ooure, S. D. :New Y(JII'k.
PLEDGE - PRIORITY OF LIEN - EQUITABLE INTEREST -A TTAOHMENT REPORT. '
Former opinion in this case (13 FED, REP. 423) expla.lned,and master's report r:ecommitted for correction.
InEquity. Exceptions to master's report. EdgM A. Hutchins, for Dumont. , Man 0: Peirsons, for Laborde & Reymes. Platt 0: Bowers, for Fry. Scott 0:, Crowell, for Louisiana National Bank. Chas. E. Whitehead, for Casey. WALLACE, J.. Although the language used in the opinion in this case (13 FED. REP. 423, 4:27) may jus,tify the construction which the master placed upon it, that the bonds to the extent of $100,000 were pledged ,as security for the debt of the banking association, or that $100,000 of the bonds were thus pledged, it was not intended to decide that this was the exact intent of the pledge. The terms of the pledge were that the bonds then in the possession of the Schuchardts should be held by them as security for any advan'ce or overdraft which might ultimately exist in the dealings of the parties to the extent of $100,000. In effect, the pledge is as though it were to secure $100,000 whenever that amount might be found to. be owing. The pledge, therefore, carries interest as an incident to the debt. This was olearly determined by the interlocutory decree which charges the bonds with a lien to the amount of $100,000, "and interest from the date of the balance of account." It does not affect the question that the bonds were pledged without the consent of the owners, or that the pledgeor was surety instead of principal debtor. The contract is not enlarged as against a surety, because it is implied in all contracts of pledge to secure a debt that interest must be paid on the debt to redeem the pledge if the debt is not paid when it matures. 2. Contrary to my first impression, the money collected by Fry is to be treated as merely a substitute for the bonds. He had no right to apply it to extinguishment of the debt, and, as he did not do so, is chargeable only with what it earned, which is the interest he has received on it. 3. The money collected by the Schuchardts before their bankruptcy seems to have been used by them, and mingled indiscriminately with their own funds. This is therefore to be treated as a payment upon the debt at the time it was received. 4. Fry was not a trustee for anybody but the bankrupt estate in collecting the interest on the bonds, and is not entitled to any commissions, or to a counsel fee for maintaining his lien.
5. He is not liable for permitting the ooupons to become outlawed, if that has happened. He has not omitted to perform any aot required of him by the parties who ownec;l the bonds. It was for them to, pay the pledge, or takeoare of their own securities. 6. Interest on the sum seoured by the pledge is to be computed at 7 per cent. until 6 per oent. became the legal tate by the law of this state; thereafter at 6 per cent., , ,', ' The report is recommitted to the master correction according to the foregoing suggestions. No oosts are allowed to either party as against the other upon the exceptions. If any questions raised by the exoeptions have been overlooked, they may be presented on the settlement of the order to he entered hereon.
and others v.
(Oi'l'tJuit Court, E. D. Michigan.
October 15, 188,3.)
QUITCLAIM DEED-NOTICE TO GRANTEE.
'rhe of a quitclaim deed puts the grantee upon inquiry, and precludes his claiming the rights of a bona fide purchaser without notice. Especially is this so where the conveyance is only of the" right, titre, and interest" of the grantor. ' At common law a deed of release Was operative only when made to a party in actual possession of the land.
DEED OF RELEASE-EFFECT AT CoMMON LAW.
A.CTUAL NOTICE TO PURCHASER.
Where a proposed purchaser of land was once distinctly informed Ulat it did not belong to the party of whom he was buying, held no defense that he had .forgotten the information.
This was an action of ejeotment,to recover possession of determine the title to a lot of land in Ingham oounty. Plaintiffs' chain of title was as follows:
(1) The United States to Edward Mundy. Patent dated January 15, 1837, and proven by certified copy. (2) Edward Mundy to Clarkson Runyon. Warranty deed, dated July 5, 1837, recorded July 31, 1877,40 years after its execution and delivery. (3) The death of Clarkson Runyon in 1846, and the inheritance of the plaintiffs as his heirs at law.
The uossession of defendants was admitted. as follows:
(1) Edward Mundy to George Sedgwick. This was a devise dated January 2, 1851, which became operative in that year by the death of Mundy, and was proven by certified copy of his will from the probate court of the county. This devise did not purport to convey any particular piece of land, but, was a general devise to Sedgwick, in trust, of all the lands of which Mundy might die seized, with power to sell and convert them into cash at any time. (2) George SedgWick and wife to Charles Shepard. Quitclaim deed, dateQ