Loomis v. Reimers

Sherwin, J. i. duty ofary cale. There are some suspicious circumstances .connected with the purchase of the $5,500 insurance company note by W oelz, but they are not of suificient weight to overthrow the positive testimony of the witnesses as to the bona tides of that transaction; and we find that Woelz became.the owner of the note by said purchase and assignment, and that he is entitled to hold the Reimers note, the Shenandoah bank stock, and the other collaterals pledged for the payment thereof. To meet a possible holding of this kind, the plaintiff in his petition offered to pay to Woelz the amount due on this note upon a surrender of the same, together with all collaterals belonging' thereto, including the Grand Island bank stock belonging to Mrs. Reimers. As we have already said, this stock was replevied by Mrs. Reimers soon after Woelz took it to Grand Island, and the title and right to possession thereof was afterwards found to be in her. Woelz made no defense to that action, alleging as a reason for not doing so that he consulted an attorney, and was by him advised that no valid defense could be interposed to the claim off Mrs. Reimers. This testimony is uncontradicted, save by the circumstances connected with the purchase of the note to which we have heretofore referred. It is the general rule that a pledgee “is bound to use ordinary care and diligence in the care and custody of the thing pledged. The diligence required in any particulai case must necessarily depend upon the character of the [172] thing pledged * * * as well as the means of protection possessed by the pledgee.” Willits v. Hatch, 132 N. Y. 41 (30 N. E. Rep. 251, 17 L. R. A. 193); Cooper v. Simpson, 41 Minn. 46 (42 N. W. Rep. 601, 4 L. R. A. 194, 16 Am. St. Rep. 667); Bank v. O’Connell, 84 Iowa, 377. If, as claimed, Woelz acted in perfect good faith in the purchase of the note in question, and without any purpose of assisting the Eeimers in securing this bank stock, 2. same: reure'of iraiiee to defend; liabiityof. and did in fact honestly and in good faith consult an attorney with reference to a defense to the replevin action, ana aid not de-fend for the sole reason that he was advised that he could not do so successfully, he, in our judgment, did all that an ordinarily prudent man would do under the circumstances, and should not be held liable for the loss of the stock. And we think the record shows that he did act in good faith in not defending. From the showing before us we believe that Mrs. Eeimers’ bank stock was pledged' by her husband without her knowledge- or consent, and that she was entitled thereto free from the claim of the pledgee. It is possible that her action of replevin was barred by the statute of limitation, but a court of equity would not, for that reason, establish a lien thereon in favor of the plaintiff, and we are not disposed to here deduct the value of such stock from the amount due on the $5,500 note held by Woelz. Roberts v. Deposit Co., 123 N. Y. 57 (25 N. E. Rep. 294, 9 L. R. A. 438, 20 Am. St. Rep. 718); Pingree v. Railroad Co., 66 Mich 143 (33 N. W. Rep. 298, 11 Am. St. Rep. 479). Whether Eeimers should, under the circumstances, be compelled to pay any part of the balance due on his note, we do not determine. He has not appealed from the judgment below, a!nd the question is not properly before us, as we view the case. The judgment is reversed.