Hasbrouck v. Vandervoort

6 Sandf. 74

Opinion

Bv the Court.

Campbell, J.

The bill was filed to redeem stock in a manufacturing company, and for an account of profits of the stock, and the defendant demurs.

It is said that a mortgage passes the title to the mortgagee, subject to be defeated on payment of the mortgage debt. And it is admitted, that in case of forfeiture by non-payment on the day, the mortgagor may come into a court of equity for the purpose of redeeming. But it is -insisted that in case of a pledge, though the possession passes to the pledgee, the title remains in the pledger, and in case of non-payment, the pledger must bring his action at law for the redemption of the article pledged; or rather for its return, or for compensation in damages. Admitting the transaction in this case, according to the ruling in Wilson v. Little, 2 Comstock 443, (S. C. 1 Sand. S. C. R. 351;) was a pledge and not a mortgage of the stock, yet though termed a pledge the legal title passed, and the same reason might exist, therefore, for coming into equity to redeem. In that case, and in that of Allen v. Dykers, 3 Hill 593, which were both actions at law,, the plaintiff did not seek a return of the stock, but compensation in damages. Here the • plaintiff asks for a re-transfer of the stock. In Kemp v. Westbrook, 1 Vesey Sen. 278, Lord Hardwicke says: “ I will not say in general that there is a right to come into equity in every case to redeem pledged goods, yet there are cases where it may be. As the pawnee of stock is not bound to bring a bill of foreclosure of the equity, of redemption of the stock, but may sell it, and notwithstanding the mortgagor may bring a bill here for an account of what is due, and to have a transfer to him.”

It would seem that in case of pledging stock, where the legal title passes, the remedy would be the same as upon mortgages. Indeed-, the distinction seems to be only in name in this respect, though it may be considered as real, as was the case in Wilson v. Little, where the action was for the recovery of damages, and not for a re-transfer.

“ But if any' special ground is shown, as if an account or a discovery is wanted, or there has been an' assignment of the pledge, a bill will lie." (2 Story’s Equity, § 1032.)

Here an account is wanted, and the bill avers that the loan was made of the firm which was composed of the defendants; that the certificate of stock was first given to the defendant Hayward, for the security of the .firm; that the firm was subsequently dissolved, and Hayward transferred the certificate to the other defendant, Yandervoort, who has continued to receive the dividends.

It appears to us to be, therefore, a proper case for a bill in equity, and we think the plaintiff selected the right forum for the determination of the controversy.

The demurrer must be overruled.