Majority
p. 389Willoughby vs. Comstock, President of the Mechanics’ Banking Association.
Headnote
Associations formed under the general banking law are corporations; and hence, in an action by such an institution, it is no ground of defence that the defendant is a member thereof.W. made a promissory note, which, among other things, recited, that he had deposited in the hands of the payee certain stock as collateral security, with authority to sell the same in case of non-payment. After default in payment, the stock was sold at the board of brokers in the city of New-York for its then market value, which was less than par; two days notice of the time and place of sale having been previously given to W., who made no objections. Held, in an action to recover the balance due on the note, that inasmuch as the latter contained no restrictions as to the mode of selling the stock, and none could be implied from any established custom proved in the case, the sale was properly made at the board of brokers.
Held further, that if W. intended to object to a sale at the board of brokers, he should have done so at the time of receiving the notice; and that his silence in this respect estopped him from taking the objection at the trial.
Whether if the sale of the stock had been irregular, the defendant could have availed himself of it by way of defence or recoupment, quere.
A judge’s charge or opinion, which, though erroneous, could not have exerted any adverse influence upon the rights of either party, is not ground for reversal upon error.
p. 390
Error to the superior court of the city of New-York. The action in the court below was assumpsit by Comstock, president &c., against Willoughby, on a promissory note in these words :
“$9,000. New-York, March 6, 1839.
On demand I promise to pay to John H. Cornell or order nine thousand dollars, for value received, with interest at the rate of seven per cent, per annum; having deposited with him as collateral security, with authority to sell the same on the non-performance of this promise, four hundred shares of the capital stock of the Mechanics’ Banking Association, and I. and A. Lawrence’s note in favor of Sam’I A. Willoughby, on demand, for one thousand dollars.
Sam’I A>. Willoughby.”
Endorsed—“ Pay E. D. Comstock, Esq., President of the Mechanics’ Banking Association, or order.
John H. Cornell.”
On the trial, after evidence had been given of the making and endorsement of the note and of the organization of the Mechanics’ Banking Association under the general bank-law, the plaintiff proved that, default having been made in the payment of the note, the stock thereby pledged was sold at the board of brokers in the city of New-York on the 7th of September, 1840, and that two days previous notice of the time and place of sale had been given to the defendant. The proceeds of the sale were $7406,44, (about 2b per cent, below par,) being the full market price of the stock at that time. It further appeared in evidence that the defendant was a member-of the Mechanics’ Banking Association. The defendant’s counsel insisted that the action could not be maintained for the reason, 1. That the defendant was a member of the association of which "the plaintiff was president; and 2. That the sale of the stock at the board of brokers was irregular, and the association had thereby made the stock its own. The court
p. 391
below charged the jury that the action was maintainable, though the defendant was a member of the association for the benefit of which the suit was prosecuted; and that if the defendant had sustained any damage by what he alleged to be an illegal sale of the stock, such damage was not a legitimate subject of set-off or matter of defence, but presented a claim for damages which could be recovered only in a distinct suit. The defendant’s counsel excepted to the charge. The jury rendered a verdict in favor of the plaintiff for the balance remaining due on the note after deducting the sum for which the stock was sold ; and, after judgment, the defendant sued out a writ of error.
./. Anthon, for the plaintiff in error.
.D. Lord, Jr. for the defendant in error.
We have repeatedly held that associations organized under the general bank-law of 1838, (Sess. Laws of ’38, p. 245 ; see also Sess. Laws of ’40, p. 306, and Sess. Laws of ’41, p. 351,) are to be regarded as corporate bodies. (The People v. The Assessors of Water town., 1 Hill, 616 .) The fact, therefore, that the defendant was one of the corporators, presented no objection to the ac tion against him.
It is not important to determine whether or not any miscon duct on the part of the plaintiff in the sale of the stock pledged as collateral security for the payment of the note, might have been used as a defence to the action by way of reducing the amount of the recovery within the doctrine of Reah v. M'Allister, ( 8 Wend. 109 ;) as the bill of exceptions lays no foundation for any such question. There was no restriction contained in the pledge, nor any instructions given by the defendant in regard to the mode of selling the stock; nor does the proof disclose any established custom to be observed in such cases. The mode of sale, therefore, was left to the sound dia>
p. 392
cretion of the plaintiff; and, for aught that appears, it was properly exercised. Indeed, there is nothing in the case tending to show that the stock was not sold for a fair price, or that more might have been obtained for it. But a decisive answer is, that the defendant wras duly advised of the time and mode of sale, and made no objection to either. If he was not satisfied with a sale at the board of brokers, he should then have spoken. His silence indicated an acquiescence, and must have been so understood by all parties concerned. If the sale was fairly made in accordance with the notice given to the defen dant, (and there is no pretence to the contrary,) he should be estopped from disputing its propriety in respect to mode and place. Were we, therefore, to differ with the court below upon the point whether misconduct in the sale would have afforded ground for reducing the demand as claimed within .Reab v. M'Allister, we ought not to disturb the judgment. The opinion, right or wrong, could not have exerted any adverse influence upon the rights of the defendant, according to the evidence in the case, as it was wholly extraneous and immaterial. The court would have been justified in holding directly, that there was no foundation for the application of the doctrine, as no misconduct in the sale had been proved. We do not think the case of Taggard v. Curtenius & Jones, ( 15 Wend. 155 ,) would have been decisive against the defence, if misconduct in the sale of the stock had been shewn ; as this particular ground was not taken on the argument in that case nor brought to the notice of the court.
Judgment affirmed
Cases cited
- Reab v. McAlister 8 Wend. 109 p. 391
- Taggard v. Curtenius & Jones 15 Wend. 155 p. 392