White Mountains Railroad v. Bay State Iron Co.

50 N.H. 57

Opinion

* Smith, J.

The defendants say that the plaintiffs have a plain and adequate remedy at law; being entitled to maintain trover after an improper sale by the pledgees, or after tendering the debt and demanding the pledge.

But the existence of a legal remedy is not necessarily decisive against equitable jurisdiction; and, in the present case, we think a bill in equity may be maintained. However the rule may be in ordinary cases of pledge, there is authority for sustaining a bill to redeem where an account is wanted, or where there has been an assignment of the pledge. Story on Equity, section 1032 ; Hasbrouck v. Vandervoort, 4 Sandford Superior Court 74; Kemp v. Westbrook, 1 Vesey, senior, 278; see, also, Demainbray v. Metcalfe, 2 Vernon 691, 698; Vanderzee v. Willes, 3 Brown’s Chancery Rep. 21; Kent, Chancellor, in Hart v. Ten Eyck, 2 Johnson Chancery 62, p. 100. The case of Brown v. Runals, 14 Wisconsin 693, seems to go further than these authorities, or than the plaintiffs require to go in this case.

The defendants contend that, upon the allegations of the bill, the plaintiffs are not entitled to any relief. This position cannot be sustained. A failure to pay the debt at maturity does not vest the property in the pledge in the pledgee. The pledgee’s possession is not regarded as adverse to the pledgor, and does not bar his right to redeem unless it has continued for so long a time as to raise a presumption that the pledgor has relinquished his title in satisfaction of the debt. If the pledgee does not choose to exercise, in a proper manner, his acknowledged right to sell, he still retains the property as a pledge, and the pledgor’s right to redeem continues. See Story on Bailments, sections 346, 348; Story on Equity, section 1032; 2 Kent’s Com. 581-2 ; Kemp v. Westbrook, 1 Vesey, senior, 278; Comyn’s Digest, title “ Mortgage by Pledge of Goods (B);” Walter v. Smith, 5 B. and Ald. 439; Cortelyou v. Lansing, 2 Caines’ Cases in Error 199. In the present case there has been no sale of the pledged property. The bonds, not the mortgages, were the property pledged. The mortgages were mere-incidents to the bonds secured by them, and a sale of the mortgaged property was not a sale of the bonds.

If the sale was valid, Reed holds whatever he has realized thereby on the same terms as he held the bonds. If the sale was invalid, it may be that Reed must account for whatever he has received under it to the trustees of the mortgages, that they may apply it for the benefit of all parties secured by those mortgages. Upon the receipt of his debt, Reed is bound to restore to the plaintiffs the bonds, and also all the avails of the bonds except such portion as he may be under a paramount liability to account for in some other quarter.

Demurrer overruled.

Bellows, C. J., and Foster, J., did not sit.