Minneapolis & Northern Elevator Co. v. Betcher

Mitchell, J. As collateral security for two promissory notes, payable on or before July 1, 1886, the defendant pledged to plaintiff a quantity of wheat, authorizing it to sell the same, with or without notice, either at public or private sale, at its option, on the notes becoming due, or before, if it deemed itself likely to become insecure by keeping the wheat until the notes became due. Default having been made in the payment of the notes, the wheat was sold by the [211] plaintiff in March, 1887, and, not realizing enough to pay the claims in full, this action was brought to recover the deficiency. The only defence relied on at the trial was that set up in the amended answer, to wit, that op or about May 1, 1886, the defendant ordered the plaintiff to sell the -wheat; and, this not having been done, it was claimed that the plaintiff was chargeable with the market value of the wheat at that date, which, although less than the amount of the notes, would have netted more than in March, 1887. The court charged the jury, in substance, that if the defendant, in May, 1886, requested plaintiff to sell the grain, he was entitled to credit for what it would have brought at that date. . This instruction proceeded upon an entirely erroneous theory as to the rights and duties of pledgor and pledgee. The case is controlled by the familiar rules on that subject stated in Cooper v. Simpson, 41 Minn. 46, (42 N. W. Rep. 601.) In the absence of an express contract between the pledgor and pledgee, making it the absolute duty of the latter to sell at a specified time, he is not obliged to sell even when requested so to do by the former. The power to sell is a right, and not a duty. The exercise of ordinary care in respect to the thing pledged is the duty which the law imposes on the pledgee, and for the breach of that duty only does he become liable. After the contract of pledging is made, neither party can, by anything he alone may do, vary the duties or powers attaching to the relation. Of course the condition and characterof the property might, be such that a failure to sell would amount to a want of ordinary care; and it may be, as held in some cases, that a request to sell might be an element in the proof of negligence. But no such questions are presented in this case. The answer and the charge of the court proceed upon the theory, that, independently of any question of negligence in the care of the property, it is the absolute duty of the pledgee to sell whenever requested by the pledgor. Order reversed.