Joliet Iron & Steel Co. v. Scioto Fire Brick Co.
Illinois Supreme Court
Appeal from the Superior Court of Cook county; the Hon. Joseph E. G-aby, Judge, presiding. This was an action of assumpsit, upon a promissory note for $3953. The defendant set up, in its plea, that the plaintiff, after the commencement of the suit, had sold a number of railroad bonds belonging to the defendant, and by it placed in the hands of the plaintiff, as collateral security to secure the payment of the note sued on, which bonds were of great value, to-wit: of the…
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Appeal from the Superior Court of Cook county; the Hon. Joseph E. G-aby, Judge, presiding. This was an action of assumpsit, upon a promissory note for $3953. The defendant set up, in its plea, that the plaintiff, after the commencement of the suit, had sold a number of railroad bonds belonging to the defendant, and by it placed in the hands of the plaintiff, as collateral security to secure the payment of the note sued on, which bonds were of great value, to-wit: of the value of all the damages sustained by the plaintiff by reason of the non-payment of the note sued on. To this plea the…
1Opinion of the CourtJustice Dickey
The pledge of commercial paper as collateral security for the payment of a debt does not, in the absence of a special power for that purpose, authorize the party to whom such paper is so pledged to sell the securities so pledged, upon default of payment, either at public or private sale. He is bound to hold and collect the same as it becomes due, and apply the net proceeds to the payment of the debt so secured. A person holding property or securities in pledge, occupies the relation of trustee for the owner, and as such, in the absence of special power to do otherwise, is bound to proceed as…
2Cases cited1 opinion
- Wheeler v. . NewbouldNew York Court of Appeals · 1857
3Cited by18 opinions
- Sears v. First Federal Savings & Loan Ass'nAppellate Court of Illinois · 1971
- Peacock v. PhilLipsIllinois Supreme Court · 1910
- Levy v. Chicago National BankIllinois Supreme Court · 1895
- Keeble v. JonesSupreme Court of Alabama · 1914
- First Nat. Bank of Birmingham v. FormanSupreme Court of Alabama · 1935
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