 L. R. W. Rep. 488. A. 305.

2 Ratcliff v. Davis, Cro. Jac. 244, Yelv. 178, 1 Bulstr. 29; Coggs v. Bernard, 2 Ld. Raym. 909, Holt 528; Ryall v. Rowles, 1 Atk. 165, 167; Mitchell v. Roberts, 17 Fed. Rep. 776.

California: Latta v. Tutton, 122 Cal. 279, 54 Pac. Rep. 844; Haile v. Smith, 113 Cal. 656, 45 Pac. Rep. 872; Loughborough v. McNevin, 74 Cal. 250, 14 Pac. Rep. 369, 15 Pac. Rep. 773, 5 Am. St. Rep. 435.

Georgia: McCalla v. Clark, 55 Ga. 53. Massachusetts: Hancock v. Franklin Ins. Co., 114 Mass. 155; Hathaway v. Fall River Nat. Bank, 131 Mass. 14. Michigan: Moynahan v. Moore, 9 Mich. 9, 77 Am. Dec. 468; Stewart v. Brown, 48 Mich. 383, 12 N. W. Rep. 499.

New York: Haskins v. Kelly, 1 Robt. 160, 1 Abb. Pr. N. S. 63; Bowman v. Hoffman, 20 N. Y. Supp. 415; Lawrence v. Maxwell, 53 N. Y. 19; Cass v. Higenbotam, 100 N. Y. 248, 3 N. E. Rep. 189; Kortright v. Cady, 21 N. Y. 343, 78 Am. Dec. 145; Lehmeyer v. Provident Loan Society, 65 N. Y. Supp. 313, 31 Misc. Rep. 719.

Pennsylvania: Rodgers v. Grothe, 58 Pa. St. 414; Davis v. Bigler, 62 Pa. St. 242; Appleton v. Donaldson, 3 Pa. St. 381.

South Carolina: Ratcliff v. Vance, 2 Mill's Const. Rep. 239.

Tennessee: Ball v. Stanley, 5 Yerg 199, 26 Am. Dec. 263.

Utah: Hyams v. Bamberger, 10 Utah 3, 36 Pac. Rep. 202, 205, quoting

Minnesota: Norton v. Baxter, 41 text.

any part of the property pledged;' the debt must be paid as a whole, and the tender to be effectual must be co-extensive with the whole debt secured.2

In one respect a tender is not equivalent to payment; for although the lien is discharged by either, the debt is not discharged by a tender but the pledgee may still maintain his action for this.

If a pledgor suffers the thing pledged to remain in the possession of the pledgee after tender of payment, and takes no steps to recover possession, he authorizes others to regard the pledge as still subsisting, and he can not recover the thing pledged from an innocent purchaser without paying him the amount secured by the pledge. A pledgor waives his right to treat a tender as a discharge of the lien by bringing an action against the pledgee for money had and received after the latter has sold the pledged property.*

use.

§ 543. A creditor by refusing a tender properly made of the amount of a debt secured by a pledge, converts it to his own He makes it his own so far as to run the chance of any depreciation that may afterwards occur. He can not sue for and recover the debt without making a proper allowance for the value of the pledge as it was at the time of the tender in reducing or satisfying the debt. If in such case there be a surety of the debt, he is released; for the surety is entitled to have the security delivered up to him upon his paying the debt; and when the creditor has by his own act destroyed the security or rendered it valueless, or put it out of his power to give the surety the benefit of the substitution, the latter is discharged.

1 Appleton v. Donaldson, 3 Pa. St. Pac. Rep. 202, 205, quoting text; 381.

2 Bigelow v. Young, 30 Ga. 121. 'Bradley v. Parks, 83 Ill. 169.

Hathaway v. Fall River Nat. Bank, 131 Mass. 14; Hancock v. Franklin Ins. Co., 114 Mass. 155; Loughbor

'Hancock v. Franklin Ins. Co., 114 ough v. McNevin, 74 Cal. 250, 14 Pac.

Mass. 155.

5 Griswold v. Jackson, 2 Edw. Ch. (N. Y.) 461; affirmed 4 Hill 522; Hyams v. Bamberger, 10 Utah 3, 36

Rep. 369, 15 Pac. Rep. 773.

Griswold v. Jackson, 2 Edw. Ch. (N. Y.) 461.