The opinion of the court was delivered, June 25th 1866, by
Thompson, J.
We need not go back of the eases of Davis v. Funk, 3 Wright 243, and Sitgreaves v. The Bank, 13 Wright 359, for the doctrine that a pledgee or holder of a collateral security cannot appropriate it in satisfaction of the debt intended to be secured, at his own option, unless in pursuance of a contract to that effect, nor sell it without first giving notice to the pledgor, pf his intention to do so, in order that he may have an opportunity to redeem it if he desires. The sale must be public when it is made, and the notice must specify both time and place. That this is the law of this species of bailment admits of no doubt. It is the same in the civil and common law: Story on Bail. § 319.
The plaintiff’s proofs establish beyond controversy the pledge as collateral, of eighty shares of the Atlantic and Ohio Telegraph Co. stock, held by Mrs. Diller, to John R. Brubaker, one of the defendants, as security for $1000 loaned to her, and in the receipt for which, the latter stipulates, “ I hold as collateral security for the payment of one thousand dollars loaned her this day, with interest until paid.” Then follows the note of Peter Diller for the money loaned by J. R. & Philip Brubaker, payable in nine months, with interest at the rate of 9 per cent, per annum. This [503]*503receipt and note bear date at the same time, to wit: October 31st 1855. The interest was regularly paid for several years and until Diller went South. About the 17th June 1861, pursuant to a power of attorney accompanying the certificate of stock, a transfer of the stock by the attorney in fact of Mrs. Diller was made to J. R. Brubaker. Of course the blank power was filled up with the name of the attorney by the holders of the certificate. Brubaker, in 1862, transferred twenty shares of the stock to Mrs. Vogdes, and subsequently other twenty shares to the plaintiffs. The remaining forty shares and dividends received constitute the matter in controversy in this bill.
On May 4th, Peter Diller authorized R. F. Raley to settle up and pay off his note held by the defendants, and wrote to John R. Brubaker to this effect, requesting him to settle with Raley about the note and interest, and adjust the account of dividends and stock as he might think just and right. On the presentation by Raley of an order for the stock, and an offer to pay the note and settle for the dividends, Brubaker declined doing either, claiming the stock as his own, excepting the twenty shares transferred to Mrs. Vodges. The grounds relied on to justify the defendants were entirely insufficient, and so held by the court below. The principal one was, that' by the terms of the pledge the defendants, “ after holding the stock awhile,” — how long is not said — might treat the right to redeem as abandoned, and appropriate the stock in payment of the note. But nothing of this is to be found in the receipt given for the stock dated the 31st of October. That contains the contract on this point. By that the defendant J. R. Brubaker was to hold the stock as collateral for the loan. Nothing more is said as to its disposition. This left it subject to the law of the pledge. This, we have seen, would authorize a sale of it after the note fell due, upon notice of an intention to sell, or under proceedings in court. The date of the contract is the 31st of October, not the 10th. The letter of that date contained a proposition that if a loan could be effected he would pledge stock, which he had no objection, after it was held awhile and the loan not paid, might be kept by the lender. This was not a proposition specially made to the defendants, nor was it ever accepted by them. Different terms were stipulated for, as rye have seen by the last contract, and they must control in the absence of anything to impeach them.
The allegation that all was settled by the transfer of twenty shares of the stock to Mrs. Vogdes, and a payment of money to her, without stating any amount, amounts to nothing in the absence of testimony to show authority to make such settlement. Indeed, this idea seems to be entirely inconsistent with other statements in the letter of J. R. Brubaker in which this appears, and which would not have been evidence at all but for a subse[504]*504quent transaction endorsed on it by Diller. Some of these statements aré to the effect that he (J. R. Brubaker) did not expect the stock would be redeemed ; that he had sold his own and kept the plaintiff’s; and for the purpose of holding the plaintiff’s he sold his at a low stage of the market, and was willing to credit them at the same rate at which he sold his. All this is inconsistent with the idea of a previous payment. So the court below thought, and in this we agree. The matter principally relied on by the defendants to defeat the plaintiff’s claim to an account, is that there was a settlement of the stock and loan in May 1863. In other words, there was an accord and satisfaction between the parties'.
But we think the evidence of this, is insufficient, legal difficulties being out of the wTay. There are numerous authorities that in “ accord and satisfaction,” it must appear that the satisfaction made was advantageous to the plaintiff. The instance given illustrates the idea, namely, the restoring to the plaintiff his own property, is not sufficient to support the plea. Nor the payment of an inferior for a greater sum and the like. For the doctrine on the point, see 1 Bac. Abr. tit. Accord and Satisfaction, A.; Dyer R. 75; 5 East 230; 1 Strange 426; 2 T. R. 24; 11 East 390; 5 Day 360 ; 1 Root 426 ; 1 Wend. 164; 3 Id. 66 ; 14 Id. 116; 3 J. J. Marshall 497. So it must be averred that the satisfaction was accepted : 3 Wright 147.
Neither the accord nor the satisfaction was proved. The stock was not offered on the terms of a settlement of accounts, nor so received. Nor was the note the consideration for the pledge returned or tendered to the plaintiffs. The defendants have no ease on the footing of “ accord and satisfaction.” But waiving the want of a formal plea, does the evidence disclose a case which in equity amounts to a release of the plaintiffs’ right to call for an account, because of any supposed settlement in May 1863 ? We may as well say just here that we do not think it does ; and this was the sole ground upon which the complainants’ bill was dismissed in the court below. The twenty shares then receipted by the plaintiffs were not offered on the terms of settlement, but as a gift or present. It was so offered in reply to the plaintiff’s request for a settlement, and his offer to satisfy his notes by credits and payments. They were not receipted upon any such express terms in the receipt, but upon a claim of ownership. Nor is there anything to the contrary established by the oral evidence. Raley, who acted in this matter between the parties, notwithstanding some pressure on the point, does not go to anything like the length of proving a settlement by a receipt of these shares of stock. He says he “ thought” it was so received, that that was his “ impression.” That Diller “ did not say so in so many words, but from what he said and did, I gathered the impression that he did [505]*505acquiesce in the settlement.” This was all inference which the witness could not draw. We have nothing else from Raley, and he is the only witness that says anything upon the subject. Neither does his testimony, any more than the receipt, make out a settlement.
The declaration of Diller on that occasion as proved by the witness shows the contrary.
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The opinion of the court was delivered, June 25th 1866, by
Thompson, J.
We need not go back of the eases of Davis v. Funk, 3 Wright 243, and Sitgreaves v. The Bank, 13 Wright 359, for the doctrine that a pledgee or holder of a collateral security cannot appropriate it in satisfaction of the debt intended to be secured, at his own option, unless in pursuance of a contract to that effect, nor sell it without first giving notice to the pledgor, pf his intention to do so, in order that he may have an opportunity to redeem it if he desires. The sale must be public when it is made, and the notice must specify both time and place. That this is the law of this species of bailment admits of no doubt. It is the same in the civil and common law: Story on Bail. § 319.
The plaintiff’s proofs establish beyond controversy the pledge as collateral, of eighty shares of the Atlantic and Ohio Telegraph Co. stock, held by Mrs. Diller, to John R. Brubaker, one of the defendants, as security for $1000 loaned to her, and in the receipt for which, the latter stipulates, “ I hold as collateral security for the payment of one thousand dollars loaned her this day, with interest until paid.” Then follows the note of Peter Diller for the money loaned by J. R. & Philip Brubaker, payable in nine months, with interest at the rate of 9 per cent, per annum. This [503]*503receipt and note bear date at the same time, to wit: October 31st 1855. The interest was regularly paid for several years and until Diller went South. About the 17th June 1861, pursuant to a power of attorney accompanying the certificate of stock, a transfer of the stock by the attorney in fact of Mrs. Diller was made to J. R. Brubaker. Of course the blank power was filled up with the name of the attorney by the holders of the certificate. Brubaker, in 1862, transferred twenty shares of the stock to Mrs. Vogdes, and subsequently other twenty shares to the plaintiffs. The remaining forty shares and dividends received constitute the matter in controversy in this bill.
On May 4th, Peter Diller authorized R. F. Raley to settle up and pay off his note held by the defendants, and wrote to John R. Brubaker to this effect, requesting him to settle with Raley about the note and interest, and adjust the account of dividends and stock as he might think just and right. On the presentation by Raley of an order for the stock, and an offer to pay the note and settle for the dividends, Brubaker declined doing either, claiming the stock as his own, excepting the twenty shares transferred to Mrs. Vodges. The grounds relied on to justify the defendants were entirely insufficient, and so held by the court below. The principal one was, that' by the terms of the pledge the defendants, “ after holding the stock awhile,” — how long is not said — might treat the right to redeem as abandoned, and appropriate the stock in payment of the note. But nothing of this is to be found in the receipt given for the stock dated the 31st of October. That contains the contract on this point. By that the defendant J. R. Brubaker was to hold the stock as collateral for the loan. Nothing more is said as to its disposition. This left it subject to the law of the pledge. This, we have seen, would authorize a sale of it after the note fell due, upon notice of an intention to sell, or under proceedings in court. The date of the contract is the 31st of October, not the 10th. The letter of that date contained a proposition that if a loan could be effected he would pledge stock, which he had no objection, after it was held awhile and the loan not paid, might be kept by the lender. This was not a proposition specially made to the defendants, nor was it ever accepted by them. Different terms were stipulated for, as rye have seen by the last contract, and they must control in the absence of anything to impeach them.
The allegation that all was settled by the transfer of twenty shares of the stock to Mrs. Vogdes, and a payment of money to her, without stating any amount, amounts to nothing in the absence of testimony to show authority to make such settlement. Indeed, this idea seems to be entirely inconsistent with other statements in the letter of J. R. Brubaker in which this appears, and which would not have been evidence at all but for a subse[504]*504quent transaction endorsed on it by Diller. Some of these statements aré to the effect that he (J. R. Brubaker) did not expect the stock would be redeemed ; that he had sold his own and kept the plaintiff’s; and for the purpose of holding the plaintiff’s he sold his at a low stage of the market, and was willing to credit them at the same rate at which he sold his. All this is inconsistent with the idea of a previous payment. So the court below thought, and in this we agree. The matter principally relied on by the defendants to defeat the plaintiff’s claim to an account, is that there was a settlement of the stock and loan in May 1863. In other words, there was an accord and satisfaction between the parties'.
But we think the evidence of this, is insufficient, legal difficulties being out of the wTay. There are numerous authorities that in “ accord and satisfaction,” it must appear that the satisfaction made was advantageous to the plaintiff. The instance given illustrates the idea, namely, the restoring to the plaintiff his own property, is not sufficient to support the plea. Nor the payment of an inferior for a greater sum and the like. For the doctrine on the point, see 1 Bac. Abr. tit. Accord and Satisfaction, A.; Dyer R. 75; 5 East 230; 1 Strange 426; 2 T. R. 24; 11 East 390; 5 Day 360 ; 1 Root 426 ; 1 Wend. 164; 3 Id. 66 ; 14 Id. 116; 3 J. J. Marshall 497. So it must be averred that the satisfaction was accepted : 3 Wright 147.
Neither the accord nor the satisfaction was proved. The stock was not offered on the terms of a settlement of accounts, nor so received. Nor was the note the consideration for the pledge returned or tendered to the plaintiffs. The defendants have no ease on the footing of “ accord and satisfaction.” But waiving the want of a formal plea, does the evidence disclose a case which in equity amounts to a release of the plaintiffs’ right to call for an account, because of any supposed settlement in May 1863 ? We may as well say just here that we do not think it does ; and this was the sole ground upon which the complainants’ bill was dismissed in the court below. The twenty shares then receipted by the plaintiffs were not offered on the terms of settlement, but as a gift or present. It was so offered in reply to the plaintiff’s request for a settlement, and his offer to satisfy his notes by credits and payments. They were not receipted upon any such express terms in the receipt, but upon a claim of ownership. Nor is there anything to the contrary established by the oral evidence. Raley, who acted in this matter between the parties, notwithstanding some pressure on the point, does not go to anything like the length of proving a settlement by a receipt of these shares of stock. He says he “ thought” it was so received, that that was his “ impression.” That Diller “ did not say so in so many words, but from what he said and did, I gathered the impression that he did [505]*505acquiesce in the settlement.” This was all inference which the witness could not draw. We have nothing else from Raley, and he is the only witness that says anything upon the subject. Neither does his testimony, any more than the receipt, make out a settlement.
The declaration of Diller on that occasion as proved by the witness shows the contrary. He said he would settle if Brubaker would transfer ten shares more of the stock to Mrs. Vogdes, and that he would write to Brubaker on the subject. No word escaped him that we can discover to the effect that he considered the shares offered and received as a settlement of his claim in full. Accordingly, on the day following the date of Raley’s letter enclosing Diller’s order for the twenty shares of stock, he (Diller) did write to J. R. Brubaker, but so far from acknowledging a settlement, he proposed one which was not accepted or noticed by the latter in any manner, nor was it followed by insisting on the alleged settlement, and offering to give up Diller’s note. That is still held by the defendants. The inference from this can be none other, I think, than that no settlement was completed. The expression that Diller thought the terms of settlement “ hard,” is not proved to have been made by him at all. It is obviously simply given by the witness as his own inference on the subject, but even if made, it would avail little in favour of the defendants in the face of the undoubted fact that a settlement was due between the parties, and had not been previously made. If the transaction had been intended as a final settlement between the parties, why was it not so stated in the receipt ? Raley knew enough for this, so did Brubaker, yet he never complained that it was not so stated, nor afterwards wrote or said a word affirming or disaffirming it. If it was meant as a mode of raising an implication of settlement, it will not avail. A trustee is bound to put his cestui que trust in possession of the full and true state of his affairs, before any form of settlement will bind. It is the policy of the law to discountenance all but the most open and satisfactory dealing between parties standing in the attitude to each other of trustee and cestui que trust. They don’t deal at arms’ length as strangers. That was a mistake made by defendants here. Nothing could be fairer than the plaintiffs’ offer to pay off the note and interest accrued, and get back the stock, and an account of the dividends received.- This is what they were entitled to by law, unless the trust was clearly otherwise arranged and settled by the parties. We see no evidence that it was so arranged, and the plaintiffs are entitled to the remedy they have invoked.
The argument that the receipt of the twenty shares operates to estop the plaintiffs from asking an account needs no effort to answer it. It is not shown wherein the defendants were misled or injured by it, even if they believed in it. This is an essential to an estop[506]*506pel. If the transaction of May 1868 did not operate as a release, it could not as an estoppel. The necessary evidence is wanting entirely for that. We see nothing which bars the plaintiffs of their right to an account and relief sought. The defendants are entitled to a credit of the number of shares out of the whole number transferred to them to the extent of the number they have retransferred to the plaintiffs or on their order, and the plaintiffs to a credit against the principal and interest remaining due on Diller’s note of the dividends received by the defendants on .the stock, and on the plaintiffs paying or satisfying the balance of the debt and interest in full due the defendants, then they will be entitled to a retransfer of the remaining stock, and payment of any excess of dividends over and' above paying the note and interest, if any exists.
The decree of the Court of Common Pleas is reversed, and the record is remitted to the court below, with directions to enter the proper decree, and appoint a master to take and report an account; the respondents to pay the costs of this appeal.