MRS. HELM P. POWELL, Administratrix, v. HOOKERTON TERMINAL COMPANY.
(Filed 15 September, 1920.)
Bills and Notes — Lost Collateral — Trusts and Trustees — Right of Action— Judgments — Rights of Pledgor.
Defendant gave its renewal notes to plaintiff for the purchase of shares of stock in a banking corporation, endorsed by its agent and with the consent of all parties concerned except the plaintiff. The shares were placed in the hands of a trustee to be delivered to the endorser, the defendant’s agent, upon the payment of the note they secured. The shares of stock were misplaced or lost by the trustee, and it was Held, not to be required that the plaintiff produce the shares of stock before her right of action accrued on the past due note, she not being chargeable with, or in default for, the loss of the shares; and a judgment requiring the plaintiff to give sufficient indemnifying bond, both to the defendant and the bank, upon the payment by the defendant of the note and retaining the cause for the plaintiff to take such other steps as she may be advised upon the nonpayment of the note, is a proper one.
Appeal by defendant from Lyon, J., at March Term, 1920, of Edge-combe.
This is an action on a note for $300, given by the defendant to the plaintiff. It is one of three notes, the other two having been paid. All *18were endorsed by Mr. H. 0. Bridgers, and were given for tbe purchase of stock in tbe First National Bank of Tarboro. Stock of said bank was, by agreement between all tbe parties except tbe plaintiff, deposited witb Ed. Pennington to bold as trustee to secure tbe payment of tbe notes, witb a stipulation tbat as and wben tbe serial notes are paid, tbe certificate of stock in tbe bands of Mr. Pennington, as trustee, wbicb secured ,tbe note so paid, should be surrendered by tbe trustee to Mr. H. C. Bridgers, tbe endorser, and who represented, and was acting for, tbe defendant, as agent. Tbe note in suit was originally one of a set of twelve notes secured by tbe same collateral, tbe other eleven having been paid, and tbe certificates held by tbe trustee as collateral having been surrendered according to tbe agreement: ‘The certificate for tbe five shares securing tbe note sued on has been lost or mislaid by tbe trustee, but by no fault of tbe plaintiff, who was not a party to tbe agreement as to depositing tbe certificates witb Mr. Pennington. Defendant now insists tbat tbe plaintiff bad no right of action until she bad tendered tbe certificate for tbe five shares of tbe stock held by Mr. Pennington, as trustee, as collateral to her note, and tbat she is not entitled to recover any costs because of her failure to surrender tbe collateral, or to offer so to do, to tbe defendant. Tbe court required plaintiff to give an indemnifying bond in tbe sum of $900 to defendant, and also one in tbe sum of $2,000 to tbe bank, wbicb was done.
Tbe court held tbat plaintiff is not required to produce tbe certificate for five shares of bank stock, or, if it is lost, to cause another one to be issued before she can recover.
Judgment was thereupon rendered for tbe plaintiff upon tbe note, and for costs, witb this provision inserted therein: “This cause is retained to tbe end tbat if said judgment is not paid, then tbe plaintiff can take such other and further action herein as she may be advised towards selling said stock for tbe payment of tbe said judgment.”
Defendant and Mr. H. C. Bridgers excepted to tbe judgment, and to tbe ruling against them, and appealed.
W. 0. Howard for plaintiff.
John L. Bridgers for defendant.
Walker, J.,
after stating tbe case: There is no rule of law wbicb requires tbe plaintiff, before bringing this action, and upon tbe special facts of tbe case, to produce and deposit tbe stock. If any such action on her part as to tbe deposit of tbe certificate in court, so tbat it could be surrendered wben tbe judgment is paid, was necessary as a condition precedent to her having judgment upon her note, tbe admitted fact that1 tbe certificate bad been lost, and tbat indemnity bonds bad been given, *19as ordered by tbe court, supplied tbe-place of sucb production and tender of tbe original certificate, or a new certificate as a substitute for it. Sbe did not bave tbe possession of tbe stock, under tbe agreement, but Mr. Pennington, as trustee, bad it, and received it at tbe special instance and request of Mr. Bridgers, tbe endorser, and tbe defendant, witb tbe concurrence of tbe bank. Sbe was not trusted witb it, and is not responsible for its keeping and production. It would be a bard measure to impose sucb a duty or obligation upon ber when tbe necessary means and opportunity of producing it was taken from ber by an agreement between tbe other parties. Sbe acquired a benefit by tbe deposit of tbe stock as collateral, but tbis was done under tbe law, and by no provision in tbe agreement. Tbe defendants could not tie ber bands and tben ask that sbe be required to do wbat, by tbeir own action, tbey bave prevented ber from doing. TJnder tbe terms of tbe agreement between defendants, tbey were required to pay tbe note and take it to tbe trustee, Pennington, and demand tbe collateral. If be could not produce it, because be bad lost it, it becomes a matter between bim and tbe other defendants, and Mrs. Pdwell was placed in no default by reason thereof. ¥e think tbis clearly tbe law, and, moreover, is right and just.
Although no authorities were cited to us, we are of tbe opinion that tbe foregoing views are fully sustained by Bateman v. Hopkins, 157 N. C., 470. As said substantially in that case, How can tbe defendants bave been hurt if tbey are fully assured by tbe indemnity bond required that no loss can come to them? There is another principle of that case that applies strongly here, which is, that if defendants’ own laches bave prevented tbe plaintiff from complying witb tbeir present demand, tbe law affords them no relief. It will simply proceed to do justice according to tbe facts, and not give to tbe defendants a relief which has been forfeited by tbeir own conduct in tbe matter. If tbey preferred tbe method of depositing tbe collateral witb Mr. Pennington, and tbe certificate has been lost by bim, tbey must take tbe consequences, as it would be contrary to all our notions of justice to visit upon Mrs. Powell, an innocent party, any part of tbeir misfortune, which tbey solely have brought upon themselves. We do not say that defendants were negligent, but that Mrs. Powell, tbe plaintiff, was not.
If tbe collateral bad been deposited witb tbe plaintiff, tbe question might be different. Why did not tbe defendants bave new stock issued and deposited witb tbe trustee? Tbis is not explained.
There was no error.
Affirmed.