Dorsheimer v. Nichols

2 Keyes 260

• Court: New York Court of Appeals
• Decided: June 15, 1865
• Status: Published

Opinion

Potter, J.

There was no exception taken to the finding of facts or to the conclusion of law thereon, as found by the judge on the trial. The only error complained of by exception, is, to the admission of evidence by the judge on the trial, “that at the time the release was given by plaintiff to the trustees of the Chautauque County Bank and others, of his (plaintiff’s) claim to stock sold by said trustees upon which plaintiff claimed to have a lien, “ it was the express understanding between him and Mrs. Patchin, as committee of her husband’s estate, that the plaintiff should and might retain whatever legal claim he had on the stock which was the subject-matter of such action, to the extent which it would come to her hands by the settlement authorized by the order of the court in her behalf, in case she should elect to take stock, or the proceeds of it in case she should elect to take money in lieu of stock.”,

To understand the nature and point of this exception, it must be borne in mind that the plaintiff was at that time the assignee of a portion of the debt of the Chautauque County Bank, which held this railroad stock as their collateral security ; that in law, the assignment of the principal debt carried with it the accessory collaterals, and, if part of the principal debt was assigned, the assignee was entitled to a pro rata interest in the collaterals as incident, whether mentioned in the assignment or not. The cases of Jackson v. Blodgett (5 Cow., 202); Green v. Hart (1 Johns., 590); Martin v. Moulin (2 Burr., 978); Pattison v. Hull (9 Cow., 747); Curtis v. Tyler (9 Paige, 432); Parmelee v. Dann (23 Barb., 461), aré cited to this point. I think the authorities cited sustain the proposition. If they do not, as there is no exception to reach the error, we cannot reverse it here.

The sale of these collaterals by the trustees of the Chautauque County Bank to Tifft, did not destroy the lien of the plaintiff thereto or therein. And such sale thereof, made at the time that A. D. Patchin (who had the equity of redemption therein) was of unsound mind, was void as against Patchin. The action therefore of Mrs. Patchin, as committee of her husband, to set aside this sale, was, of course, in its effect, to do so to the extent of her interest therein; which was an equity of redemption in said stocks, subject to a lien of the plaintiff on such stocks. This was all the relief which the court could have granted her in an action in which the plaintiff was a party. Mrs. Patchin was then the proper representative, and the legal owner of the title to such stocks subject to plaintiff’s lien, and her acts in relation thereto were binding on the estate, and notice to her, in a matter affecting such estate, was notice with all its consequences to the true owner of the estate. Had judgment been rendered in her favor in her action, she would have recovered the stocks so sold, but such recovery would not in law have released the stocks from the lien of the pledge made of them by her husband, and which followed the debt as it was held, - into the plaintiff’s hands. While this action was so pending, Tifft, the assignee from the said trustees, proposed a compromise of the action by giving to her $30,000 of said stocks, if she would ratify the sale of the whole, which such trustees had made absolute to him, or give her $30,000, the par valué thereof. The trustees being parties to the action, united in the offer of compromise. All of the parties knew of the plaintiff’s interest therein. Mrs. Patchin applied to the court for permission to compromise, and it was granted. The said trustees and TifFt applied to the plaintiff to release his lien upon the said stock. The plaintiff did' release with the reservation to himself of any and every lien, claim or preference which he might or could have by reason of the said sale to him of the said indebtedn rlss-and securities upon, in or to any and every sum of money, property or fund which had or might thereafter come into the hands, possession or custody of Isabella Patchin, committee, etc., of her husband. .

It might perhaps be presumed that Mrs; Patchin knew of the terms of this release. It would be sufficient if she knew that her receipt of $30,000 of this stock in-lieu of the whole, or the same amount in money, was to be on condition, or to be subject to the same lien to the plaintiff as the whole amount would be if she had recovered the whole. The whole stock, and every part of it, was subject-to the plaintiff’s lien until he released it. As to her, or to the estate she owned as committee' he did not release; but, on the contrary, expressly reserved his lien. Her knowledge, then, of the.terms and conditions upon which this stock was received by her, was an important feature in the evidence. This knowledge could be proved in any legal manner. It was not necessary it-should be a part of the record, or be a written acknowledge ment, or be by a written notice. If she knew that the stock or its proceeds, upon which the plaintiff had a legal lien, was not released, she knew that as to him it existed as a lien, and could be followed into whose hands soever it might fall.

■ In this view I can see no error committed by the judge in permitting it to be proved, “ that it was the express understanding between the plaintiff and Mrs. Patchin as such committee that the plaintiff should retain whatever legal claim he had on the stock which was the subject-matter of such action, to the extent to which it should come into her hands by the said settlement authorized by said order in case she Should elect to take stock, or to the proceeds of it in case she should elect to take money in lieu of stock.”

As between plaintiff and Mrs. Patchin, if the settlement, had been made without any understanding between them, he could, by virtue of the lien he held on the stock, have followed it or the proceeds into her hands. She represented the estate of her husband, he had pledged this stock to secure a debt he owed, the plaintiff was the owner of that debt and of that pledge for that purpose. The first pledgee had, without authority, undertaken to dispose of the property pledged. Mrs. Patchin, as the legal representative of the pledgor, claimed that such -disposition was void, and commenced her action to avoid such sale. Terms of compromise were offered between the pledgee and their assignee and Mrs. Patchin. The terms were accepted, the arrangement made and perfected. By all this the plaintiff’s rights were not affected. He relinquished nothing of his rights. The clearest equity protects his interest. It is not even necessary, I think, that Mrs. Patchin should have had knowledge of his rights. At all events, that she did have, and that evidence was given that she expressly agreed to recognize them, is no error against her or the estate she represented.

I think the judgment is right, and should be affirmed.

The court concurred in this conclusion, though a majority did not commit themselves to the proposition that the collaterals taken as security for a debt passed with the debt on a sale of the principal debt.