Stearns v. Marsh

By the Court, Jewett, J. The contract between these parties was strictly a pledge of the boots and shoes. At common law, a pledge is defined to be a bailment of personal property, as a security for some debt or engagement. (2 Kent’s Com. 577, 5th ed.; Story on Bailment, § 286.) The plaintiffs’ debt, thus secured, became payable on the 8th day of November, 1837. On the 15th of that month, the plaintiffs caused the pledge to be sold at a public sale by an auctioneer in Boston, pursuant to a public notice published in certain newspapers in that city from the 2d to the 15th of November inclusive; but no notice of sale, or to redeem, was at any time given to the defendants. The net proceeds of the sale was $166,97, which the plaintiffs applied on their debt without the assent of the defendants. The first question made on the argument is, whether the sale thus made was authorized, and bound the defendants. On the part of the plaintiffs it was insisted, that the pledge [230] Having been made as a security for their debt, which was payable at a future day, the plaintiffs had a right, after a default m payment, to sell the pledge, fairly in the usual course of business ; without calling on the defendants to redeem, or giving them notice of the intended sale: and that such sale concluded the defendants. It is said that the law makes a distinction between the case of a pledge for a debt payable immediately, and one where the debt does not become payable until a future day; and that in the latter case the creditor is not bound to call for a redemption or to give notice of sale, though in the former it is conceded that there must be such demand and that notice must be given. Non-payment of the debt at the stipulated time did not work a forfeiture of the pledge, either by the civil or at the common law. It simply clothed the pledgee with authority to sell the pledge and reimburse himself for his debt, mterest and expenses; and the residue of the proceeds of the sale then belonged to the pledgor. The old rule, existing in the time of Glanville, required a judicial sentence to warrant a sale, unless there was a special agreement to the contrary. But as the law now is, the pledgee may file a bill in chancery for a foreclosure and proceed to a judicial sale; or he may sel without judicial process, upon giving reasonable notice to the pledgor to redeem, and of the intended sale. I find no authority countenancing the distinction contended for; but on the contrary, I understand the doctrine to be well settled, that whether the debt be due presently or upon time, the rights of the parties to the pledge are such as have been stated. (Cortelyou v. Lansing, 2 Caines’ Cas. in Err. 204; 2 Kent’s Com. 5th ed. 581, 582; 4 id. 138, 139; Tucker v. Wilson, 1 P. Wms. 261; Lockwood v. Ewer, 2 Atk. 303; Johnson v. Varnon, 1 Bailey’s S. C. Rep. 527; Perry v. Craig, 3 Missouri Rep. 516; Parker v. Brancker, 22 Pick. 40; De Lisle v. Priestman, 1 Browne’s Penn. R. 176; Story’s Com. on Eq. § 1008; Story on Bailm. §§ 309, 310, 346; Hart v. Ten Eyck, 2 John. Ch. 100; Patchin v. Pierce, 12 Wend. 61; Garlick v. James, 12 John. 146.) Nor do I see any reason for such’ a distinction. In either case the right to redeem equally exists until a sale: [231] the pledgor is equally interested, to see to it that the pledge i? sold for a fair price. The time when the sale may take place is as uncertain in the one case as in the other; both depend upon the will of the pledgee, after the lapse of the term of credi in the one case, and after a reasonable time in the other; unless indeed the pledgor resorts to a court of equity to quicken a sale. Personal notice to the pledgor to redeem, and of the intended sale, must be given as' well in the one case as in the other, in order to authorize a sale by the act of the party. And if the pledgor cannot be found and notice cannot be given to him, judicial proceedings to authorize a sale must be resorted to. (2 Stor. Com. on Eq. § 1008.) Before giving such notice, the pledgee has no right to sell the pledge; and if he do, the pledgor may recover the value of it from him, without tendering the debt; because by the wrongful sale the pledgee has incapacitated himself to perform his part of the contract, that is, to return the pledge, and it would therefore be nugatory to make the tender. (Cortelyou v Lansing, supra; Story on Bailm. 2d ed. 349; McLean v. Walker, 10 John. 472.) The evidence in this case shows that the plaintiffs, in November, 1837, long prior to the commencement of this suit, tortiously sold the pledge, and thereby put it entirely beyond their power to return it, upon payment of the debt. Where a pledge is made by a debtor to his creditor to secure his debt, for a certain term, the law requires that the latter shall safely keep it without using it, so as to cause any detriment thereto; and if any detriment happens to it within the term appointed, it may be set off against the debt, according to the damage sustained. And if the pledge is made without mention of any particular term, the creditor may demand his debt at any time. When the debt is paid, the creditor is bound to restore the pledge in the condition he received it, or make satisfaction for any injury that it has received ; for it is a rule, that a creditor is to restore the pledge or make satisfaction for it; if not, he is to lose his debt. (1 Reeve's Hist. Eng. Law, 161, 162.) If the pledgor, in consequence of any default of the pledgee, or of his conversion of the pledge, has by any action recovered the value of the [232] pledge, the debt in that case remains, and is recoverable, unless in such prior action it has been deducted. By the common law the pledgee, in such an action brought for the tort, has a right to have the amount of his debt recouped in the damages. (Bac. Abr. Bailment, B.; Jarvis v. Rogers, 15 Mass. R. 389; Story on Bailm. 2d ed. §§ 315, 349.) The plaintiffs were wrongdoers in selling the pledge at the time they did, without notice to redeem or of the sale being given to the defendants; and it is shown that the value of the pledge at the time equalled, if it did not exceed the debt which it was made to secure. The counsel for the defendants, in effect, offered to recoup their damages arising from the plaintiffs’ breach of the contract of pledge, but was not permitted to do so. It is urged by the plaintiffs’ counsel, that the defence was not admissible under the pleadings; but I am satisfied that it was unnecessary to plead specially, or to give notice of the .matters relied on. The evidence establishes that the plaintiffs had no cause of action, and the defence is fairly covered by the plea of non-assumpsit. (Batterman v. Pierce, 3 Hill, 171; Barber v. Rose, 5 id. 76; Ives v. Van Epps, 22 Wend. 155.) The defendants clearly had an election of remedies against the plaintiffs for the conversion of the pledge. They could maintain trover or assumpsit, and in the latter action could recover the value under the common counts. (Hill v. Perrott, 3 Taunt. 274; Butts v. Collins, 13 Wend. 139 to 154.) If assumpsit was maintainable by them, they may, in an action by the plaintiffs, set off the value of the boots and shoes as for such property sold. There is no valid objection on the ground that the damages are unliquidated or uncertain. The case of Butts v. Collins is decisive on that point. There must be a new trial. New trial granted.