10 Utah 3 | Utah | 1894
This is an action in trover to recover damages for the wrongful conversion of three promissory notes, secured by 2,000 shares of stock of the Bullion-Beck & Champion Mining Co. The notes were made by John Beck in favor of the plaintiff Hyams. The plaintiffs, in substance, allege that they were the owners of the notes on the 18th day of November, 1891; that two of them were for $5,000 each, and one for $4,719.20, bearing interest at 7 per centum per annum, and secured by the 2,000 shares of stock which were in escrow in the State Bank of Utah, to be sold at the request of the legal holder upon default in payment being made; that they were entitled to the immediate possession of the notes and. stock; that on the said day the defendants, being in possession of the same, unlawfully disposed of and converted the notes and stock to their own use, to the plaintiffs’ damage in the sum of $15,291.61. The defendants deny the allegations of the complaint, and, in substance, aver that on the 11th day of May, 1891, the plaintiffs made and delivered to the defendant Salisbury two notes, each for the sum of $4,000, due November 11,
It appears from the evidence that the transactions between the plaintiffs and defendants in relation to the making of the notes, delivery of the securities, default in payment, sale of the securities, and tender of the balance and notes, occurred substantially as alleged in the answer. It further appears from the evidence and stipulation of
The case was tried before a referee, who found, substantially, the following facts: That the plaintiffs on May 11, 1891, borrowed of the defendants $8,000, and executed therefor, to defendant Salisbury, two notes of $4,000 each, on which notes there was due and unpaid, on the 18th of November, 1891,. the sum of $8,748; that, as collateral security for the joint loan, the plaintiffs delivered to the defendants the Beck notes and stock; that on the 18th of November, 1891, the plaintiffs tendered to the defendants the sum of $8,748, in payment of their notes; and that the defendants refused to accept the tender, and to deliver the securities to the plaintiffs. He also found that the notices above mentioned were given, and a tendér of the surplus was made, by the defendants; and that, the fair market value of the Beck notes and stock collateral
It will be observed, from an examination of the pleadings, evidence, and findings of the referee, that the important question to be determined in this case is the sufficiency and effect of the tender made by the plaintiffs to the de-. fendants. The tender was made in writing, under section 3964, Comp. Laws 1888, which provides as follows: “An offer in writing to pay a particular sum of money, * *
* is, if not accepted, equivalent to the actual production and tender of the money.’5 Ordinarily, where a party makes a tender, independently of the statute, he must actually produce the money to the creditor. It must be in sight, capable of immediate delivery, and the creditor be allowed a reasonable time, to determine the amount due, and to decide whether he will accept. A tender in writing under the statute is “equivalent to the actual production and tender of the money.55 To have this effect, however, the party tendering must have the ability to produce it, and must act in good faith. Nor does such a
Conceding then, for the purpose of this decision, that the tender was sufficient, the question is, what was its effect on the securities of the defendants? Did it discharge the lien of the pledgees, and leave them in the same position as if no securities had been pledged? Counsel for appellants contend that such was the effect, — that, if a valid tender be made, the lien is extinguished and gone forever. In such event the pledgee, upon refusal of the tender, would have no remedy except his action for the debt against the pledgor. Counsel for respondents insist that such result follows only upon a tender, good in every particular, made on the very day when the debt is due,
In some of the states, a tender of the amount due on a mortgage, made after the law day, extinguishes the lien the same as a tender at common law, made on the law day. The property is thereby discharged from the lien, and the mortgagee is left to his remedy against the mortr gagor the same as though no mortgage had existed. To have this effect, it would seem not even necessary to bring the money into court, or to show that the tender has since been kept good. This appears to be the rule in New York and Michigan. 1 Jones, Mortg. § 893; Kortright v. Cady, 21 N. Y. 343; Jackson v. Crafts, 18 Johns. 110; Moynahan v. Moore, 9 Mich. 9; Potts v. Plaisted. 30 Mich. 149. The rule laid down by these authorities appears to be founded upon the doctrine that the mortgage is merely a pledge of the property, the ownership of which remains in the mortgagor, and that the tender, after default, produces the same result as a tender in the case of a pledge of personal property; which is a departure from the common-law doctrine that a mortgage is a Conveyance to the mortgagee in fee, subject to be defeated b.y performance of the condition by the mortgagor. The general rule adopted by the weight of authority, from the time of Lord Coke down to the present, appears to be that at common law a tender of the debt, secured by mortgage,
The next question is, does the doctrine in relation to mortgage security apply to a pledge or bailment of personal property? At common law a pledge is a bailment of personal property, as a security for some debt or engagement. Goods and chattels, money, debts, negotiable
This appears to be the settled law, and the rule seems to be founded in justice and fair dealing, for it would be difficult to conceive of any good reason why the creditor should be allowed to refuse payment of the money when tendered in good faith after maturity, and yet retain the pledge, or a lien upon it, for the debt. The mere caprice of the creditor might result most disastrously to the debtor through his inability to free his property from the debt. Nor would the slow process of a bill in equity afford an adequate remedy, for, on a bill to redeem, interest and costs would accumulate unless the debtor kept good the tender, "in which event he would be deprived both of the use of his money and property until the end of the suit. On the other hand, the creditor who refuses payment when lawfully tendered reaps simply the reward of his own folly. His lien is gone, but the debt remains, for which he has his right of action against the debtor. After tender and refusal, the pledgee will be liable for injury to the pledge'. Story, in his work on bailments (section 341), states the law as follows: “The pawnee makes himself responsible for all losses and accidents, whenever he has done anys act inconsistent with his duty, or has refused to perform his duty. If, therefore, the pawner makes a tender of the full amount of the debt for which the pawn is given, and the pawnee refuses to receive it, or to deliver the pledge, the special property which he has in it is determined, and he is henceforth treated as a wrongdoer, and the pawn is at his sole risk.” And Jones, in his Treatise on the Law of Pledges (section 543), says: “A creditor, by refusing a tender properly made of the amount of a debt secured by a pledge, converts it to his own use. He makes it his own so far as to run the chance of any de
In the case at bar, the pledgors allowed the day of maturity to pass without payment. The pledgees upon notice sold and bought the pledged property. While the sale to themselves was not absolutely void’, yet it was voidable. The pledgors could elect to affirm it or not, as they chose. If they had affirmed the sale, then it would have been valid for all purposes, and the only liability on the part of the pledgees would have been to ciedit the pledgors with the proceeds, or account to them therefor. As, however, they elected to disaffirm the sale, it must be held void, the same as though no sale had taken place, and, therefore, as creating no liability against the pledgees, who, upon such disaffirmance, held the property the same as before the sale. Story, Bailm. § 319; Schouler, Bailm. § 230; Hamilton v. Bank, 22 Iowa, 306; Griggs v. Day (N.
Having reached this conclusion, and, as before intimated, having grave doubts as to the sufficiency of the tender, we do not deem it necessary to pass upon the question of the measure of damages, as the case must be reversed and remanded, with directions to the court below to grant a new trial, with leave to the parties to amend their pleadings, if they deem it necessary. And it is so •ordered.