Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-08-12
SUPREME COURT.
FU1L TEXT OF DECISION FILED.


Church in Worthngton, Mian., Respondent.
OPINION.
The defendant is a religious corporation in
corporated under title 4. chap. "a gen. statutes
BY its trustees 1t execut+ several promssory
notes, dated July lst, 1873 but not delivered
till Feb, 1873, payable to the order of A.
p. Miller at different times for different sums.
They were executed to secure the purchase
money of rea estate sold the corporation. In
Feb, 1875, Miller pledged i've of these notes TO
one Bartlett to secure debt which he owed to
Bartlett, and endorsed in blank and delivered
them to Bartlett.
These notes fell due at various dates between
July LIST. 1876, and July LIST, 1878, and the
principals thereof amounted To 81, 75u. S1pse-
quent to the contract of pledging Miller for a
part of the debt he owed, Bartlett executed to
him y promissory note for 81 $50. and 1t VAS
then agreed be ween them that if such note WAS
| not paid at maturity Bartlett might make the
| money out of the pledged notes in the bes.
| way he could and that he might sell the same
for that purpose. This note to Bartlett tell
due In August, 1873, and not paid, and
Bartlett thereupon notified Miller by letter
that eif it not paid within ten days he
would make the best disposition he could of
| the pledged notes to raise the money either
| bv public private sales. In January. 1876,
\ Miller assigned the pledged notes to plaintiff.
| At an informal meeting AT which were present
| Il ma jority of the defendants it being under
| stood that the pledged notes could be bought
from Bartlett for about Sl.700, 1t agreed
that the notes should be bonght and the funds
which defendant had on hand used in paying
| for them so far as such funds would go, one of
the trustees agreeing to advance the remainder.
| In December. 1915 this trustee concluded with
an agent of Bartlett, in whose hands the notes
were for sale, contract for the purchase of
them at about Sl,70O, there being
then due on the notes about
| $4,000, and the consid, ration for such pur-
chase paid at different times, partly with
the funds of the corporation and partly with
money furnished by three of the defendants
trustees Upon the point whether the trustee
| or trustees purchased individually the finding
OF the court below Is rather indefinite and
fuse 1t is that in making the purchase the
| three trustees who advanced the money in X
cess of the funds of the corporation used Tor
| the purpose were personally interested. and as
sumed and intended to act us individuals, and
not us trustees of the church, and then pro-
ceeds: The evidence upon this point of the
case does not sufficiently disclose
the whole transaction enable
Lhe court TO find distinctly and
satisfactorily the entire facts am led, how
ever, to the conclusion, and find matter of
fact, that although Safer Sutton and Blgeiow
the purchasing trustees made the purchase
| individuals, there having been, perhaps.
, egally delegated authority To represent the
church as Il corporation, yet they made such
purchase with the intent and understanding
that it should enure to the benefit of the de-
fendent, whose funds they used for such pur-
pose, ana that the purchase was really made
I account Of and i'll behalf of, the defendant,
and that 1T was subsequently understood by the
. trustees OF the defendant To have been so done,
+ they having acqulesced in, and thereby ratified
suct, appropriation OF trust funds. We inter
from this finding that the three trustees
supposed they had. authority to make
the purchase for the corporation and They
G made it assuming to act under that supposed
authority, and this act being ratified by the
corpofation, it must stand as the act Of the
corporation. AT the time of the purchase the
| three trustees knew that notes held by
BARTLETT as collateral security merely, no notice
e of the time and plce of sale, nor OF his lnten-
ton TO SELL except by the letter we have refer
G red to, was ever given by bartlett.
II The first question in the case Is, had Bartlett
the right to sell at private sale, and without
any notice to Miller of the time and place of
I the sale?
d The pledge of personal property TO
Y debt generally rests in the Pledge the power
4 to make the money by sale OF the property
q | without decree of court. 1t ha- been affirmed
that this power to sell does not attach to pledge
OF negotiable paper. Wheeler vs.. Newbould,
l6, N. y, 1872. 1t is not necessary To decide
: the point IN this case, for by the agreement be-
. tween the pledgor and Pledge the latter was
II authorized to make the money out of the notes
e pledged in the best way he could and sell the
n same for that purpose. 50 that SO Tar US the
Il power to sell concerned, the pledge was
, | put upon the same footing as though the law
= had, in case of pledge of other property
s attached such power to sell. IL case of debt
pledged the pledge may receive payment of
the debt, and may for and collect it. White
VS.. Phel ps ante to receive payment. to sue for
and collect, and to sell, are the only ways in
F" which the money can be made
out of pledged negotiable paper,
and the agreement between the
Il plcdgor and Pledge in this instance authorized
the pIedgee to resort to either of them, and he
II resorted to the latter. 1t competent for
1t the parties 10 agree how the sale should be
If made, but without any such agreement and
where the power to sell is merely given the
L power will be construed to be such power
v exists in respect to pledges generally and must
II be exercised in the same way. In respect to
i' pledges generally the power can be exercised
In only upon reasonable notice to the debtor tn
10 redeem and of the time and place of sale.
Wheeler VS.. Newboud(ante)
sc White VS.. Phelps(ante.
a. Stearns Marsh, DEMO. 227.
of Lortalyou VS.. Lansing. Comescas, 200.
i This notice is essential to secure fairness in
: the transaction, and to enable the pedgor to
. protect his interests.
ls The notice in this only OF an inten-
IN ton to sell without specifying time or place,
and was similar to that in Wheeler VS.. Neu-
e. bold, concerning which the court SAID If the
IN creditor does more than give the notice of
;, his intention to sell without saying when or
=. where or in what manner, he deprives the
q, a' debtor Of substantial right which tho notice
IL is designed to secure" 1t was insufficient and
ID did not Justify the sale. The court below Of
IL that opinion, but held that the notes having
e. been endorsed in blank by the payee. Miller,
81 the purchasers from Bartlett whether the trus-
he tees or the corporation came within the pro-
~ lection accorded boaa tide endolsers OF nego-
> table paper This would be were 1t not Tor
the fact that the purchasing trustees at the time
he of the purchase knew that Bartlett held the
e notes as pledge to the debt from
or Miller, knew in effect that his interest md
m rights and power over the notes were not those
. of an ordinary endorsee in the usual course of
in busin SIS, but those Of Pledge, and that his
= power to sell depended his having given the
d proper notice. Il wing this notice the blank
10 endorsement cannot protect them IN purchas-
RS ing at a sale which the holder of the notes had
no no right to make; notwithstanding such sale the
ai notes still the property of the plaintiff.
n The order denying trial is reversed and
,,o a new trial ordered. GILLFILLAN, G. J.
ia ttvS