Davison v. Green Lake State Bank

Rosenberry, J. Both the municipal and the circuit courts found that the defendant bank had notice of the transfer of the equity of redemption by Edwards to the plaintiff. The question presented here is: Has the assignee of the pledgor of shares of stock in a corporation such an interest therein as makes it the duty of the pledgee to deliver the same to the assignee upon payment of the indebtedness by the pledgor? Considerable argument was made to the effect that the notice given by the plaintiff to the defendant was not sufficient. It is the testimony of the plaintiff that he went to the bank with the receipt issued, and exhibited the receipt, together with the assignment on the back thereof, to the defendant, and offered to leave the receipt with the bank. In view of these facts, which must be taken to be found in favor of the plaintiff, we find no defect in the notice given [610] by the purchaser of the equity of redemption to the pledgee of his rights therein. The liability of the defendant bank under.the circumstances seems to be clearly determined by the decisions upon that subject. If the pledgee is notified by a person that the latter is entitled to the collateral, subject to the pledge, and the pledgee upon payment of the debt returns the collateral to the pledgor, the pledgee is liable to such third person. 2 Cook, Corp. (8th ed.) § 468, and cases cited; 21 Ruling Case Law, 674; Curry v. Wis. Nat. Bank, 149 Wis. 413, 136 N. W. 549; Southern I. Co. v. Wharton Nat. Bank (Tex. Civ. App.) 144 S. W. 701; Hughes v. Settle (Tenn.) 36 S. W. 577. Whether the defendant bank, as intimated by the circuit judge, parted with possession of the stock and permitted its resale to a third party because it overlooked the plaintiff’s rights therein or did it in disregard of the plaintiff’s rights is immaterial so far as its liability is concerned. Notice having been brought home to it, as found by both courts, that the plaintiff was the assignee of the equity of redemption, it was the duty of the bank thereafter to protect the plaintiff in his rights by delivering the stock upon repayment of the amount which was pledged to the plaintiff. Ainsworth v. Bowen, 9 Wis. 348. By the Court. — Judgment affirmed.