The exceptions taken by the defendant's counsel, to the rulings of the judge upon the trial, present for consideration the questions whether the plaintiff was the owner of the draft in suit; and, second, whether the judge erred in holding that the value of the American Transportation company's stock could not be allowed to the defendant as a counter claim in this action. Upon the question of plaintiff's title to the draft in suit, the evidence showed that the draft was owned and held by the Bank of Toledo; that it was sent to the plaintiff's indorser in the usual manner for collection; that the draft was not paid by the acceptor, the defendant, at maturity; that the plaintiff neglected to protest the draft, and to notify the drawer of its non-payment; that, for this neglect, the Bank of Toledo brought an action against the plaintiff, and recovered therein a judgment for the amount of the draft which was paid by the plaintiff; that the plaintiff, upon payment of the judgment, demanded the delivery of the draft to it; that the draft was thereupon delivered to the plaintiff with the assent of the Bank of Toledo. These facts established a title in the plaintiff to the draft. The only inference that can be drawn from the evidence is, that, upon payment of the judgment, the plaintiff claimed the delivery of the draft to it as its property; that the Bank of Toledo recognized this claim, and, in pursuance thereof, delivered the draft to the plaintiff as its property, so indorsed as to confer the title. This gave the plaintiff a complete title, irrespective of the inquiry whether any was acquired by the recovery and payment of *Page 299 the judgment. The question arising upon the counter claim of defendant, founded upon the transportation company's stocks, arises out of the following facts: Prior to the time of the maturity of the draft in suit, the defendant, being owner of the stock in question, delivered the certificate with the usual power of attorney for the transfer thereof to the plaintiff as security for a debt which had been paid at the time of the maturity of the draft in suit at that time, the certificate and power remaining in the hands of the plaintiff; the defendant testified that he made a sight draft upon Grant Co., New York, for the amount of the draft in suit, and delivered the same to the plaintiff, together with his check for the proceeds, for the purpose of paying the draft in suit, and told the plaintiff he would have the stocks as collateral to the sight draft, the witness understanding that the plaintiff would discount the sight draft. The sight draft was protested for non-payment, and defendant duly notified. The defendant, upon learning from the plaintiff that the sight draft had not been discounted, requested the plaintiff to deliver the stock to him, which the plaintiff refused. The case states that the plaintiff gave evidence tending to show that the defendant agreed that the plaintiff might retain the stock as security for the payment of the draft in suit. The case further shows that at this time the stock was worth about four thousand dollars, but that subsequently the company failed and the stock became worthless, and so continued down to the trial. It thus appears that there was a conflict in the evidence, whether the defendant agreed that the plaintiff might hold the stock as collateral to the sight draft, or as security for the payment of the draft in suit. This was a question of fact to be determined by the jury, if material to the rights of the parties in the suit. It was material if its determination either way gave to the defendant a valid claim against the plaintiff, founded upon contract for the loss of the stock, as in that case he would have had the right to avail himself of the demand as a counter claim in the action. (Code, § 250.) Had the jury found that the stock was only pledged to the plaintiff as collateral *Page 300 security for the sight draft, it would have followed that the plaintiff, at the time the defendant requested him to return the certificate to him, had no claim to, or lien upon, the stock, as the bank never discounted the sight draft, or in any way acquired any interest therein, and it would also have followed that the defendant could have maintained an action against the plaintiff, upon its refusal to deliver to him the stock. It is clear, that an action of tort, under these facts, could have been maintained for the conversion of the stock. That would not have availed the plaintiff upon the trial, as, if a tort action only could have been sustained, it was not available as a counter claim. The inquiry is, whether an action upon contract was not also sustainable. Where a party receives property as a pledge, the law implies a promise by the pledgee to restore such property, upon request to the pledger, upon performance of the obligation to secure which the pledge was made, and, for a breach of this implied promise, an action founded thereon may be maintained. It is the case where the law affords two remedies, and in such cases it is well settled that the injured party may elect to pursue either. It follows, that the defendant had the right to avail himself of the counter claim in the action, in case the jury found that the defendant only agreed that the plaintiff might retain the stock as security for the sight draft. He clearly had no such right if he agreed that the plaintiff might retain it as security for the payment of the draft in suit. That had never been paid. The plaintiff, at the time, was the agent of the holder for its collection, and, although not authorized to receive collateral security for its payment, the owner had the right of ratifying such act, and thus make it valid. The plaintiff had the right to retain the security until disaffirmance by the owner. There was no proof of disaffirmance, and, if the defendant agreed that the plaintiff might retain the stock until the draft was paid, he had no right to have it delivered to him, and he had no valid claim against the plaintiff on account of the stock.
The court decided that the counterclaim could not be allowed in the action. I think this ruling must have been *Page 301 understood as rejecting the counter claim upon any view of the evidence, and, as a refusal to submit any question to the jury in regard to it, so understood, it was erroneous. It is true that the evidence, that the defendant pledged the stock as security for the payment of the draft in suit, may have been so conclusive as to justify the judge in directing a verdict for the plaintiff. But the case does not show this. It merely states that the plaintiff gave evidence tending to show such fact. It may have been of much or little weight, for aught that appears. My conclusion is, that the judgment should be reversed, and a new trial ordered.
Judgment reversed. *Page 302