Court Opinion

ID: 8071839
Source: CourtListenerOpinion
Date Created: 2022-09-09 11:33:30.894307+00
Date Added: 2024-06-11T16:38:15.044087
License: Public Domain

HOUGHTON, J.
(dissenting). I think the judgment should be modified, rather than reversed. There is no evidence to contradict the fact that Frank S. McGraw was the real owner of the 1,150 shares of stock of the Adirondack Timber & Mineral Company, represented by certificate No. 23. By his assignment of this stock to the plaintiff to secure the notes of Thomas H. McGraw and Patton & Co., he submit*391ted it, and the dividends accruing on it, to the payment of those notes. I cannot see that he committed a fraud on Patton & Co. by not informing them that he, instead of Thomas H., was the owner of the stock. Nor do I think that he is now estopped, as against them, from claiming ownership thereof. So far as he was concerned, Thomas H. and Patton & Co. were joint and several debtors, and he pledged his stock upon the condition and for the purposes specified in the security agreement signed by them. When the notes had been paid, Frank S. was entitled to the return of such of his stock as was unnecessary to satisfy the pledge. The most, it seems to me, that can be done, is to modify the judgment by reversing that part of it which directs return to him of the dividends on the stock which have been applied to payment of the notes. I doubt if he is entitled to any superior equities, as against Patton & Co., which justify a return to him of any part of his collateral which has actually been applied in payment of the indebtedness. If Patton & Co. had known all the facts, possibly their unused collateral could be appropriated towards full reimbursement of Frank S.; but, even without knowledge, they are not entitled to an appropriation of his stock to satisfy any equities they may have against Thomas H. The stock was never pledged for any such purpose.
I dissent from a reversal, and vote for the modification indicated.