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pledge is to be sold for the purpose of satisfying the loan or debt secured by such pledge the pledgee shall advertise the time and place of sale by posting a notice thereof, in writing, at least fifteen days before such sale, in three public places in the county in which such personal property may be found, one of which shall be the court-house door, or shall publish the same at least two weeks in a newspaper published in his county, unless the person making such pledge, or his legal representative, shall consent, or shall have consented, to a sale in some other mode, or at some other notice, such consent to be expressed in writing.

§ 630. Wisconsin.'-Under the statute for enforcing liens, any bailee for hire, carrier, warehouseman or pawnee or lien-holder by the common law, may, in case the debt remain unpaid for three months and the value of the property affected thereby does not exceed one hundred dollars, sell such property at public auction and apply the proceeds of such sale to the payment of the amount due him and the expenses of such sale. Notice, in writing, of the time and place of such sale and of the amount claimed to be due shall be given to the owner of such property personally or by leaving the same at his place of abode, if a resident of this state, and if not, by publication thereof once in each week, for three weeks successively, next before the time of sale in some newspaper published in the county in which such lien accrues, if there be one, and if not, by posting such notice in three public places in such county. If such property exceed in value one hundred dollars, then such lien may be enforced against the same by action in any court having jurisdiction.

12 Gen. Stats. 1898, § 3347. An action to foreclose a lien upon a pledge of more than one hundred dollars value is of an equitable nature and not triable by jury, although personal judgment goes against the pledgor. An execution should not be issued

until after the sale of the pledge, and then only on the order of the court for the deficiency, after applying the proceeds of the sale towards the payment of the amount of the lien. Wilson v. Johnson, 74 Wis. 337, 43 N. W. Rep. 148.

V. Sales Under Powers of Sale.

§ 631. A power of sale, whether given in a mortgage, or in a pledge, is an authority coupled with an interest, and passes to the pledgee's representatives.' Whatever remedy the creditor has for the enforcement of his security passes upon his decease to his representatives. Such a power is not affected by an attachment of the property in a suit against the pledgor, nor by summoning the pledgee as a trustee or garnishee in such suit.'

The right of a trust company holding in pledge the second mortgage bonds of a railroad company, to sell them according to the terms of the pledge is not affected by the fact that as trustee under a first mortgage of the railroad company, it had commenced a foreclosure suit, and that a receiver had been appointed in that suit, or by the fact that the trust company had also become the owner of a majority of the first mortgage bonds.'

§ 631a. Of course a default under the terms of the pledge must be shown. What constitutes a default depends upon the contract of the parties, which is to be construed according to its sense and meaning as ascertained from the language used, and such language is to be understood in its ordinary sense, unless it has acquired a technical meaning and is used by the parties in a technical sense. Moreover, the whole contract is to be considered. Thus, one borrowed money upon his note secured by certain shares of stock and a life insurance policy, and agreed to maintain a ten per cent. margin on the collateral security "and on the non-performance of this promise, or any part of it, I authorize the pledgee to sell the collateral." was held that the authority to sell related to the failure to pay the note as well as the failure to maintain such margin, and

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Guaranty Trust Co. v. Galveston City R. Co., 87 Fed. Rep. 813, 31 C. C. A. 235.

that a sale for non-payment was not a conversion of the collaterals.1

§ 631b. The power of sale may provide for a private sale or a sale at public auction, and it may provide for a notice to the pledgor, or for a sale without notice. If by the terms of the power the pledgee has authority to sell on a breach of the contract of pledge without notice to the pledgor, he may, before such breach, make a valid agreement to sell the thing pledged when the contingency of a breach shall happen.'

If the power of sale, "at public or private sale," after default, is silent as to notice, it has in some cases been held that a sale without notice was intended.' But other authorities hold that in such case a waiver of notice can not be implied.*

Where a pledgee is empowered to sell collateral security upon the failure of the maker of the note to comply with its terms, and the option is given by which he can dispose of stocks, held as security, at public or private sale, and he chooses to make the sale public, he must conform to the rules governing public sales, so far as publicity is concerned. The power of sale must be exercised with a view to the interests of the pledgor as well as the pledgee, and the sale should not be forced for barely sufficient money to secure the payment of

1 Manning v. Shriver, 79 Md. 41, 28 Atl. Rep. 899. The court, Robinson, C. J., said: "We are now dealing with a promissory note, to secure the payment of which at maturity the defendant pledges certain collateral securities, and, in addition thereto, he agrees to maintain on demand a margin of ten per cent. So there is not only a promise to pay the note when due, but also a promise to keep up a certain margin, and when the parties say that upon "the non-performance of this promise, or any part of it," the payee is authorized to sell the pledge, they mean upon the nonperformance of either the promise to

pay the note at maturity or the nonperformance of the agreement to keep up the margin when so demanded. We can not suppose for a moment that the collateral security was pledged merely as a security for the maintenance of the margin."

2 Taft v. Church, 162 Mass. 527, 39 N. E. Rep. 283.

3 McDowell v. Chicago Steel Works, 124 Ill. 491, 16 N. E. Rep. 854.

4 Ogden v. Lathrop, 65 N. Y. 158; Millikin v. Dehon, 10 Bosw. (N. Y.) 325; Haskins v. Patterson, Edm. Sel. Cas. (N. Y.) 120; Goldsmidt v. First M. E. Church, 25 Minn. 202. See § 611.

the debt, when the securities are known to be of more than double the value of the debt.1

§ 632. Authority to sell collateral security is terminated by satisfaction of the principal debt. Thus if a debt secured by a mortgage of chattels be further secured by a pledge of negotiable notes with a power to sell them upon default, and the mortgaged chattels be disposed of by the creditor in such a manner as to satisfy the debt secured, his subsequent sale of the collaterals under the power is unauthorized, and he is liable to account for their actual value irrespective of the price received for them. If, however, any part of the mortgage debt remains unsatisfied after the application to it of the mortgaged property, then a sale of the collaterals can be properly made, and the creditor in accounting for a surplus, is chargeable with only the sum for which the collaterals were sold.❜

§ 633. Where the subject-matter of a pledge is divisible, the pledgee should not sell under a power of sale more of the property than is sufficient to pay the debt secured, and if he does so he may be responsible to the pledgor for the damages he may thereby sustain; such damages being the difference between the price for which the property, in excess of the amount required, was sold, and the price at which the pledgor could replace it. It is declared that stronger reasons exist for the application of this rule in the case of pledges, than exist in the cases of mortgages or deeds of trust with powers of sale, because a pledge, unlike those securities, does not pass the legal title of the property, but only the possession of it, as security for the debt, and that the pledgee, in exercising the power of sale, acts strictly for the pledgor, in whom the legal title is still vested."

1 Foote v. Utah Commercial & Sav. Bank, 17 Utah 283, 54 Pac. Rep. 104. And see Nat. Bank v. Baker, 128 Ill. 533, 21 N. E. Rep. 510, 4 L. R. A. 586.

'Mowry v. First Nat. Bank, 54 Wis. 38, 11 N. W. Rep. 247.

3 Fitzgerald v. Blocher, 32 Ark. 742, 29 Am. Rep. 3.

• Fitzgerld v.

Blocher, 32 Ark. 742.

If several things are held in pledge the creditor upon default may sell either or any of them at his discretion from time to time till the debt is fully satisfied.

§ 634. If the pledgor has mixed the articles pledged with others belonging to himself, a sale of the whole will be valid and binding,' especially if the terms of sale are broad enough to cover the whole, as for instance when they embrace all the materials in a certain building.'

§ 635. A pledgee can not directly or indirectly purchase at a sale of the pledge under a power, unless it is specially provided by the terms of the power that he may do so. Nothing passes by the form of a sale, and the pledgee still holds the property, under his original lien as collateral security. The title is still in the pledgor, and the pledgee is still liable to account for the property and to deliver it upon payment of the debt. But such a sale and purchase is no ground for nonsuiting the pledgee in an action subsequently brought by him

'Jones on Chattel Mortgages, §§ 155, 483.

2 Clark v. Bouvain, 20 La. Ann. 70. 3 Halliday v. Holgate, L. R. 3 Ex. 299; Donald v. Suckling, L. R. 1 Q. B. 585; Marsh v. Whitmore, 21 Wall. 178; Wardell v. Railroad Co., 103 U. S. 651, 658; Canfield v. Minneapolis Agr. & Mech. Asso., 4 McCrary 646. See, also, Jones on Mortgages, §§ 1878-1888; Jones on Chattel Mortgages, §§ 806-815.

Colorado: Morgan v. Dod, 3 Colo.

551.

Illinois: Chicago Artesian Well Co. v. Corey, 60 Ill. 73; Killian v. Hoffman, 6 Bradw. 200; Stokes v. Frazier, 72 Ill. 428.

Indiana: Indiana & Ill. Cent. R. Co. v. McKernan, 24 Ind. 62.

Maryland: Maryland F. Ins. Co. v. Dalrymple, 25 Md. 242, 89 Am. Dec. 779; Baltimore Marine Ins. Co. v. Dalrymple, 25 Md. 269; Bryson v. Rayner, 25 Md. 424; Manning v. Shriver, 79 Md. 41, 46, 28 Atl. Rep. 899.

Massachusetts: Lord v. Hartford, 175 Mass. 320, 56 N. E. Rep. 609; Middlesex Bank v. Minot, 4 Mete. 325; Blood v. Hayman, 13 Metc. 231; Day v. Holmes, 103 Mass. 306, 311.

Missouri: Greer v. Lafayette County Bank, 128 Mo. 559, 30 S. W. Rep. 319; Chouteau v. Allen, 70 Mo. 290; Thornton v. Irvin, 43 Mo. 153.

New York: Duncomb v. New York, H. & N. R. Co., 84 N. Y. 190, 205.

Pennsylvania: Hestonville, etc., R. Co.v. Shields, 3 Brews. 257; Register v. Iowa: Bank v. Dubuque R. Co., 8 Sellers, 4 Pa. Co. Ct., 490, 44 Leg.

Iowa 277.

Int. 502.

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