Winchester v. Joslyn

• Decision Date: 02 March 1903
• Parties: WINCHESTER v. JOSLYN.
• Court: Colorado Supreme Court

72 P. 1079

31 Colo. 220

WINCHESTER v. JOSLYN.

Supreme Court of Colorado

March 2, 1903

Appeal from District Court, Teller County.

Action by George A. Joslyn against Josiah Winchester and others. Judgment for plaintiff, and defendant Winchester appeals. Affirmed.

Temple & Crump, for appellant.

Lunt Brooks & Willcox, for appellee.

STEELE J.

Suit was brought by the plaintiff, Joslyn, against the appellant Winchester, and others, upon the following promissory note:

'$2,500. Cripple Creek, Colo., Feb. 17, 1896.

'Thirty days after date, for value received, we jointly and severally promise to pay to the order of Geo. A. Joslyn two thousand five hundred dollars, payable at the First National Bank of Cripple Creek, Colo., with interest at the rate of two per cent. per month from date until paid.

'The Winchester-Howard Investment Co.

'Josiah Winchester, President.

'Josiah Winchester.

'Herbert Warne.'

Credits in the sums of $150, $250, and $10 are indorsed upon the note.

It is alleged in the complaint that at the time of the delivery of the note the defendants delivered to plaintiff, in pledge to secure its payment, certain certificates of stock in certain mining companies, but that, the defendant having failed to pay the interest upon said note and the principal thereof, the said stock was sold at the front door of the First National Bank in Cripple Creek for the sum of $10, and that said amount was credited upon the note. The defendants answered, admitting the execution of the note, and declaring that the said George A. Joslyn caused the said stock to be sold without authority from any of the makers of the note, and that he was the purchaser of said stock at the sale, and that he converted the said stock to his own use, and that the said stock was worth the sum of $3,000. The defendants further answered that the plaintiff failed to perform a certain contract entered into between him and the Winchester-Howard Investment Company, and that, by reason of the plaintiff's failure to comply with the said contract, the defendant company had been damaged in the sum of $8,000. In the reply, the facts set forth in the answer and counterclaim are denied. The court instructed the jury to render a verdict in favor of the plaintiff and against the defendants for the sum of $4,690.67, which was done, and the defendant Winchester has appealed to this court.

But two questions are presented for our determination. The sale, not having been authorized by the pledgee, and it not being a judicial sale, is conceded to be illegal. The appellant contends that the action of the appellee in purchasing the pledged property at the sale was tantamount to the conversion of the stock, and subjects the pledgee to an accounting for its fair market value at the time of the conversion. The rule is not as the appellant asserts. When collateral security is purchased by the pledgee, the pledgor has an election to either ratify or disaffirm the sale. If he ratifies the sale the title to the security becomes absolute; if he disaffirms it, the property remains in the hands of the pledgee as security, subject to the right of the pledgor to redeem by a payment of the debt. When, however, the pledgee, by an unauthorized sale, puts it out of his power to...