First National Bank of Kansas City v. Hall

HERRICK, J. The plaintiff held the so-called Crane notes and other securities as pledgee, and it is well settled by authority in this state that it could not become the purchaser thereof, unless the defendant assented to the purchase. The defendant not assenting to it, the sale became a nullity, and the parties’ rights therein are the same as though no sale had been attempted. Bryan v. Baldwin, 52 N. Y. 237; Duncomb v. Railroad Co., 84 N. Y. 190-204; Roach v. Duck-worth, 95 N. Y. 391. This is not like the case of Griggs v. Day, 136 N. Y. 152, 32 N. E. 612. There the pledgee parted with the securities to a third person, and at the time of the trial of the action he was not in possession thereof; and it was held that his act was a conversion of the securities, and that such conversion affected a discharge of the debt to an amount equal to the actual value of such security, ánd, such security being the promissory note of a third person, that the amount unpaid upon such note at the time of the conversion of such note was prima facie the actual value. In this case the plaintiff retained posession of the securities, and had them in his possession at the time of the trial. Treating the attempted sale as a nullity left the possession in it with the same legal effect as when it originally received them. The attempted sale and its effect having been litigated in this action, I think justice to the defendant requires that the result should be set forth in the judgment. While the plaintiff’s complaint sets forth a payment upon the said note, and demand of judgment less than the amount of the face of the note, still, that payment being alleged in the complaint as the proceeds of an alleged sale of collateral securities, 1056 and the defendant, by his answer, having repudiated such sale, and the trial court having found for the defendant upon that issue, I do not think that justice requires that the plaintiff' should, nevertheless, be confined in his recovery to the original demand of the complaint, and that the appellant’s contention in that respect should not be sustained The appellant claims that the sum of $910, collected by the plaintiff, being interest upon the collateral attached to the note, should have been credited upon the note in suit. The interest so collected was collected prior to the giving of the note sued upon, and was apparently credited upon the note given prior to this one. The former note had been reduced to $8,000, and the giving of the note in litigation is presumptively an adjustment of the accounts between the parties at the sum for which the note was given. The contention of the appellant in that respect cannot therefore be sustained. The judgment appealed from should therefore he corrected and modified by adjudging that the sale of the so-called Crane notes, and the purchase thereof by the plaintiff, were and are null and void, and the same are now held by the plaintiff as pledgee, and not as owner thereof, and, so modified, should he affirmed, with costs. All concur.