31 Colo. 220 | Colo. | 1903
delivered the opinion of the court.
Suit was brought by the plaintiff, Joslyn, against the appellant, Winchester, and others, upon the following promissory note:
“2,500. Cripple Creek, Colo., Feb. 17, 1896.
Thirty days after date for value received we jointly and severally promise to pay to the order of Geo. A. Joslyn two thousand five hundred dollars, payable at'the First National Bank of Cripple Creek, Colo., with interest at the rate of two per cent per month from date until paid.
The Winchester-Howard Investment Co.
Josiah Winchester, President.
Josiah Winchester.
Herbert Warne.”
Credits in the sums of $150. $250 and $10 are endorsed upon the note.
It is alleged in the complaint that at the time of the delivery of the note the defendants delivered to plaintiff in pledge to secure its payment certain certificates of stock in certain mining companies, but that, the defendant having failed to pay the interest upon said note and the principal thereof, the said stock was sold at the front door of the First National Bank in Cripple Creek for the sum of ten dollars, and that said amount was credited upon the note.
The defendants answered, admitting the execution of the note and declaring that the said George A. Joslyn caused the said stock to be sold without authority from any of the makers of the note, and that he was the purchaser of said stock at the sale, and that he converted the said stock to his own use,
In the reply, the facts set forth in the answer and counterclaim are denied.
The court instructed the jury to render a verdict in favor of the plaintiff and against the defendants for the sum of $4,690167, which was done, and the defendant Winchester has appealed to this court.
But two questions are presented for our determination. The sale, not having been authorized-by the pledgor, and it not being a’ judicial sale, is conceded to be illegal. The appellant contends that the action of the appellee in purchasing the pledged property at the sale was tantamount to the conversion of the stock, and subjects, the pledgee to an accounting for its fair market value at the time of .the conversion. The rule is not as the appellant asserts. When collateral security is purchased by the pledgee, the pledgor has an election to either ratify or dis-affirm the sale. If he ratifies the sale, the title to the security becomes absolute; if .-he disaffirms it, the property remains in the hands of the pledgee as security, subject to the right of the pledgor to redeem by a payment of the debt. When, however, the pledgee by an unauthorized sale puts it out of his power to restore the pledged property, he is liable for the amount of the value thereof to the pledgor. In such case it is not necessary, that a tender of the amount of the debt or a demand for the return of the property be made. — Jones on Pledges, §§ 570, 571, 571a. - . .
If we were to assume that a conversion takes place when a pledgee fraudulently purchases the pledged property at an illegal sale, it cannot avail the appellant, because not only was there no statement of facts constituting fraud in the answer, but there is no allegation of fraud contained therein. The plaintiff in his replication asserted his right to the stock under the sale, and alleged that the stock was of no greater value than the sum of ten dollars. It is insisted that the assertion of absolute ownership is equivalent to a conversion; but we do not think the fact that he has asserted a title he does not possess constitutes a conversion. His mere assertion did not in any way deprive the defendant of his right to redeem, and no one is shown to have been injured by the statement.
In the amended answer and counterclaim,-the defendant Winchester sets up a contract between the plaintiff (appellee) and The Winchester-Howard Investment Company which the plaintiff, it is alleged, failed and refused to carry out, to the damage of said company in the sum of eight thousand dollars; that tire said company has filed its amended answer and counterclaim setting forth the said contract -and alleging a breach thereof, and that by reason .of the
The judgment is affirmed. Affirmed.