Gay v. Moss

By the Court, Sawyer, J.: Upon the allegations of the complaint and admissions in the answer, and also upon the facts as found by the Court, we think Moss held the contract assigned and delivered to him as security for the payment of the note for three thousand one hundred dollars, as a pledge, and not as a chattel mortgage. The complaint avers that the contract was assigned and delivered “to be by him held as collateral, to secure the payment of the said note and interest as aforesaid,” and the allegation is repeated in various forms, and in one place the averment is: “ that said assignment from said White to defendant of said contract was a pledge thereof, [132] as security for the payment of said note for three thousand one hundred dollar’s, and interest,” etc. These allegations are admitted by the answer. The assignment was absolute in form, but the thing assigned is a chose in action, and the assignment and delivery are necessary to give the pledgee the full authority to readily control it, and afford a prompt means of making the pledge available. For these reasons the fact that the title passes in form by the assignment, in case of a chose in action, does not necessarily make it a mortgage. It is a pledge upon the facts disclosed, within the principles declared in Dewey v. Bowman, 8 Cal. 151; Wilson v. Little, 2 N. Y. 443; and Campbell v. Parker, 9 Bos. 326. (See, also, Edwards on Bailment, 251.) The District Court erred in regarding the transfer of the contract as a mortgage, and, as a consequence of this fundamental mistake, other errors resulted. It may be doubted whether Moss was authorized to sell a pledge of this character at all —whether he was not bound to collect the amount due on the contract, and reimburse himself out of the proceeds. (Wheeler v. Newbould, 16 N. Y. 393.) But, however this may be, he was not authorized to sell without calling upon White to redeem, and giving him reasonable notice of the intended sale. (Stearns v. Marsh, 4 Denio, 229.) This he did not do, and his sale of the pledge in the manner found was a conversion, for which he is clearly liable. (Campbell v. Parker, 9 Bos. 326, and cases cited.) At the time of the sale the value of the contract was found by the Court *to be eight thousand dollars. There was at the time due Moss on the three thousand one hundred dollar note, three thousand seven hundred fifty-four dollars and ten cents, as found by the Court. The amount for which Moss is liable on the conversion, is the value of the pledge eight thousand dollars, less three thousand five hundred seventy-four dollars and ten cents, the amount due him, and interest on said balance from the date of the sale, June 17th, 1863, at the rate of ten per cent per annum. (Douglass v. Krafts, 9 Cal. 562.) [133] We have no doubt the right of action passed to plaintiff by the assignment from White, and that plaintiff is entitled to recover in this action. All the necessary facts appear from the admissions of the pleadings and findings of the Court. The finding that the assignment and delivery of the contract was a mortgage, and not a pledge, although stated as a finding of fact, is, in view of the other facts found, and, also, of the facts admitted in the pleadings, the statement of a conclusion of law. There is, therefore, as the District Court suggests in its opinion denying a new trial, no reason why this Court should not direct the proper judgment to be entered in the case. The judgment is reversed, and the District Court directed to enter judgment against defendant, Moss, for the balance, after deducting the amount found due said Moss, viz : three thousand seven hundred fifty-four dollars and ten cents, from the value of the pledge, viz : eight thousand dollars, and interest thereon from June 17th, 1863, the date of the sale, at ten per cent per annum.