Opinion ID: 1474119
Heading Depth: 1
Heading Rank: 4

Heading: The Delivery of the Stock to Phillips.

Text: Even if we assume the terms of the note created a pledge and that the provision in the contract for the delivery of the stock to Phillips was invalid, there is no legal impediment to a pledgor agreeing to transfer the pledged property to the pledgee in satisfaction of a debt secured by the pledge. [12] By the joint letter of Brown and Phillips to the Bank dated August 26, 1935, the Bank was instructed to turn the stock over to Phillips. Pursuant to that letter, the stock was delivered to Phillips and Brown's note was canceled and returned to him. The trial court found that Brown and Phillips by that transaction intended to terminate the contract of August 27, 1930, and vest title to the stock in Phillips. The evidence abundantly supports that conclusion. At that time the market value of the stock was much less than the $365,000 advanced by Phillips, plus accrued interest thereon. The transaction was fair, free from fraud, and was carried out in good faith.