Bell v. Mills

• Decision Date: 18 May 1903
• Docket Number: 917.
• Citation: 123 F. 24
• Parties: BELL v. MILLS.
• Court: U.S. Court of Appeals — Ninth Circuit

123 F. 24

BELL v. MILLS.

No. 917.

United States Court of Appeals, Ninth Circuit.

May 18, 1903

T. Z Blakeman and Warren Olney, for plaintiff in error.

John Flournoy, for defendant in error.

In Error to the Circuit Court of the United States for the Northern District of California.

The plaintiff in error, as special administratrix of the estate of her deceased husband, Thomas Bell, brought an action against the defendant in error for damages for the conversation by him of 675 shares of the capital stock of the Bellingham Bay & British Columbia Railroad Company, 3,401 shares of the capital stock of the Black Diamond Coal Mining Company, and 3,435 shares of the Bellingham Bay Improvement Company. The complaint alleged that Thomas Bell, while the owner of said shares, pledged the same, together with a promissory note which he held, for $29,262.18, to the Bank of California, to secure his liability on promissory notes to that bank in the sum of $50,000, with some accrued interest and to secure the further sums of $3,976.69 and $3,859.10 his indebtedness to the bank on certain other shares of stock in other corporations; that Thomas Bell died on October 16 1892; 'that the said the Bank of California on the 20th day of July, 1893, duly presented to the executors of the last will of said Thomas Bell, deceased, its claim against said estate, duly verified, which was allowed and approved by said executors on the 20th day of July, 1893, and by the said court on the 20th day of July, 1893, and was thereafter filed in the matter of the said estate on the 31st day of October, 1899'; that on March 22, 1898, the bank delivered to the said executors its written demand for the payment on or before March 25, 1898, of the portion of said indebtedness which was then unpaid, and at the same time delivered to said executors a written notice of the sale of the said shares of stock so pledged, the sale to be made on April 1, 1898, by public auction; that the bank also caused a notice of said proposed sale to be published daily in a newspaper of general circulation published in said city and county from March 26, 1898, to March 31, 1898, both dates inclusive; that on April 1, 1898, pursuant to said notice, the bank caused all of said shares so pledged to be sold at public auction, and the same were sold on said day to the defendant in error for the sum of $40,071.95; that thereupon the bank delivered on said day to the defendant in error certificates which it held for all of said shares, and the defendant in error delivered and surrendered the same to the respective corporation by which they had been issued, and received from said corporations new certificates in his own name, all of which shares he has converted to his own use'; that the defendant in error knew and had notice of the said demand, notice, and sale, and publication of notice, so made by the bank, and of the contents of each thereof; and that no other demand of payment or notice of sale was ever given or made or published. To this complaint the defendant in error demurred on the ground that it does not state facts sufficient to constitute a cause of action. The demurrer was sustained, and, the plaintiff in error having declined to amend, judgment was entered for the defendant in error.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

GILBERT Circuit Judge, after stating the case as above, .

Did the court err in ruling that the complaint does not state facts sufficient to constitute a case of action? It is conceded that it states no cause of action unless it is shown by the allegations thereof that the sale of the shares of stock to the defendant in error was void. The plaintiff in error contends that there could be no lawful sale of the pledged stock until after the bank's claim against the estate had been proven and allowed by the probate court, and that the complaint shows that the claim had not been allowed by the probate court at the date of the sale, since it alleges that the claim was filed in the matter of said estate on October 31, 1899. It is argued that the claim could not have been approved by that court more than 30 days prior to the date when it was filed, for the reason that section 1497 of the Code of Civil Procedure requires that every claim allowed by the executors and approved by the judge of the superior court must be filed within 30 days thereafter. But we do not so read the complaint. It distinctly alleges that the claim of the bank was allowed by the superior court on July 20, 1893. If it was not filed until October 31, 1899, the default, if any, was that of the executors, and their omission cannot injuriously affect the right of the bank. The mere failure to file the claim after it had been duly approved and allowed by the court could not prevent the executors from redeeming the stock, or from representing the estate in any transaction relating thereto.

It is contended that after the death of the pledgor the bank could only procure the sale of the pledged property by a proceeding in the probate court, since sections 3001 and 3002 of the Civil Code, requiring that a demand be made upon the pledgor 'if he can be found,' and that actual notice of sale be given him, cannot, in the event of his death, be complied with for the reason that he cannot then be found or served. In brief, it is contended that the provisions of those sections of the Civil Code were intended to furnish a remedy only as against a living pledgor. Is this their true construction? It is not disputed that the executors were substituted to the right of the pledgor in the right to redeem the pledged property. We think that if the right and lien of the pledgee survives the death of the pledgor-- and we hold that it does-- it must necessarily follow that the remedy given by the statute in the absence of a substituted statutory remedy also survives. The plaintiff in error produces no authority to sustain her contention, and we discover nothing in the statutes of California which makes the law of that state in regard to pledges different in this respect from the law generally applied to that subject. In Buffalo German Insurance Co. v. Third National Bank (Sup.) 43 N.Y.Supp. 550, it was held that a pledge subject to sale on default may be...