43 Neb. 489 | Neb. | 1895
Owen brought this action against Waddle to recover for the conversion of two promissory notes of third persons, payable to the order of Owen, and which the petition alleged had been pledged to Waddle as security for a bill of exchange drawn by Owen to Waddle’s order on W. T. Scott, of York. The defendant’s answer alleged that he had sold and transferred the draft to E. J. Hainer for value and had delivered to him the notes pledged to secure it in the ordinary course of business, and prior to any demand or tender of the amount due on such draft.
The case was tried to the court without the intervention <of a jury and there was a finding and judgment for Owen
There is not much dispute as to the facts. Waddle resided in Aurora. His business consisted in part at least of lending money. On Saturday, May 18th, 1889, Owen endeavored to sell to Waddle a number of notes of third persons. For some reason Waddle and Owen did not reach an agreement as to the sale, but Owen stating that he needed $50 that day, Waddle agreed to advance him that amount on the notes, and by agreement between them Owen drew a demand bill as follows:
“$51.00. ’ Hampton, Neb., May 18th, 1891.
“On demand, pay to the order of E. J. Waddle, fifty-one dollars, value received, and charge to the account of
“ T. P. Owen.
“To W. T. Scott, York, Neb.”
The one dollar, in addition to the fifty dollars advanced, was to compensate Waddle. Several notes payable to Owen’s order, and including the two notes in question, were attached to the draft, and, as both parties testified, were intended to secure the same and were to be delivered to Scott on payment of the draft. These notes, as they appear in evidence, are indorsed generally by Owen. Owen claims that there was a special agreement whereby this draft with the notes attached was to be forwarded by Waddle to York for collection. The legal effect of this evidence will call for notice in the course of the opinion. Waddle did not forward the draft to York, but retained it until the morning of the following Tuesday, when he entered the Farmers & Merchants Bank of Aurora, of which Mr. Hainer was president, for the purpose of committing the papers to the bank for collection. Mr. Hainer suggested that he would buy the draft from Waddle and give him immediate credit for the amount. This offer was accepted and the draft was indorsed, “Pay to the order of E. J.
The foregoing were all cases of real or chattel mortgages, but if there is any difference in principle, the reason is stronger for holding that a pledge of negotiable instruments follows the debt than that a mortgage does so. That notes so pledged may be passed to the assignee of the debt, see Chapman v. Brooks, 31 N. Y., 75; Goss v. Emerson, 23 N. H., 38; and that the pledge must accompany the debt, see Van Eman v. Stanchfield, 13 Minn., 70; Green v. Graham, 46 N. H., 169. It is true that in Johnson v. Smith, 11 Humph. [Tenn.], 398, it was held that the assignment of a debt secured by a pledge of personal property did not, without delivery of the pawn, carry with it and vest in the assignee a lien upon the property. But it was there suggested that in such case the pawnee might be regarded as holding possession as agent of the assignee. But this decision, based upon the necessity of the delivery of personal property to effectuate a pledge thereof, has no effect upon this case where the notes were delivered with the bill:' The bill being negotiable, Waddle had a right to transfer it by indorsement to Hainer and to transfer with it the accompanying securities. There is a vast difference between the position of a pledgee who retains the principal debt and wrongfully parts with the securities pledged thereto, and that of one who in the regular course of business transfers the debt and with it the securities,^without diverting the latter from the purpose for which they were pledged. The first act constitutes a conversion, the latter does not. If before Waddle parted with the draft he had been paid or tendered the amount due by any one authorized to accept or pay the same, and had refused to deliver the securities, we have no doubt an action would lie against
Reversed and remanded.