Laloire v. P. S. Wiltz & Co.

The opinion of the court was delivered by Spexcek, J. The plaintiff, Mrs. Laloire, being indebted to defendants in the sum of 82721, with eight per cent interest from April 20,1873, gave to them in pledge a note of F. Bérard for four thousand dollars, bearing-eight per cent interest from tho thirtieth of December, 1872, and due first of December, 1873. The act of pledge bears date the tenth day of April, 1873. The defendants being in need of money, in their turn pledged this four-thousand-dollar note (which was secured by joint mortgage and vendor’s privilege on a plantation in St. Martin) to the New Orleans Mutual.Insurance Association for its full amount to secure a loan of twelve thousand dollars, without advising tho company of the nature of their title or limiting their pledge of it to the amount of their debt against plaintiffs. P. S. Wiltz & Co. soon after failed, and the insurance company disposed of the note to Hambro & Son, of London, in absolute property, and these last, through their agent, Halsey, foreclosed the mortgage and bought the plantation. [330] Plaintiff brings this suit against P. S. Wiltz & Co. to recover tjie excess of the pledged note over the amount of her indebtedness. Defendants answer by a general denial, and plead that plaintiff has not pat‘them in default; that plaintiff has never paid or offered to pay her indebtedness to them; that they had a right to pledge the four-thousand-dollar note, and did so in good faith. There was judgment for plaintiff, and defendants appeal. Conceding for the sake of argument that defendants liad a right to pledge the note held by them in pledge, they certainly had no right to pledge a greater interest therein than they had themselves. By their pledge to the insurance company they put it out of the power of themselves or the plaintiff to redeem the note by paying the $2724 for which it was pledged to defendants. The defendants actively violated the contract of pledge, and there was no necessity of putting them in default. O. C. C. 1926,1905, No. 3. The defendants having disposed of the pledge in violation of their contract, can not avoid liability for its amount by indefinite statements of witnesses that the property mortgaged and sold to pay the note did not bring the amount of it. The maker of the note may be perfectly responsible outside of the mortgaged property, and defendants have put it out of their power to return the pledge. If the note pledged was not worth what it called for, the onus of proving it was on defendants. Wo find no proof of that fact at all satisfactory. . We think there is no error in the judgment of the court below, which is accordingly affirmed with costs of both courts.