President, Directors of Granite Bank v. Richardson

Shaw, C. J. On this case, the court are of opinion that the instruction of the court of common pleas was right. The bank shares were taken as collateral security for the payment of the note. It afforded the holders an additional remedy, but did not supersede their remedy by action. If they had a right to sell the shares when the note became due, they were not bound to do so. If they had been actually sold, and the value redized in cash, it might have operated as payment de facto ; but not till [409] then. Rice v. Catlin, 14 Pick. 221. Middlesex Bank v. Minot, 4 Met. 325. A very different rule may apply where money is advanced on property consigned for sale. There the pledgee takes upon himself the duties, and may be held to the responsibilities, of an agent or factor, to sell the goods consigned, and account for the proceeds before he can require payment of the advance. Porter v. Blood, 5 Pick. 54. But that is a very different question, which it is not now necessary to decide, because here the plaintiffs did not take to themselves the character or duty of agents to sell the shares, but simply took them to hold as security, with perhaps a power to sell. Till such power executed, they were under no obligation to account for the shares. The remedy of the defendant was in paying his debt and redeeming them. Nor can we perceive that the letter of the plaintiffs to the defendant, of September 15th 1841, made any difference in the relations of the parties. It was notice that they claimed a right to sell, and intended to sell, the shares; but until such intention was carried into effect by an actual sale, the shares remained as they did before. The beneficial interest was in the defendant, subject to a mortgage or pledge to the plaintiffs. Of course they remained at the risk of the defendant. Exceptions overruled.