(b) See the cases cited in the preceding note.

(bb) Campbell v. Parker, 9 Bosw. 322

As to the damages, it seems that the debtor may recover, if the stocks had risen in value, that enhanced value. Whether, if the stocks had risen and fallen, the debtor is limited to the value at the time of the unauthorized sale, or may have the highest value down to the time of trial, is not certainly decided; but it seems that he may have the highest value. (c)

(c) All these points were elaborately considered in the case of Wilson v. Little, 1 Sandf. 851; 8. c. 2 Comst 443. It was an action on the case for not returning stock pledged, and for unlawfully selling the same. The case came on originally in the Superior Court of the city of New York, and was tried before Sandford, J. It appeared that on the 20th of December, 1846, the plaintiff borrowed of the defendant the sum of $2,000, and gave his promissory note therefor, payable presently. The plaintiff at the same time transferred to the defendant fifty shares of the consolidated capital stock of the New York and Erie Railroad Company. The transfer was made on the books of the corporation, where it was standing in the plaintiff's name, and was absolute in its terms. In the note, however, given by plaintiff to the defendant, the stock was mentioned as having been deposited with the defendant "as collateral security," with authority to sell the same, on the non-performance of the promise contained in the note, without notice to the plaintiff. Afterwards, and between the 23d of December and the 3d of January, following the date of the loan, the plaintiff's agent applied to the defendant several times to repay the loan, and have the stock retransferred. The defendant did not comply with his request, and it afterwards appeared that he had sold the plaintiff's stock on the 24th or 25th of December. Between the 23d of December and the 3d of January, the market value of the stock in question rose from about sixty-eight dollars per share to eighty-five dollars per share. On these facts a verdict was taken for the plaintiff, subject to the opinion of the court. The court held, 1. That the defendant had no right to sell the stock until he had first demanded payment of the plaintiff. 2. That the measure of damages was the value of the stock on the 3d of January. Upon the first point, Vanderpoel, J., delivering the opinion of the court, said: "The defendant held the stock in question as pledgee. It was pledged to secure the payment of a note of $2,000, payable on demand. A pledgee cannot dispose of the pledge until the pledgor has failed to comply with his engagements. If the pledgee sells the pledge without authority, it is a violation of his trust. It is here contended, that as the note was payable on demand, the plaintiff was in default for not paying it the moment the note was given, and that the pledgee, before selling the stock, was not bound to demand the amount loaned. The cases of sale by the pledgee, to be found in the books, are generally those where notes were payable at a future day, and where the pledgee sold the thing pledged before the notes matured. There the pledgee was clearly in the wrong; for the pledgor had not failed to comply with his engagement. Where stock or other property is pledged as collateral security, to secure the payment of a note payable on demand, can the pledgee proceed to sell immediately, without first demanding the amount of the note? This, in the absence of judicial authority, would, to our minds, be repugnant to the fair import and spirit of the contract." After a careful examination of the authorities, the learned judge continues: "It may then be safely assumed, that where an article is pledged to secure a debt, payable on demand, the pledgee cannot sell without first demanding payment of the debt on demand. A contrary rule would, in its practical operation, be wholly destructive to the existence of a general property in the pawnor. Every vestige of the pawnor's interest in the pledge might be destroyed (and that too without his knowledge) within an hour after the pawnee is clothed with his mere special property." In reference to the measure of damages, the learned judge said: "It is contended that in trover the true measure of damages is the value of the property at the time of its conversion, which, as the defendant contends, was on the 27th of December, when the stock ranged in the market from 67 1/2 to 68 per cent. But the present is not in form, nor indeed is it in substance, an action of trover. It is a special action on the case, and I cannot imagine why assumpsit could not also have been maintained, for not returning to the plaintiff

In this power of disposal, the mortgagee differs greatly from a pledgee. For it is every day's practice for a morthis stock, after tender to the defendant of the amount for which it was pledged. . . . This not being an action of trover, the true measure of damages is the value of the stock on the 3d of January, when the stock was sold for $85 per share. On that day the final interview took place between the defendant and Mr. Cutting, the agent of the plaintiff. The defendant's offer and conversation on that day may be regarded as constituting the final breach. But if it were otherwise, had the breach occurred earlier, the rule of damages would have been the highest value of the stock between the actual refusal of the defendant to return the same, on being offered the amount for which it was pledged, and the commencement of the suit" A question was made also as to whether the plaintiff should have tendered to the defendant the amount due him before bringing his action. The court, however, were of opinion, that the evidence proved that a tender was made, and so this point was not passed upon. The case was afterwards carried up to the Court of Appeals. In that court a question was raised which had not been suggested in the court below, namely, whether the transaction in question did not amount to a mortgage instead of a pledge, on the ground that the legal title to the stock became vested, by the transfer, in the defendant. Upon this part of the case, Ruggles, J., delivering the opinion of the court, said: "It is contended, on the part of the defendant, that the transaction was a mortgage and not a pledge; that the money was payable immediately, and the stock became absolutely the property of the appellant, and was only redeemable in equity. If this be true, the Supreme Court, and the court for the correction of errors must have rendered their judgments in the case of Allen v. Dykers, 3 Hill (N. Y.), 593; s. c. 7 id. 498, upon a mistaken view of the law. In that case, as in the present, there was a loan of money, a promissory note for the payment of the amount, in which it was stated, that the borrower had deposited with the lenders as collateral security, with authority to sell the same on the non-performance of the promise, 260 shares of stock therein mentioned. The money in that case was payable in sixty days - the sale was to be made at the board of brokers, and notice waived if not paid at maturity. The stock was assigned to the lenders of the money, and the transfer entered on the books of the company, on the day the note was given. With respect to the question whether the stock was mortgaged or pledged, I can perceive no difference between that case and the present. The question does not appear, by the report of that case, to have been raised. It would have been a decisive point, for if it had been a mortgage, and not a pledge, the plaintiff must have failed. The sale of the stock in that case by the lender, before the maturity of the note, did not make it the less decisive. If there had been good ground for saying, in Allen v. Dykers, that the stock was mortgaged and not pledged, it is not to be believed that it would have escaped the attention of the eminent counsel who argued the cause, and of both the courts; and on examining the question, I am satisfied, that if the point had been taken, it would have been overruled. The argument of the defendant in this case is founded on the assumption, that when personal things are pledged for the payment of a debt, the general property and the legal title always remain in the pledgor; and that in all cases where the legal title is transferred to the creditor, tlie transaction is a mortgage and not a pledge. This, however, is not invariably true. But it is true that possession must uniformly accompany a pledge. The right of the pledgee cannot otherwise be consummated. And on this ground it has been doubted whether incorporeal things, like debts, money in stocks, etc., which cannot be manually delivered, were the proper subjects of a pledge. It is now held that they are so; and there seems to be no reason why any legal or equitable interest whatever in personal property may not be pledged; provided the interest can be put, by actual delivery or by written transfer, into the hands or within the power of the pledgee, so as to be made available to him for the satisfaction of the debt. Goods at sea may be passed in pledge by a transfer of the muniments of tide, as by a written assignment of the bill of fading. This is equivalent to actual possession, because it is a delivery of the means of obtaining possession. And debts and choses in action are capable, by means of a written assignment, of being conveyed in pledge. The capital stock of a corporate company is not capable of manual delivery. The scrip or certificate may gagee * to sell his mortgage, and by this sale transfer the right of property from himself to the purchaser, subject to be delivered, but that of itself does not carry with it the stockholder's interest in the corporate funds. Nor does it necessarily put that interest under the control of the pledgee. The mode in which the capital stock of a corporation is transferred usually depends on its bylaws. It is so in the case of the New York and Erie Railroad Company. The case does not show what the by-laws of that corporation were. It may be that nothing short of the transfer of the title on the books of the company would have been sufficient to give the defendants the absolute possession of the stock, and to secure them against a transfer to some other person. In such case the transfer of the legal title being necessary to the change of possession, is entirely consistent with the pledge of the goods. Indeed it is in no case inconsistent with it, if it appears by the terms of the contract that the debtor has a legal right to the restoration of the pledge on payment of the debt at any time, although after it falls due, and before the creditor has exercised the power of sale. Reeves v. Capper, 5 Bing. N. C. 136, was a case in which the debtor 'made over' to the creditor,'as his property,' a chronometer, until a debt of £50 should be repaid. It was held to be a valid pledge. In the present case, the note for the repayment of the loan and the transfer of the stock were parts of the same transaction, and are to be construed together. The transfer, if regarded by itself, is absolute, but its object and character are qualified and explained by the contemporaneous paper which declares it to be a deposit of the stock as collateral security for the payment of $2,000, and there is nothing in the instrument to work a forfeiture of the right to redeem or otherwise to defeat it, except by a lawful sale under the power expressed in the paper. The general property which the pledgor is said usually to retain, is nothing more than a legal right to the restoration of the thing pledged, on payment of the debt. Upon a fair construction of the note and the transfer taken together, this right was in the plaintiff, unless it was defeated by the sale which the defendant made of the stock. In every contract of pledge there is a right of redemption on the part of the debtor. But in this case that right was illusory and of no value, if the creditor could instantly, without demand of payment and without notice, sell the thing pledged. We are not required to give the transaction so unreasonable a construction. The borrower agreed that the lender might sell without notice, but not that he might sell without demand of payment, which is a different thing. The lender might have brought his action immediately, for the bringing an action is one way of demanding payment; but selling without notice is not a demand of payment; and it is well settled that where no time is expressly fixed by contract between the parties, for the payment of debt secured by a pledge, the pawnee cannot sell the pledge without a previous demand of payment, although the debt is technically due immediately." As to a tender by the plaintiff to the defendant of the debt due to the latter before bringing the action, the Court of Appeals heldy that the defendant having voluntarily put it out of his power to restore the pledge, a tender of the money borrowed would have been fruitless, and was, therefore, unnecessary. As to the measure of damages the court adhered to the rule adopted by the court below, but based their judgment in this particular upon the special circumstances of the case. Ruggles, J., said: "The ground on which the defendant insists that the damages must be estimated according to the price of the stock on the 24th of December, is, that the plaintiff, on learning that the defendant had sold it, might then have gone into the market, and purchased at the current price on that day. But it is evident that he was prevented from doing so by the repeated promises of the defendant to restore the stock. Although the plaintiff was strictly entitled to a re-transfer of the same shares that were pledged, it appears that his broker was willing to receive other stock of the same description and value, which the defendant promised from day to day to give, the plaintiff being all the time ready to pay the money borrowed. Time having thus been given to the defendant, at his request, for the fulfilment of his obligation, and the plaintiff having waited for the delivery of the stock for the accommodation of the defendant, and having relied on the expectation thus held out, and lost the opportunity of purchasing at a reduced price, it is manifestly just that the plaintiff should recover according to the value of the thing pledged, when the defendant finally failed in his promises to restore it" But the redemption of * the mortgagor. But the pledgee, having only the possession and not the property, cannot transfer the property; and holding only for security, cannot sell until the debt becomes due and is unpaid.