Field v. Leavitt — 37 N.Y. Super. Ct. 215

Majority

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CORTLAND DE P. FIELD, Plantiff and Repondent, v. RUFUS W. LEAVITT, and JOHN B. SURSON, Defendants and Appellants, Impleaded, &c., with Frank W. Allen and Donald McDonald, Defendants.

Headnote

In a case where personal property has been pledged to secure the payment of a note, and it appears that the pledgor and the parties to the note united in demanding a sale of the greater portion of the property pledged upon an offer procured by them, and the pledgee and owner of the note refused to make the sale, and it also appeared that if such sale had been made, and the money paid thereon, the proceeds of the sale would have paid the note except two hundred dollars, and the remainder of the property pledged would have sold for a greater sum than the balance of the note, whereas, afterwards, all the property sold for a much less sum than the note, and left a deficiency to be paid by the parties.

Held, by the court, that even assuming that the proposed purchaser was solvent and ready to make the purchase, there being no proof in the case that the refusal to sell by the pledgees was not the exercise of an honest judgment on the part of the pledgees; having regard to their own rights and interests as well as those of the parties tó the note and the owners of the property, the most that is shown and could be claimed from these facts, is the conclusion that the pledgees made a mistake, but no liability could ensue therefrom under the circumstances.

The referee who tried the case was not asked to find that the refusal was in bad faith or tortious, nor does the answer allege the same, but if the referee had found every fact as proved by the defendants’ witnesses, the defendants would have had no finding that would affect this judgment for the balance of this note.

There was conflicting evidence as to the fact of notice of the final sale of the pledge being given to the defendants. The referee was not asked to find that the defendants did not receive notice of the sale.

Held, that if the question is material the facts should be construed on the appeal so as to support the judgment.

Before Sedgwick, Van Vokst, and Speib, JJ.

Decided April 4, 1874.

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Appeal from judgment on the report of referee.

The action was against the defendants as indorsers • of a promissory nóte, made by Allen and McDonald. The makers requested the firm of C. De P. Field & Co. to indorse a note, payable to their own order. C. De P. Field agreed so to do for a consideration, provided the defendants would become prior indorsers. The note was made, then indorsed by the defendants for a consideration paid by C. De P. Field & Co., and also afterwards indorsed by C. De P. Field & Co. To secure the 'last named firm, the makers also gave them, as collateral security, certain teas and licorice, by a written pledge, which provided that in case the note was not paid, the pledge might be sold without notice, either at private or public sale. The defendants procured the discount of the note, at the Bank of America, where C. De P. Field & Co. kept an account. They procured the discount for the benefit of the makers, and paid to them the proceeds. Befere the note fell due, at the request of the defendants, C. De P. Field & Co.” took up the note at the bank, the defendants waiving presentation and notice of non-payment. In February, a few days after the note fell due, the defendants (the makers also taking part in the offer) offered C. De P. Field & Co. to procure the purchase of a part of the pledge by a firm of Gf. W. King & Co., for three thousand eight hundred dollars. It seems that G-. W. King & Co. were ready to make that purchase. Thai would have left unpaid on the note about two hundred dollar's. C. De P. Field & Co. did not make this sale, but at various times from the following March to December sold the pledge in different parcels, for an amount which left unpaid on the note about two thousand dollars. There is conflicting evidence as to whether the defendants had notice of these sales.

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By assignment the plaintiff is the sole party in interest.

John A. Foster, for appellants.

Bell, Bartlett & Wilson, for respondent.

The defendants themselves proved that after the note «was made and indorsed, money was had on its discount by the bank and paid to the makers. The circumstances attending a former transaction between the same parties, which left an amount due, to which the money obtained on this note was applied, were immaterial. This note was to be judged by its own incidents.

The defendants were not at liberty to show facts for the purpose of establishing usury either to invalidate the note or to obtain a deduction in the amount of the alleged usury, for the reason that the answer did not charge usury, or claim a deduction or plead payment.

The exceptions that relate to the matters thus far alluded to, cannot be sustained.

For a like reason, it was immaterial to show that in the former transaction, the defendant had been a broker between, the parties. One of the defendants testifies to what was the fact of this case. He swears that C. De P. Field & Co. wished the defendants to indorse the note as formerly, and they would pay them “a brokerage of forty dollars,” i. e., for indorsing the note.

The answer does not make any issue, which allows the defendants to claim that it was material to inquire whether the bank discounted the note out of funds of C. De P. Field & Co., or by an understanding with them, nor, therefore, was any statement by a member of C. De P. Field & Co., that they must themselves make a loan in consideration of receiving one hundred

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and fifty dollars, material to any issue. But in fact, the transaction was fully investigated on the trial.

The principal error urged, is that the referee did not give due effect to the evidence in the case, from defendants’ witnesses, partly corroborated by plaintiff ’ s witnesses, as to 0. De P. Field & Co. not selling a part of the pledge as advantageously as they might. The defendants maintain that it appeared by a preponderance of testimony, that the defendants and the maker of the note united in demanding the sale, and that the plaintiff ’ s firm refused .to make it. If the sale had been made, and the money paid, two hundred dollars would have been left unpaid on the note, and the rest of the pledge could have been and afterwards was sold for a greater sum.

Assuming that the proposed purchaser was solvent, and ready to make the purchase, there is no proof in the case, or offer to prove, that the refusal was not the exercise of an.honest judgment on the part of C. De P. Field & Co., having regard to their own rights and interests, as well as those of the defendants and the owner of the property. On this subject the only proof is, that C. De P. Field & Co. refused to make the sale, and that afterwards the property sold for much less. At the most, these facts of themselves, would only show that C. De P. Field & Co. made a mistake. The referee was not asked in any form to draw an inference from them, that the refusal was in bad faith or tortious. 1'1 or does the answer allege, as much, but only that the goods were sold at a great sacrifice, and could have been sold for the full amount of the note. ' If the referee had found every fact as stated by the defendants’ witnesses, giving no effect to the contradictions by the plaintiff’s ■ witnesses, the defendants would not have any finding which of itself would affect this judgment. On this point, we have passed by without considering

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whether C. De P. & Co. were accountable to the defendants for the disposition of the pledge.

The referee was not asked to find that the defendants did not receive notice of the sale of the pledge. There was conflicting evidence as to this, inasmuch as evidence was given tending to show that the defendants assented to the sale. If the question was material, we would have to construe the facts so as to support the judgment (Slyke «. Hyatt, 46 JV. Y. 259).

The judgment should be affirmed, with costs.

Yak Yorst and Speir, JJ., concurred.