Hibernia Bank & Trust Co. v. Turner
| Decision Date | 31 March 1930 |
| Docket Number | 28480 |
| Parties | Hibernia Bank & Trust Co. v. Turner Et Ux. |
| Court | Mississippi Supreme Court |
1 PLEDGES. Diamond ring. Bailee for hire.
Pledgee of diamond ring as security for debt became bailee of ring for hire.
2 PLEDGES. Use of property. Impairment of value.
Pledgee of property as security cannot deal with property so as to destroy or even impair its value.
3 PLEDGES. Loss of pledge. Negligence. Liability.
Pledgee of property as security is liable for ordinary negligence resulting in loss of pledge.
4 PLEDGES. Care of pledge. Elements of diligence.
Diligence required of pledgee in care of pledge depends on character of thing pledged and surrounding circumstances as well as means of protection.
5. PLEDGES. Care of pledge. Ordinary care.
Pledgee of property as security must exercise care which ordinarily prudent man bestows on his own property of like nature and under like circumstances.
6. PLEDGES. Care of pledge. Surrounding circumstances. Consideration.
In determining responsibility of pledgee, all surrounding facts and circumstances of particular case must be considered.
7. PLEDGES. Assignment. Duty of assignee.
Assignee of pledge as security for principal debt is charged with same duty respecting pledge and entitled to same benefits as assignor.
8. PLEDGES. Assignment. Possession of pledge.
Possession of pledge by assignor is in nature of trust for benefit of assignee of debt.
9. PLEDGES. Loss of pledge. Assignee. Care. Evidence. Sufficiency.
Evidence sustained finding that ring pledged as security for note was lost because of failure of assignee of pledge to exercise ordinary care. The evidence disclosed that the ring was pledged with bank as security for note and retained in a safe therein, with the pledgor retaining such possession after assignment of note, and that the ring was subsequently stolen from the safe by person with knowledge of combination thereof.
10. APPEAL AND ERROR..Review. Chancellor's finding. Weight of evidence.
Chancellor's decree will not be overturned, unless finding is against overwhelming weight of evidence.
HON. R. E. JACKSON, Chancellor.
Suit by the Hibernia Bank & Trust Company against T. M. Turner and wife, wherein defendants filed a crossbill. From the decree, complainant appeals. Affirmed.
Shands, Elmore & Causey, of Cleveland, for appellant.
The contract of pledge being that of a compensated bailment, the pledgee's duties and liabilities are those of ordinary bailees for hire.
21 R. C. L. 664; Petty v. Overall & Maulton, 94 Am. Dec. 634; Jones on Collateral Securities, Pledge (3 Ed.), secs. 1 and 2.
A pledgee is bound to use ordinary care in relation to the property pledged, and consequently is liable for ordinary negligence, resulting in depreciation or loss in value. A pledgee is bound to exercise the degree of care which an ordinary prudent man usually bestows upon his own property of like nature under like circumstances.
In case the pledge is stolen from the pledgee the mere fact of the theft establishes neither responsibility nor irresponsibility on his part. It is like any other loss. If theft is occasioned by any negligence, the pledgee is responsible therefor if he is guilty thereof; if without negligence on his part, he is discharged from liability.
21 R. C. L., p. 664; 6 C. J., p. 1121; Sec. 61, 2(a); Jones on Collateral Securities, Pledges (3 Ed.), secs. 403 and 412; Trotter v. McCall, 26 Miss. 410; Netherly v. Belden, 66 Miss. 490; Oktibbeha County Cotton Warehouse Company v. J. C. Page & Company, 151 Miss. 295; Y. & M. V. R. R. Co. v. Hughes, 94 Miss. 242; Knight v. Piella, 69 N.W. 92; Firemans Fund Insurance Company v. Schrieber, 1913E, Ann. Cases, page 823; Firestone Tire & Rubber Company v. Pacific Transfer Co., 26 L. R. A. 217; Williamson v. Pillipoff, 64 So. 269.
The bailee is not liable for the value of the subject matter of the bailment when it is stolen through no negligence on his part.
6 C. J. 1123, sec. 61 (2); Jones on Collateral Securities, Pledges (3 Ed.), sec. 409; 26 A. L. R., pp. 223 and 224; Batesville Gin Co. v. Whitten, 96 Miss. 210; Oktibbeha County Cotton Warehouse Co. v. J. C. Page, 151 Miss. 295; Meridian Fair Exposition Co. v. N. Birmingham Ry. Co., 12 So. 555.
The burden of proof was not on the bailee to show that he was not guilty of negligence in the loss of the ring.
Meridian Fair & Exposition Ass'n v. 'North Birmingham St. Ry. Co. (Miss.), 12 So. 555, 70 Miss. 808; Y. & M. V. R. R. Co. v. Hughes, 94 Miss. 242; 70 Miss. 808, 12 So. 555; Higman v. Camody, 118 Ala. 267, 20 So.
482, 57 Am. St. Rep. 33; Clafin v. Meyer, 75 N.Y. 260, 31 Am. Rep. 467; Wilson v. So. Pac. R. Co., 62 Cal. 164; Batesville Gin Company v. Whitten, 96 Miss, 210; Jones on Collateral, sec. 3, Pledges, sec. 413; Trotter v. McCall, 26 Miss. 410; Beech v. Wilkins Ricks Co., 9 A. L. R. 554; Wall v. Schuer, 140 Tenn. 245, 204 S.W. 632; Firestone Tire & Rubber Co. v. Pacific Transfer Co., 26 A. L. R. 217.
The diamond ring had no market value, and the finding as to the specific value is arbitrary and unsupported by the law and evidence.
Parish & Co. v. Y. & M. V. R. R. Co., 103 Miss. 288; 38 C. J., sec. 17, p. 1262; Steaker v. Reese, 97 S.E. 641; Pittsburg & St. L. Ry. Co. v. Gage, 121 N.E. 582; Encyclopedia of Evidence, p. 429; 8 R. C. L., secs. 48 and 49, pp. 487, 488 and 489. Cutrer & Smith, of Clarksdale, and Louis C. Hallam, of Jackson, for appellees.
The pledgee's character is that of a trustee for the pledgor---first, to pay the debt, and, second, to pay over the surplus to the pledgor---and he cannot deal with the property so as to destroy, or even impair, its value.
Boswell v. Thigpen, 75 Miss. 308, 317; Eckert v. Searcy, 114 Miss. 150, 160.
The contract of pledge being that of a compensated bailment, the pledgee's duties and liabilities are those of ordinary bailees for hire. He is bound to use ordinary care in the relation to the property pledged, and consequently is liable for ordinary negligence, resulting in depreciation or loss in value. A pledgee is bound to exercise the degree of care, which an ordinarily prudent man usually bestows upon his own property of like nature under like circumstances. The care required of a pledgee is that of a prudent administrator; he is not subjected to the requisition of the most exact diligence. In case the pledge is stolen from the pledgee the mere fact of the theft establishes neither responsibility nor irresponsibility on his part. It is like any other loss. If the theft is occasioned by any negligence, the pledgee is responsible therefor if he is guilty thereof; if without negligence on his part, he is discharged from liability.
Where the principal debt is sold and the collateral is transferred with it, the purchaser takes the debt and collateral on the same footing on which it was taken by the original creditor, being charged with the same duties respecting it and entitled to the same benefits therein.
And this is true even though the assignor retains possession of the collateral, such possession being in the nature of a trust for the benefit of the assignee of the debt.
21 R. C. L., p. 673; 32 Am. St. Rep. 718; Third National Bank of Baltimore v. Boyd, 22 Am. Rep. 35.
What constitutes ordinary care is materially dependent on the nature and value of the thing bailed, the convenience of it being made secure, and its liability to loss, theft or injury.
3 R. C. L., p. 98; Story on Bailments, secs. 15, 186.
If the decree rendered in this case can be justified from the record, it must be done. It will be presumed, the contrary not appearing, that the chancellor found the facts correctly, and applied the controlling principles of law.
Neal v. Newburger, 154 Miss. 691, 123 So. 861; Green v. Pearson, 145 Miss. 23, 28, 110 So. 862; Davis v. Richardson, 45 Miss. 499, 510; Crump v. Tucker, 149 Miss. 711, 716, 115 So. 397; St. L. &F. R. R. Co. v. Bowles, 107 Miss. 97, 64 So. 968.
Argued orally by G. D. Shands, for appellant, and by E. A. Smith, for appellees.
Appellant, a banking corporation under the laws of the state of Louisiana, filed the bill in this case against T. M. Turner and his wife, Katherine M. Turner, in the second judicial district of Bolivar county, to recover from the appellee an indebtedness of one thousand six hundred twenty dollars and interest, and ten per cent attorney's fee, evidenced by appellees' promissory note owned by appellant, and to assert and establish a lien upon a diamond ring, which appellees had pledged as collateral for the payment of the note, and to have the ring sold to satisfy the indebtedness found to be due. A trial was had on original bill, appellees' answer and cross-bill, and appellant's answer to the cross-bill, and proofs, resulting in a decree in favor of appellant against appellees for the amount of the indebtedness, with interest and attorney's fees; and against appellant, in favor of appellees, for the value of the diamond ring which had been pledged by appellees to secure the payment of the note; and fixing the value of the ring, which was more than the indebtedness; and giving appellees a decree over against appellant for the difference. From that decree appellant prosecutes this appeal.
The ring pledged to secure the indebtedness was stolen between the time of the filing of the original bill in this cause and appellee's answer and cross-bill. The main question in the case was whether the loss of the value of the diamond ring should fall upon appellant or upon appellees. The court held that it should fall upon appellant. The question turns upon whether or not the ring was lost through the negligence of appellant.
...
To continue reading
Request your trial