Bryson v. Rayner

Weisel, J., delivered the opinion of this Court. In the cases of the President and Directors of the Maryland Eire Insurance Company and the Baltimore Marine Insurance Company against William P. Dalrymple, decided at the present term, this Court fully considered the duties and responsibilities of the pledgee of stocks taken and held as collateral securities for loans made to the pledgor. In those eases we decided that a sale of such stock at the public stock [431] board, no fraud appearing in the transaction, was a valid public sale in Maryland; that if the pledgee purchased at such sale, and afterwards continned to hold the stock, he wag to be regarded as still standing in the relation of bailee, and responsible for all the duties and liabilities incident to it, or, in other words, the bailment was not, by that act alone, broken up and destroyed. In the cause now under consideration there were two loans to the appellant by the appellee, in February and April, 1861; one of $1000 npon a pledge of ten shares of the Powhatan Steamboat Company; the other, of $945 on a pledge of nine other shares of stock of the same company. Loan papers were executed in the usual form, and the borrower failing to comply with the terms, the appellee applied for payment. With regard to the nine shares and the loan which they were given to secure, Mr. Bryson, in writing signed by him, expressly authorized the appellee to sell them in case they were not redeemed by a certain day named in the authority, and if not redeemed on that day, he was “authorized to give the stock to any broker to sell on said day.” The money not being paid on the day specified, the appellee afterwards handed the stock to a broker to make sale of the same. The broker effected this at private sale and for the full price that the stock then commanded in the Baltimore market. The nett proceeds, however, failed to pay the debt by $51.43, of which, with a statement of sale, the appellant was duly notified. The only question which can arise as to this particular transaction is, whether the written authority to sell authorized the pledgee to sell at private sale or any -way, by a broker, the nine shares. In the absence of this special authority, according to the rulings of this Court in the cases referred to, it would have been the duty of the pledgee to bave disposed of the stock at public sale, after a reasonable notice to [432] the public of the time and place of sale, or at the public stock board. We think the paper referred to was intended to enlarge the power, and to enable the pledgee to sell at private sale and without notice j otherwise, it would have been unnecessary, as the power to sell at public sale existed without it, and a prompt sale by the broker on the day he received it for the purpose would not admit of notice. We construe it as a general authority to sell by a broker at private sale or in any other way, and are of opinion that the sale made by the broker of the nine shares as proved by him was in conformity with its terms and valid. This disposes of so much of the case as relates to those shares, and as to them the relief sought was properly denied, ■ The other lot'of ten shares was offered at the brokers’ board and purchased in for the appellee, Rayner, who, according to the proof of Mr. Clagett, the clerk of the Powhatan Steamboat Company, still holds them. Mr. Rayner asserts that by the sale he became the owner of them, and that he is entitled to all dividends since, and not liable to account for the same. This assertion of right and claim is at variance with what we have decided in the cases against Dalrymple already referred to, and we regard him as still maintaining, as to these ten shares, the character of a bailee. They must be considered still as collaterals in his hands to secure the payment of the thousand dollar loan and all interest upon it, all moneys and dividends received upon them by Rayner, whilst in his hands, to be properly accounted for by him. But he contends, through his counsel, that if the appellant is aggrieved his remedy was ample at law, and that equity can afford him no relief. This position is based upon the technical distinction between a 'mortgage and a pledge, it being conceded that if the stock had been mortgaged the right to redeem in equity would be indisputable, but as the relation between bailor and bailee is a legal relation, and only a [433] qualified property passed to the bailee by the transfer of the stock to him, the remedy for any violation of the contract or tortious dealing with the property is, at law, by an action of trover or assumpsit; and the learned judge below, adopting this view, and considering that there was nothing in the case that could properly work a change of the jurisdiction, dismissed the bill of the complainant on this ground. In this, we think, he committed an error, and that the complainant was entitled to the relief ho sought as to the ten shares of stock. Although a pledge-is not technically a mortgage, the subject of it not having been assigned or transferred by an instrument known to the law as such, with a condition of defeasance, yet it is given in certain cases, as in this, as a security for debt, and, therefore, partakes of the nature of a mortgage. It is also subject to redemption. The pledgor, on payment of the debt or tender, is entitled to a return of the identical property pledged, and there can be no good reason why equity should withhold its aid for this purpose in a case in which the law cannot accomplish it. Where the article pledged is a specific chattel, the law can afford an ample remedy by replevin if the pledgee retains the possession, or by trover or assumpsit in case he has parted from it. But in a case like the present, that of stock of an incorporated company, when the shares have been transferred upon the books of the corporation and stand in the name of the pledgee as legal owner, the law falls short of the remedy asked and to which the pledgor is entitled. Equity alone, in such a case, can afford relief by an order of re-transfer. If a pawnee has two remedies, to sell at law after failure and notice, or to foreclose in equity, (2 Kents Com., 582, 588,) no reason exists why the pledgor should not be furnished with the equitable remedy to redeem. The bill in this case also prayed for an account of receipts [434] and dividends, and although the law conld afford a remedy by assumpsit if a recovery of the receipts and dividends were sought alone, equity has also jurisdiction, and more particularly where the relief asked by the bill could not have heen effected at law but by a multiplicity of suits. Story's Eq. Jur., secs. 442, 457. The cases of Ryal vs. Roberts, Barnard, 38, Hart vs. Ten Eyck, 2 Johns. Ch. R., 100, and cases there referred to. Hasbrouck vs. Vandervoort, 4 Sand., 78, are fully to the point, whilst that of Wilson vs. Little, 2 Comst., 448, does not conflict with the law as applicable to this case. (Decided July 14th, 1866.) The appellant is, in our opinion, entitled to the relief he asks as to the ten shares of stock. We will reverse the decree of the Court below with costs to the appellant, and remand the cause for further proceedings accordingly. Decree reversed with costs to appella/nt, and ca/use remanded.