Butts v. Burnett — 6 Abb. Pr. 302

Majority

p. 302

BUTTS against BURNETT.

New York Superior Court ; Special Term,

July, 1869.

Headnote

Second Motion eoe same Relief. — Conversion of Pledge.—Demand before Suit.—Waiver of Tort.—Nature of Cause of Action.

A motion should not be denied merely on the ground that a motion of the same nature has already been made and denied, if new facts are proven on the second motion, such as would be ground for giving leave to renew.

A request by the debtor to the creditor to present the note held by the latter for payment, is not a sufficient offer of payment to sustain an action for a conversion by the creditor of securities held by him.

To lay the foundation for an action against a pledgee for conversion of the thing pledged as security for a note payable on a fixed day, the debt- or’s offer and demand must be made on the day of maturity, though it would be otherwise of an action to redeem.

After the conversion by the pledgee of the thing pledged, the presentation by the debtor of a statement showing the balance due him, accompanied

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by an offer to receive it in satisfaction, amounts to a waiver of the tort

Where the cause of action is such that the plaintiff, if successful, may have execution against the person of the defendant, the superior court usually require proof that there is danger the defendant will abscond, to sustain an order of arrest before judgment.

Motion to vacate an order of arrest.

The action was brought by James R. Butts against D. Henry Burnett, to recover damages for an alleged conversion by defendant of securities belonging to the plaintiff.

The bonds in question were pledged to the defendant by the plaintiff as collateral security for the payment by the plaintiff of a “stock note,” payable a certain time after date, and which by its terms authorized the pledgee, upon default in payment by the pledgor, to sell the securities without notice.

It appeared that the defendant sold the securities before maturity of the note, and this action was brought to recover damages therefor.

An order of arrest was issued, and the defendant held to bail. A motion to vacate the order having been made and denied, the defendant now made a second motion for the same relief, upon affidavits going to show that the parties had liquidated the claim, and that the tort had thereby been waived.

The preliminary objection founded upon the allegation that a motion has already been made of a similar nature and denied, is sufficiently answered by the new fact which is proven on this motion ; and as leave would undoubtedly be given to renew the motion, it is proper to overrule the objection now.

The sale by the defendant of the Gfeorgia bonds, on the same day he received them in pledge, was clearly wrongful, and a tortious conversion of the securities (Dykers v. Allen, 7 Hill, 497 ) ; yet such wrongful sale did not render it unnecessary for the plaintiff to offer to

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pay his note at maturity, and demand a return of the bonds. Therefore, it seems to me, to put the defendant in default, and to subject him to the consequences of his wrongful act, the plaintiff was bound to pay, or offer to pay, his note on the day it became due. Upon making the offer he could simultaneously have demanded a return of the bonds, and a refusal to return them would have subjected the defendant to an action for their conversion.

But no such offer to pay was made until after the note had become payable. The evidence is, that the plaintiff’s broker, who seems to have transacted all the business, wrote letters to the defendant, requesting him' to present the note at his (the broker’s) office for payment. I believe it is usual for the debtor to seek the creditor and offer payment; not, as was attempted in this case, to require the creditor to wait upon his debtor to receive payment. The only offer to pay the note, therefore, was after it had become due and payable.

It is very questionable, I think, whether a demand after default in payment of the debt for which property is pledged as security, will render a refusal to deliver the pledged property a tortious conversion of it. lío doubt the pledgor can redeem upon a .tender of the debt, or he may recover ■ the difference between the value of the pledge and the debt. But to lay the foundation for an action for conversion, I am of opinion that an offer and demand must be made on the day, and is not sufficient if made after the day on which the debt has become payable.

In this case the stock note authorized a sale without notice, upon default in payment. Upon its maturity the defendant could have sold the bonds, and would have been liable to pay only the balance remaining after satisfying the debt. But the mere wrongful sale of the bonds did not remove the necessity of a reasonable demand and offer to pay.

The additional fact which is now for the first time established,—namely, that after default had been made in

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the payment of the note the plaintiff’s broker exhibited to the defendant a statement of the amount claimed to be due, and offered to receive the same in full satisfaction, —was a liquidation of the claim, and fixed the amount of this defendant’s liability, and was, in effect, a waiver of the tort, so that the recovery must, I think, be limited to such balance.

I do not attach any importance to the statement of Bridge that he had no authority to render the statement or to make the offer of settlement. He was the agent to make payment of the note and to receive the .pledged bonds, and the defendant had the right to regard him as having authority to waive their tortious conversion.

In any view it appears to me that the bail was excessive. If the plaintiff shall succeed in recovering a judgment for the conversion of the bonds, he will, of course, be entitled to an execution against the person of the defendant. In such cases it has been the practice of the court, in many instances, to require proof that there was danger that the defendant, by absconding, could not be subjected to final process. Ho such proof is given in this case.

Upon the whole, I am so well satisfied that the plaintiff’s recovery must be limited to the balance due, as so much money had and received to the plaintiff’s use, that I cannot have any hesitation in discharging the order. 1 have endeavored to ascertain the ground upon which the former motion was denied, that I might not conflict with such decision, but have not been able to learn it.

The motion to vacate the order of arrest must be granted.