Cole v. Dalziel

McAllister, J. Notwithstanding the pledge was commercial paper, yet after a careful reconsideration of the case, we are brought to the conclusion that, under the facts shown upon the trial, the action of trover was not maintainable. The authorities hold that a pledgee of commercial paper has no right, in the absence of a special power to do so, to sell the pledge, but is bound to collect it and apply the proceeds to the payment of the debt, for which the pledge was given. Story on Bailments, 8th ed. § 321; Joliet Iron, etc. Co. v. Scioto Brick Co. 82 Ill. 548; Union Trust Co. v. Higdon, 93 Ill. 458. But in this.case, the pledgee had the special power given him by the pledgor to sell the pledge, at anytime before or after the debt became du e, at public or private sale, with or without notice. Waiting until after the debt became due, he sold the pledge, not to either of the makers of the note pledged, but to a stranger to the transaction. That there was a sale can not, upon the evidence, admit of a doubt. Indeed, the plaintiff’s case went upon the theory that there was a sale, but that it was made without giving the plaintiff sufficient notice. The rightful exercise of the power of sale was not dependent upon the giving of any notice whatever to the plaintiff The notice which, in ordinary cases, would be indispensable to the right to sell the pledge, was here waived. The sale, which it was claimed, constituted an unlawful conversion of the pledge, was not made in contravention, but in pursuance, of the express power given. The sale, so made, would undoubtedly pass a good title to the purchaser. In making it, the defendant did nothing which he was not expressly authorized to do. That being so, such sale could not amount to an unlawful conversion, and trover would not lie. Dufresne v. Hutchinson, 3 Taunt. 117; Sarjeant v. Bhent, 16 Johns. 74; Cairns v. Bleeker, 12 Johns. 300; Canfield v. Munger, Id. 347; Bromly v. Coxwell, 2 Bos. & Pull. 438; Palmer v. Jarmain, 2 Mees. & Welsh. 282; Stierneld v. Holden, 4 Barnw. & Cres. 5; Sturges v. Keith, 57 Ill. 451. It was necessary in order to maintain trover, that the act done should be so far unauthorized as to terminate the bailment. Harvey v. Epps, 12 Gratt. 153. But if it be conceded that the sale of the pledge amounted to an unlawful conversion, still the judgment below was not right. The amount which plaintiff owed the defendant, and for which the pledge was given and held, exceeded the amount of the commercial paper which constituted such pledge. That circumstance should have been taken into consideration, in determining the amount of damage, and if the sum so owing the defendant by the plaintiff, was equal to the value of such paper, then the plaintiff was entitled to only nominal damages, if the sale of the pledge had been unauthorized. That point was expressly decided in Johnson v. Stear, 109 Eng. C. L. 330. For the reason given, the judgment of the court below will bo reversed and the cause remanded. Reversed and remanded.