the rights and liabilities of the parties. It supersedes the necessity of a demand, before the sale; and it waives the notice required by law. In legal effect, it enables the pledgee to convert the pledge into money by an immediate sale; and adds new features to the contract, by taking away from it some of the safeguards by which the law protects the interests of the pledgor. But the same contract does not authorize an immediate sale, without demand, where the debt secured is payable on demand, or where the time of payment is indefinite; because here it cannot be supposed that the pledgor intended to authorize a sale before being called upon to fulfill his contract.2

Under a pledge of stocks, by which the owner in express terms sells and assigns them for value received, with the scrip, accompanied by a power of attorney to complete the transfer, the pledgee is practically invested with the title; he is enabled to sell or pledge them as owner, in excess of his actual authority, so that a party making advances on the stocks on the faith of the apparent title, may hold them. Though the sale or second pledge is made by the pledgee in bad faith, it is valid in favor of the party taking the stocks in good faith, for value; on the same principle as like pledges are held valid under the factors' act.3

§ 285. There does not appear to be any reason to prevent a demand of payment from being made at the time the notice of sale is given.* As steps prerequisite to a sale, they are not to be confounded; the object of the demand is to prevent a sale, by rendering it unnecessary; and the object of a notice is to enable the debtor to take proper measures to insure a fair sale; and both must be reasonable in point of time.

An agreement fixing the time the pledgee was to hold the pledge was upheld in Rankin v. McCullough, 12 Barb., 103. In Genet v. Howland, 45 Barb., 560, the Court held the agreement valid. The same doctrine is held in Milliken v. Dehon, where the contract was special; 10 Bosw., 325 S. C., 27 N. Y., 364; and in Taylor v. Ketchum, 35 How. Pr. R., 289; Stevens v. Ball, 6 Mass. R., 339; Mowry v. Wood, 12 Wis., 413; Vose v. Florida R. C., 50 N. Y., 369.

2 Wilson v. Little, 1 Sandf., 351; S. C., 2 N. Y., 443; Garlick v. James, 12 John. R., 146, 149; Ogden v. Lathrop, 3 Jones & S., 73; S. C., 1 Sweeny, 643; S. C., 65 N. Y., 158. In this case effect is given to a clause in the pledge permitting the pledgee to " use, transfer or hypothecate the stock."

3 McNeil v. The Tenth National Bank, 46 N. Y., 325; Jarvis v. Rogers, 13 Mass., 105; 15 Mass., 389; Fatman v. Loback, 1 Duer, 354; see ex parte Swan, 7 C. B. (N. S.), 400; Swan v. The North British A. Co., 7 Hurl. & Nor., 603; 2 Hurl. & Cottman, 175.

Notice of an intention to foreclose was held equivalent to a demand, in Howe v. Bemis, 2 Gray, 203.

Genet v. Howland, 45 Barb., 560. Here the pledge was given for a loan payable on demand, with full authority to sell; held that a reasonable demand was necessary, though no notice was necessary under the agreement. See also Parker v. Brancker, 22 Pick., 40; Washburn v. Pond, 2 Allen (Mass.), 474.

The duty of the pledgee to call upon the pledgor to redeem, and to give him notice of the sale, is the same whether the pledge is delivered at the time the debt is contracted, or afterwards; it is the same whether the pledge is made before or after the debt becomes due.'

§ 286. Personal notice of the sale must be given to the pledgor or left at his residence; and if he cannot be found so as to be served with notice, judicial proceedings must be had, in order to authorize a sale.2 As to what shall be considered a reasonable notice of the sale of goods mortgaged or pledged as a collateral security, there does not seem to be any settled rule. The cases agree that a sale may be had of the goods on a reasonable previous notice of the time and place of sale; and that the object of this notice is to give the pledgor an opportunity to redeem, or to attend the sale for the purpose of seeing that the property is not sacrificed. Judging from the object, it is evident that what would be a reasonable notice in one case, would be entirely inadequate in another. Stocks and bonds may be sold at the Brokers' Board, the market for that species of property, with entire safety on a short notice. When the pledge consists of goods and chattels personal, perhaps the safest rule is to give the same notice which is required to be given of a sale of personal property, seized on execution. The presumption is, that what the law

1 Stearns v. Marsh, 4 Denio, 227; for old rule, see Bac. Abr. Bailment, B. 2 Garlick v. James, 12 John. R., 146; 2 Story's Eq., § 1008; Stearns v. Marsh, 4 Denio, 227; Strong v. National B. Asso., 45 N. Y., 718; Bryan v. Baldwin, 7 Lansing, 174.

3 The following cases hold that the notice of the sale of a pledge, must specify the time and place: Lewis v. Graham, 4 Abbott's Pr. R., 106; Castelo v. City Bank, 1 N. Y., Leg. Obs., 25; Wheeler v. Newhold, 5 Duer 29; 16 N. Y., 392; Taylor v. Ketchum, 5 Robt., 507; Brass v. Worth, 40 Barb., 648; Strong v. National M. B. Ass., 45 N. Y., 718, 720; Markham v. Jaudon, 49 Barb., 462 ; S. C., 41 N. Y., 235; Brown v. Ward, 3 Duer, 660. The notice may be waived by agreement; see Milliken v. Dehon, 10 Bosw., 325; S. C., 27 N. Y., 364; Stevens v. Hurlbut Bank, 31 Conn., 146; Hyatt v. Argenti, 3 Cal., 151; Davis v. Funk, 39 Pa. St., 243; Conynham's Appeal, 57 Pa. St., 474; Marvin J. calls the rule in question; 27 N. Y., 364; and these cases hold that an express power in a chattel mortgage to sell at private sale, may be executed without notice. Chamberlain v. Martin, 43 Barb., 607; Haskins v. Patterson, 1 Edm. R., 120; Huggars v. Fryer, 1 Lansing, 276; the agreement controls; Vose v. Florida R. Co., 50 N. Y., 369.

A sale of stocks at the Brokers' Board on two days' notice, not objected to, was held valid in Willoughby v. Comstock, 3 Hill, 389; and valid though objected to, in Bryan v. Baldwin, 7 Lansing, 174; in another case a notice given on the 13th of November for a sale on the 20th was considered reasonable; Md. Fire Ins. Co. v. Dalrymple, 25 Md., 242; in another case it appears that the parties agreed on a sale of bonds at the Brokers' Board, on a notice of five days, doubtless deeming that a reasonable notice; Vose v. Florida Railroad Co., 50 N. Y., 369, 373.

holds a reasonable notice in respect to similar goods, would be held sufficient to protect the mortgagee or pledgee of goods. As courts of equity watch such proceedings with vigilance, it is necessary that the manner of sale should be perfectly open and public, and free from all unfairness. There must be six days' notice given of the sale of goods and chattels on execution, describing briefly the property, and specifying the time and place of sale. At the time and place specified, the goods to be sold must be present, subject to the inspection and examination of the bidders. Unless the property is so present, the sale will be invalid.2 The officer must also point out the property specifically, and sell it in parcels. His proper course is to sell only so much of the property, which can be conveniently and reasonably sold separately, as will satisfy the execution.1

§. 287. Legislation on the subject, may aid us to determine what is a reasonable notice; it certainly throws some light on the question. It affirms the necessity of a notice, and so far as we have any examples, it indicates an opinion in favor of a notice sufficiently long, to furnish every opportunity to redeem the property, or at all events to protect it from being sacrificed on the sale 5

13 R. S. of New York, 645, 648, 5th ed. ; 2 Kent's Comm., 583.

2 Cresson v. Stout, 17 John. R., 116; unless the property is of a peculiar nature-stereotype plates; Bruce v. Westervelt, 2 E. D. Smith, 440.

3 Sheldon v. Soper, 14 John. R., 352; Breese v. Bange, 2 E. D. Smith, 474. * Hewson v. Dygert, 8 John. R., 333, 335; the nature of the property and its situation will generally indicate in what parcels it should be offered for sale; and the defendant's consent may justify a sale in large parcels; Stephens v. Baird, 9 Cow., 274; plaintiff's consent will not be inferred from the silence of his agent sent to bid on the sale; Wyman v. Hart, 12 How. Pr., 122. It is proper to sell in mass, property covered by a chattel mortgage; 4 Denio, 171. 5 FORECLOSURE OF PLEDGES.

The statute in Massachusetts provides a way in which chattel mortgages and pledges may be foreclosed. Gen. Statutes of 1860, pp. 766, 767, § 9: “The holder of personal property in pledge for the payment of money or the performance of any other thing, may after failure to pay or perform, give written notice to the pledgor that he intends to enforce payment or performance by a sale of the pledge, and such notice shall be served, and together with an affidavit of service be recorded in the clerk's office of the city or town where the pledgee resides," three weeks before the sale. The notice of sale must be reasonable. Brackett v. Bullard, 12 Met., 303. The notice may be given immediately, where a chattel mortgage is given to secure the payment of a note due on demand. Southwick v. Hapgood, 10 Cush., 119. Notice of an intention to foreclose is tantamount to a demand of the amount due. Howe v. Bemis, 2 Gray, 203.

§ 10. "If the money to be paid or other thing to be done, is not paid or performed, or tender thereof made within sisty days after such notice is so recorded, the pledgee may sell the pledge at public auction and apply the pro

§ 288. The pledgee's right to sell may be modified, enlarged or restricted, by the circumstances and purpose of the pledge. A pledge of stocks, as we have seen, puts the property within the power of the pledgee; and a pledge of goods in the hands of a carrier, by a delivery of his receipt or the bill of lading as a collateral security for the acceptance of a draft drawn on the consignee, on a discount of the draft, transfers the title to the property. It vests the title in the party discounting the draft, in trust to transfer it to the drawee on his accepting the draft, or on his refusal, to sell the goods and pay the draft. The transaction is more like a mortgage than a pledge, because it is held to transfer the title; it is like an assignment; it enables the assignee to dispose of the goods and apply the proceeds towards the payment of the draft.'

A draft in the usual form, drawn against a consignment of goods, does not give the payee or holder any lien on the goods, or upon their proceeds. But such a draft, with a letter of advice to the consignce that the same is to be paid out of the proceeds of the sale, appropriates

ceeds to the satisfaction of the debt or demand, and the expenses of the notice and sale, and any surplus shall be paid to the party entitled thereto, on demand."

11. "The preceding sections shall not authorize the pledgee to dispose of the pledge contrary to the terms of the contract under which it is held, nor limit his right to dispose of it in any other manner allowed by the contract or the rules of law."

The holder of any collateral security for the payment of a debt, is liable to be punished by fine or imprisonment for any sale, pledge or disposition of the same without authority, before the debt secured becomes due. Gen. Statutes, 803, § 64.

"In transfers of stocks as collateral security, the debt or duty which such transfer is intended to secure shall be substantially described in the deed or instrument of transfer. A certificate of stock issued to a pledgee or holder of such collateral security shall express on the face of it that the same is so holden: and the name of the pledgor shall be stated therein, who alone shall be responsible as a stockholder." A creditor of the shareholder has a right to examine the record of such transfer. Gen. Statutes, p. 385, §§ 13, 14, New Hamp shire. The statute gives and defines various liens, and provides a mode of foreclosing them; it allows the lienholder by way of pledge, to sell the property at auction, on three weeks' notice of the time and place of sale. The notice with affidavit of service and an account of the sale are to be recorded in the town clerk's office. Gen. Statutes (1867), 260.

Bank of Rochester v. Jones, 4 Denio, 489; S. C., 497; Allen v. Williams, 12 Pick., 297; The City Bank v. The R. W. & O. R. R. Co., 44 N. Y., 133; Cayuga Co. Nat. Bank v. Daniels, 47 N. Y., 631; The Marine Bank of Chicago v. Wright, 43 N. Y., 1. A pledge of stocks with power to hypothecate the same, and afterward return like stock, is valid; Ogden v. Lathrop, C5 N. Y., 158.

Cowperthwaite v. Sheffield, 1 Sandf., 416, 449; S. C., 3 N. Y., 243, 251; Winter v. Drury, 5 N. Y., 525; Chapman v. White, 6 N. Y., 412.

the goods to that purpose; and if the consignee accepts the consignment and promises to honor the draft, he must hold the fund subject to that order. So where an order is drawn on the custodian of a fund, directing that it be paid to a party named for value, or where the drawer is indebted to the payee, the order being assented to by the drawee, is equivalent to an equitable assignment of the moneys; it is an appropriation of the fund to the payment of the draft. It binds the party on whom it is drawn.

§ 289. Where the title to goods is transferred as a security for a draft or for advances, the transferee has the power to dispose of the property, without going through any process of foreclosure. He holds the goods like an assignee, in trust; the transfer is in legal effect a chattel mortgage; it leaves a residuary interest in the mortgagee, which may be reached by his creditors; and it enables him to deal with the property as owner. A defeasance accompanying the transfer renders it a mortgage; to be foreclosed as such, in the discretion of the mortgagee — essential in order to vest in him an absolute property, discharged from the equity of redemption."

§ 290. A commission merchant or factor who receives goods for sale, and pays charges or makes advances upon them, acquires a lien upon the property; a particular lien upon the goods for charges and advances made upon them, and also a general lien for the balance of his account arising in the course of dealings between him and his principal. Acting

as a factor he has the right to sell in his own name as apparent owner, without disclosing the name of his principal. His authority to sell is either express or implied; having made advances on the goods, and be

1 Lowery v. Steward, 3 Bosw., 505; S. C., 25 N. Y., 239.

2 Parker v. City of Syracuse, 31 N. Y., 376; Shuttleworth v. Bruce, 7 Robt., 160; EDWARDS on Bills and Notes, 379, 421-424.

3 These cases relate to choses in action: Eno v. Crooke, 10 N. Y., 60; Smith v. Miller, 25 N. Y., 619; Breese v. Bange, 2 E. D. Smith, 474; see Peck v. Morrell, 26 Vt., 686; 10 Bosw., 332; Sherman v. Elder, 24 N. Y., 381.

◆ Thompson v. Blanchard, 4 N. Y., 303; the chattel mortgage is void as against third parties, unless filed; but valid as between the parties; Marsh v. Lawrence, 4 Cowen, 461; Brown v. Bement, 8 John., 96; Ackley v. Finch, 7 Cowen, 290.

* Smith v. Beattie, 31 N. Y., 542; Leitch v. Hollister, 4 N. Y., 211.

Langdon v. Buel, 9 Wend., 80; Hall v. Tuttle, 8 Wend., 375, 392. For the distinction between a mortgage and a pledge, see ante, § § 178, 186, 246-248. 'Hoyt v. Martense, 16 N. Y., 231.

* EDWARDS on Factors and Brokers, § § 71–78.

9 Barring v. Corrie, 2 Barn. & Ald., 137, 143; Brice v. Brooks, 26 Wend., 367; Higgins v. Moore, 34 N. Y., 417.