25 Minn. 202 | Minn. | 1878
The defendant is a religious corporation' incorporated under Gen. St. c. 34, tit. 4, and located at Worthington. By its trustees, it executed several promissory notes, dated July 1, 1873, but not delivered till February, 1875, payable to the order of A. P. Miller, at different times,for different sums. They were executed to secure the purchase-money of real estate sold the corporation. In February,. 1875, Miller pledged five of these notes to one Bartlett, to-secure a debt which he owed to Bartlett, and endorsed in-blank and delivered them to Bartlett.
These notes fell due at various dates between July 1,1876, and July 1, 1878, and the principals thereof amounted to-$4,750. Subsequent to the contract of pledging, Miller, for a part of the debt he owed Bartlett, executed to him a promise sory note for $1,550, and it was then agreed between them that if such note was not paid at maturity, Bartlett might-make the money out of the pledged notes in the best way he could, and that he might sell the same for that purpose. This note to Bartlett fell due in August, 1875, and was not-paid, and Bartlett thereupon notified Miller by letter that if it was not paid within ten days, he would make the best disposition he could of the pledged notes to raise the money, either by public or private sale. In January, 1876, Miller' assigned the pledged notes to plaintiff. At an informal meeting, at which were present a majority of the defendant’s trustees, it being understood that the pledged notes could be 'bought from Bartlett for about $1,700, it was agreed that the notes should be bought, and the funds which defendant had on hand used in paying for them, so far as such funds would go, one of the trustees agreeing to advance the remainder. In December, 1875, this trustee concluded with an agent of
The pledge of personal property, to secure a debt, generally vests in the pledgee the power to make the money by a sale of the property, without a decree of court. It has been affirmed that this power to sell does not attach to a pledge of negotiable paper. Wheeler v. Newbould, 16 N. Y. 392. It is not néeessary to decide the point in this case, for, by the agreement between the pledgor and pledgee, the latter was authorized to make the money out of the notes pledged, in the best way he could, and sell the same for that purpose. So that, so far as the power to sell was concerned, the pledge was put upon the same footing as though the law had, as in case of a pledge of other property, attached such power to sell. In case of a debt pledged, the pledgee may receive payment of the debt, and may sue for and collect it. White v. Phelps, 14 Minn. 27. To receive payment, to sue for and collect, and to sell, are the only ways in which the money can be made out of pledged negotiable paper; and the agreement between the pledgor and the pledgee in this instance authorized the pledgee to resort to either of them, and he resorted to the latter. It was competent for the parties to agree how the sale should be made; but without any such agreement, and where the power to sell is merely given, the power will be construed to be such a power as exists in respect to pledges generally, and must be exercised in the same way. In respect to pledges generally, the power can be exercised only upon reasonable notice to the debtor to redeem, and of the time and place of sale. Wheeler v. Newbould, 16 N. Y. 392; White v. Phelps, 14 Minn. 27; Stearns v. Marsh, 4 Denio, 227; Cortelyou v. Lansing, 2 Caines Cas. 200. This notice is essential to secure fairness in the transaction, and to enable the pledgor to protect his interests.
The notice in this case, was only of an intention to sell, without specifying time or place, and was similar to that in
Order reversed, and new trial ordered.