Wilson v. Hawley

Barker, J. In pledging for their own debt the shares of stock pledged to them by the plaintiff, the defendants acted within the authority given by that clause of the contract which stated that the holder of the collateral had authority to sell, transfer, or hypothecate it for his own use. Although upon their insolvency the shares were sold by their pledgee, the debt created by their failure to restore them to the plaintiff was not “ a debt or claim against a pledgee created by his sale of collateral securities in a manner not authorized by his contract with the pledger.” St. 1885, c. 353, § 6. On the contrary, however unwise or extraordinary the plaintiff’s contract with the defendants may have been, it distinctly authorized the defendants to deal with the shares in the manner which created the plaintiff’s debt. The rulings that the disposition of the shares was not [254] fraudulent within the meaning of the Pub. Sts. c. 157, § 84, or of the St. of 1885, c. 353, § 6, and that the plaintiff’s claims were barred by the discharge in insolvency, were therefore correct. Exceptions overruled.