Gardinier v. Kellogg

By the Court,

DixoN, C. J.

Tbe action was properly instituted in tbe name of tbe present plaintiff. There was no sale of tbe notes and mortgage to tbe Hoards. Tbe parties *608^ ^ ^en(^ a sa^e> ^he transaction was in tbe nature of pledge, and differed from the ordinary contract only in this, that the pledgees had no right to sell, but, through their attorney, who was likewise the attorney of the pledgor, were to proceed to the collection of the notes, and to apply the proceeds in payment of their debt. All pledges are not necessarily subject to the same incidents or conditions. The contract may be modified by the express stipulation of the parties, and where such stipulations are made, they must govern. In case of the pledge of a chose in action it is competent for them to agree that it shall be collected and the moneys realized appropriated to the satisfaction of the principal demand. And such, we think, was the nature of the agreement in this case. Hubbell, the mutual attorney and agent was to collect the notes and mortgage, and, after deducting the sum due to himself, apply the proceeds to the payment of the draft which he likewise held. This was not a transfer of the ownership of the notes and mortgage to the Hoards. They acquired a special property or lien, which was no doubt available, if not at law certainly in equity; but the general property or legal title remained in the plaintiff. There was to be no discharge or abatement of his liability upon the draft until the money was realized. The notes and mortgage were a mere security, and if, at any time, he had paid the draft, they would have become his absolute property without any further act, which shows that his legal title was never divested. It is not true, therefore, that he has no interest in this action. He is interested in the notes and mortgage as much as ever, for until they are collected, his liability to pay the draft continues. It was doubtless contemplated that the collection would go on in his name, and being the legal owner he may properly be denominated a trustee of an express trust within the meaning of the statute.

The objection that the complaint contains no averment of the trust, and consequently that there was a fatal variance between the pleading and proofs — if such objection would have been good at any time (vide 2 Sandf., 706; 5 id., 483; 2 Seld., 168; and 5 id., 176) — comes too late. No such ground of objection was taken in the court below. The de*609fendant went to trial and rested bis defense upon an endeav- or to sbow that tbe plaintiff bad no sucb interest as enable him to maintain tbe action. Were tbe averment necessary, and bad tbe objection been taken at tbe trial, there can be no doubt that tbe court would have ordered an immediate amendment, or have found tbe fact in accordance with tbe evidence, since it could not have been claimed that tbe defendant was actually misled to bis prejudice by tbe proof of a fact wbicb be bad set up and insisted upon in bis answer. B. S., cbap. 125, secs. 33, 34.

Tbe testimony of tbe witness Hubbell is not obnoxious to tbe charge of hearsay, or of relating to transactions between tbe plaintiff and third parties wbicb could not affect tbe rights of tbe defendant Tbe defendant, in support of bis answer, bad testified to tbe admissions of the plaintiff that be bad sold tbe notes and mortgage to Hoard & Sons. Tbe admissions were but presumptive evidence of tbe facts admitted, and as sucb were liable to be explained and rebutted. Tbe witness was present at the supposed sale, and bis testimony went directly to tbe facts themselves concerning wbicb tbe defendant sought to raise a presumption by force of tbe admissions. It was. clearly competent for tbe plaintiff, by this original evidence, to show tbe real nature of tbe transaction by way of explaining and repelling tbe presumption arising from tbe admissions.

The judgment of tbe circuit court is affirmed, with costs.