Wm. H. Chaffe & Co. v. Purdy

On The Merits. There was nothing extraordinary in the business transaction which gave occasion for this litigation. The defendant offered his notes to plaintiffs his creditors, in order to obtain time, and offered certain notes, secured by mortgage, as collateral security. They were accepted. In accordance with agreement between pledgor and pledgees, the pledged notes remained in the hands of the attorney, who had them for .collection at the time the pledge was made and suit brought on *395 the pledged notes. Not the least disagreement arose between pledgors and pledgees 'during the foreclosure and injunction proceeding. The defendant was at the place; plaintiffs resided at some distance. The defendant in his answer sets forth that “ said Ohaffe & Sons took full and complete control and possession of said notes, and exercised all the rights of ownership over them — even denying unto your respondent any right to stipulate or dictate what sKould be done with them.” These allegations are not supported by apreponderance of evidence. The testimony of one of the plaintiffs and of the attorney is uncontradicted in many respects. It does not corroborate that of the defendant about the ownership of the notes and the management of the suit. It is not shown that plaintiffs attempted to exercise rights of absolute ownership. Defendant earnestly contends that plaintiffs are responsible for the whole of the amount of the pledged notes, for the reason that after the property mortgaged had been sold-to satisfy the collateral security, suit was not brought for the balance due. The debtor owned only this mortgaged property. He was insolvent at the time. The pledgees can not be held responsible for not having brought suit against an insolvent debtor. “The pledgee is responsible only for the damages sustained by the pledgor, and for the net sum he was legally able to collect.” Blouin v. Harter & Herbert, 30 An. 714; Grove vs. Robert, 6 An. 210. * * * * * ijs * sfs The defendant complains that the rent was not collected while the sheriff had the property in hjs possession under the foreclosure proceeding. He hastily assumes that it was the duty of the sheriff to collect rent, and charges up damages to plaintiff’s account. The dwelling seized was occupied by the debtor; i. e., the debtor of the collateral security, and his family. “The sheriff * * * can be held responsible only where the property is occupied by tenants who are bound to pay rent, or where the property being vacant or susceptible of being rented, he fails to take proper steps to rent it for a limited time.” Conte vs. Handy, sheriff, 34 An. 863. As there was no authority in the sheriff to collect rent from the proprietor for the occupancy of his own dwelling *396 house, before divesture of Ms title:, Ms authority being limited to needful acts to secure possession, the defendant, can not recover any d'amages-from the pledgees upon the sheriff’s failure to collect rent from the proprietor, who is permitted to occupy his dwelling while under seizure. The attorney (named by pledgor), employed to sue on these pledged notes, testifies: “I never took any proceeding to force the collection of rent while the property was under seizure, because it was the residence of defendant Dubose, in which he resided, and owned by him — was neither vacant nor occupied by tenants, and under the law, in my opinion, the sheriff could not force him to pay rent while he occupied it as a residence. “ I brought two suits on the injunction bonds. I never interfered with Mr. Purdy’s bringing proceedings for damages. .1 consulted with Mr. Purdy during, all this litigation frequently. Mr. Purdy never instructed me to bring suit for damages on the injunction bonds.” Lastly, defendant alleges that plaintiffs are responsible in not having brought suit for damages on the injunction'bonds taken in two suits to arrest the foreclosure proceeding. The pledgor could have controlled these bonds and could have brought suit on them to prevent loss. The pledgee has merely special property in the note' pledged to secure the principal obligation. He is not obliged to take measures to collect it. Either the pledgor or the pledgees may'sue for an injury done to the pledge, a fortiori, he may sue to recover a right incidentally arising during' the time the property is in pledge. Story on Bailments, Section 94. The defendant has not shown any actual loss on these bonds. True, it is alleged that the sureties once solvent, are no longer, solvent. This is not proven. In some respects this case has features analogous to that of Commercial Bank vs. Martin, 1 An. 345. As in that case, the plaintiffs were obliged to act through an attorney. He- counseled with the pledgor, and in all things connected with -the foreclosure his counsel prevailed. The plaintiffs used reasonable diligence in the choice. *397 The pledgor was consulted and indeed suggested his employment. The evidence discloses he was left at liberty to act and to recover everything possible on these bonds. Plaintiffs are not responsible in damages. We think the judgment should be affirmed. Judgment affirmed.