176 MITCHELL
FEDERAL
and another v.
RODERTS,
as Assignee, etc.
(Oircuit Court, E. D. Arkansas. April Term, 1883.) 1. MORTGAGE OF Ni)T';;S-PLEDGE.
A mortgage of personal property is a sale of the property byway of securIng a dellt, with a contiition that if the mortgagor pays the deLt the sale shall Le void; a pledge contains no words of sale, Lut an authority, if the deLt is paid, to sell the pledge for that purpose. In the former case the title passt·s to the mortgagee; in the latter, the title remains in the pledgeor, although possession is glven to the pledgee. SAME-TENDER AT CO)DlON LAW.
2.
At common law a tender of the deht on the law-day satisfies the condition of the mortgage, and discharges the property from the incumbrance as eirectually as payment, but the deLt remains, and may Le recovered by action at law. AFTER 13IlEACII OF CONDITION.
3.
The geueral rule is that at common law a tender of the deht after breach of the condition does not operate as a discharge of the mortgage. But this rule is not uniform, and in New York, :Michigan, and New Hampshire a tender of the deht after maturity has the same eirect as a tender on the law-day, and releases the lien of tile mortgage. A tender of the de'Jt after its maturity extinguishes the lien on personal property pledged to secure its payment, and the pledgeor may recover the pledge or its value in any proper form of action, without keeping the tender good or bringing the money into court; and the pledgee may have his action for the deht.
·· SAME-TENDEll AFTER UATUHlTy-EFFECT ON LIEN.
6.
DEBT PAYABLE IN MONEy-EFFECT OF TENDER.
A debt paJ·able in money is never by a tender. It is only waere a deLt is payal.le in specitic articles of personal property that II tender operates as a satbfaction of the demand. PLEDGE FOil DEBT OF ArWTIIER.
Where the owner of property pledges it for the debt of another, he is to be treated as standing in the relation of a surety. SA)lE-TENDER BY PRINCIPAL OF SURETY.
7. 8.
If the principal debtor, after the maturity of the debt, tenders the amount due to the creditor, and he refuses to receive it, the surety is discharged. SA)IE--'VUEN CO!\SlDEIlED A SURETY.
'When property of any kind is mortgaged or pledged by the owner to secure the debt of another, such property occupies the po..;ition of surety, and whatever will discharge a surety will discharge such property.
The plaintiff B. E. Mitchell was the payee and owner of two nee gotiable promissory notes executed by one A. H. Blythe, each for the sum of $1,000, which he indorsed and delivered to the Commercial Bank of Texarkana for collection. Subsequently his brother, S. T. Mitchell, borrowed $500 on his own account from the bank, for which he executed his note, and to secure its payment assumed, as agent for B. E. Mitchell, to pledge the two Blythe notes belonging to the latter, and then held by the bank for collection. S. T. Mitchell tendered payment of his note after its maturity, and afterwards, as agent for B. E. Mitchell, demanded the surrender of the pledged notes. The defendant 11eclined to accept the tender or deliver the notes, upon the ground that B. E. Mitchell was liable to the bank upon his indorsement of the note of one H. M. Beidler for $350; and afterwards ad· vertised the notes for sale to pay the note of S. T. Mitchell and the
MITCHELL V. ROBERTS.
777
Beidler note. Thereupon the bill in this case was filed, setting up the tender, and praying for an injunction to restrain the sale of the pledged notes, and for a decree requiring the defendant to surrender the same to the plaintiff B. E. Mitchell. The tender was not brought into court, and the bill does not offer to pay the S. T. Mitchell note. The answer admits the tender of the amount due on the S. T. Mitchell note, and alleges it was not accepted and the pledge surrendered because B. E. Mitchell was indebted to the bank in the further sum of $350 on his indorsement of the Beidler note. The tender was not refused because it was coupled with any condition, but because it did not include the amount of the Beidler note. Joyner rt Byrne, for plaintiffs. O. D. Scott and J. M. Moore, for defendant. CALDWELL, J. The authority of S. T. Mitchell to pledge the Blythe notes, belonging to his brother, as security for his own note of $500, is not open to contestation. The original bill expressly admits his authority to do so; and the amended bill admits it by implication and ratifies the act, and pleads the tender of the am'mnt due on the S. T. Mitchell note in extinguishment of the lien of the pledge. It is equally clear the Blythe notes were not pledged as security for the Beidler note discounted to the bank by B. E. Mitchell. The answer alleges that Mitchell's liability as indorser of this note was fixed by due presentment for payment and notice of non-payment. This is denied by the replication, and there is no proof to support the answer. It is clear, therefore, upon the case as it stands, that the assignee had no right to retain the Blythe notes as a pledge for the payment of the Beidler note, because it is not shown that the bank or its assignee had any claim against B. E. Mitchell on account of his indorsement of that note or otherwise. The following, then, are the facts upon which the case must turn: The debt due the bank was the debt of S. T. Mitchell. The notes pledged to secure its payment were the property of B. E. Mitchell. The debtor, S. T. Mitchell. tendered to the defendant, who is assignee of the bank, the full amount of the debt after its maturity, and as the authorized agent of B. E. Mitchell demanded the return of the notes pledged as security. Upon these facts is the plaintiff B. E. Mitchell entitled to recover the notes belonging to him, and which were pledged to secure the payment of the debt of S. T. Mitchell, without paying the latter's debt? This question is of easy solution, both upon principle and authority. The transaction was not a mortgage, but a pledge, and must be tested by the rules applicable to that class of bailments. This distinction is important. Mr. Parsons says: "The difference between a pledge and a mortgage has not until lately been strongly marked. In recent times, howe\"er, and in this country, this distinction is assuming a new importance. In all our commercial cities the pledging of personal property, especially of stocks, has been yery common, and recent cases haye established, or at least atlirmed, rights
778
FEDERAL BEPORTER.
and liabilities peculiar to such contracts,and quite different from those which attend a mortgage." 2 Pars. Cant. 112; Jones, ClJat. Mortg. § 7. In a late work the difference between a mortgage and a pledge of stocks is concisely stated. "A moriaane," savs the author "is a O with a condition 'that if sale of the stock by way of securing a the mortgagor pays the debt the sale shall be void; It pledge contains no words of sale, hut an authority, if the debt is not paid, to sell the pledge for that purpose. In the case the titie passes .to Ule mortgagee; in the latter, the title remains :)1 the pledgeor, although possession is given to the pledgee." Dos Passos, Stock Brokers, G58. At common law a mortgage was It conveyance to the mortgagee, to he void upon cOllditioll the mortgagor paid the debt at the specified day, and to become absolute on failure so to pay. The mortgagee waa investeif with the legal title. It was not necessary to the validity of the mortgage that the possession should pass to the mortgagee, though the right of possession was in him. The mortgagee acquired the title of the property, and the parted with th title as in the case of sale, reserving only the right to defeat the transfer and reacquire the property by paying the debt on the day named. If the mortgagor paid H18 debt or made a legaltender of it at the specified day, the condition of the mortgage was satisfied, and the pl'Operty forever discharged from the incumbrance; but upon default of payment according to the condition, the absolute title, at law, vested in the mortgagee. . A pledge is a bailment of personal property as a security for some debt or engagement. It is completed by a delivery of the property; it does not transfer the title; it only gives the pledgee a lien upon the property for his debt, and the right to retain the possession until his debt is paid. But tbe non-payment of the debt, even after it is due, does not work a forfeiture of the pledge; the title remains in the pledgeor until it is divested either by a foreclosure in equity or bya sale on due notice. Story, Bailm. §§ 286, 287,308-310; Edw. Bailm. §§ 245, 279. \\'here the thing pledged is a chose in action, the term "collateral security" is now most commonly applied to the transaction, and is the term used by the parties in this case; but this change of name has worked no change in the Jaw. At common law a tender of the mortgage debt on the law-day satisfies the condition of the mortgage, and discharges the property from tbe incumbrance as eft'ectually as payment; but the debt remains, and its payment may be enforced by an action at law against the .-\.lld in pleading a tender on the law-day in discharge of the condition of a mortgage, the mortgagor is not required to allege continued readiness to pay, nor need he bring the money into conrt. The tender, when made, di scharged the incumbrance, 110t conditionally, but absolutely and forever.
v.
ROBERTS.
779
"If A. borroweth a hundred pound of B., and after mortgageth land to B. upon condition for payment thereof, if A. tender the money to B. and he refuseth it, A. may enter into the land, and the land is freed fore,er of the condition, but yet the debt remaineth, and may be reco\"ered by action of debt." Harg. Co. Lit. [209b,] § 338. And vpon t.his point the cnrrent of authorities is unbroken from Lord COKE'S time to the present. Jones, l\lortg. §§ 886, 891, and cases cited; Schearff v. Dodge, 33 Ark. 346. But the general rule is that at common law a tender of the mortgage debt after breach of the condition does not operate as a discharge of the mortgage. The ground of this rule is that upon failure to pay at the specified day, according to condition of the mortgage, the mortgagee's title at law becomes absolute, and he cannot be required to accept the tender and restore the property. It is true that after breach of the condition the mortgagor has in equity a right to redeem, but the only effect of a tender after that time is to stop interest and protect from cost so long as it is kept good. Jones, Mortg. §§ 9, 892; Jones, Chat. Mortg. § 632; Whart. Cant. § 972; Rowell v. Mitchell, 68 Me. 21; Erskine v. Townsend, 2 Mass. 493; Currier v. Gale, 9 Allen, 522 ; Holman v. Bailey, 3 Mete. 55; Shields v. Lozear, 34 N. J. Law, 496; Storey v. Krewson, 55 Ind. 397; Perre v. Castro, 14 Cal. 519; Himmelmann v. Fitzpatrick, 50 Cal. 650. But upon this point the authorities are not quite uniform. In N ew York, Michigan, and New Hampshire a tender of payment, after maturity of a debt, has the same effect as a tender on the law-day, and releases the lien of a mortgage given to secure it. Whart. Cant. § 972; Jones, Mortg. § 893; J(ortll'/'ight v. Cady, 21 N. Y. 343; Edwards v. Ins. Co. 21 Wenrl. 4tH; Jloylluhan v. Moore, 9 1\1ich. 9; Potts v. Pl:listed, 30 l.lich. 149; Sn'ett v. Horn, 1 N. H. 332; Robinson v. Leavitt, 7 N. H. 73. The ground of this ruling, in the states last mentioned, is that a mortgage is no lor.ger what it was originally at common law-a conveyance to the mortgagee, defeasible only upon payment at the specified day; but that it is merely a security for the debt to the mortgagee, creating a lien on the property analogous to that created by a pledge of goods as a security for a debt, and that a tender after breach of the condition has the same effect as a tender made in case of a pledge of personal property. In Jones, Mortg., it is said the New York rule in regard to the effect of a tender after breach of the condition does not apply in that state. nor in other states, except Michigan and Oregon, to chattel mortgages; whiclJ, it is held, do not create a lien merely, but vest the legal title in the mortgagee. Jones, Chat. Mortg. §§ 634, 637. But whether a mortgage is to be regarded as retaining all its common-law incidents, or as a mere security for a debt, and whether a tender of the debt after its maturity does or does not the lien of the mortgage, need not be decided.
780
FEDERAL REPORTgn.
In the case at bar the question is whether a tender of the debt, after its maturity, extinguishes the lien on personal property to secure its payment. Upon this question there is no conflict in the authorities. The rule is settled that a tender of the debt, for which property is pledged as security, extinguishes the lien, and the pledgeor may recover the pledge, or its value, in any proper form of action, without keeping the tender goocl or bringing the money into court; because, like a tender of the mortgage debt on the law-day, the tender having once operated to discharge the lien it is gone forever. This rule accords wi ttl justice and fair dealing. It would be an exceeding great hardship on the debtor if the creditor had the right tu refuse to accept payment of the debt after it was due, and at the same time retain the debtor's property or a lien upon it for the debt. Advantageous sales would be prevented, collections delayed, and credit lost by the inability of the debtor to free his property. In many cases debtors would be ruined before they could obtain relief by the slow process of a bill in equity to redeem. And on a bill to redeem a debtor would have to pay interest and costs down to the decree, unless he had kept the tender good. Thus the debtor, in order to protect himself against interest and costs, would be deprived of both his property and the use of his money at the pleasure of his creditor, or until the end of a chancery suit could be reached. On the other hand, a creditor who refllses to receive payment of his debt when lawfully tendered, cannot complain at the loss of his security for that debt, "because it shall be accounted his own folly that he refused the money when a lawful tender of it was made unto him." A debt payable in money is never discharged by a tender. It may operate to discharge liens and sureties, and deprive the creditor of all collateral secllrities, but the debt remains. It is only where a debt is payable in specific articles of personal property that a tender operates as a satisfaction of the demand. In such cases, a tender properly ma,de discharges the debt, and the articles tendered become the property of the creditor, and afterwards are kept at his risk and expense Barlle.ll v. Bliss, 1 D. Chip. (Vt.) 3DD; S. C. 12 Amer. Dec. GDG; Sheldon v. Skillller, 4 Wend. 525; S. C. 21 Amer. Dec. 161 ; Limb v. Lathrop, 13 \Vend. D3; S. C. 27 Amer. Dec. 174-, and note. The pledgee may, therefore, notwithstanding tho tender, have his action at law against tbe neb tor for his debt; for while the tender extinguishes tbe lien an<1 ren<1ere the further possession of the pledgee tortious, it noes not relie,"e the debtor from personal liability to pay the debt. Bacon's Ab1". tit. "Bailment, B;" Edw. Bailm. § 230; Story, Bailm" § 34-1; Jones, § 8D3; Jones, Chat. § 7; ]{.ortieright Y. Cady, 21 X. Y. 34-8; llIolJllalwn Y. Jloure, D D; Potts Y. Plaisted, 30 )'Iicb. 14-D. The same rule applies to n1P.chanics' liens for "ork and lahar bestowed on personal property. Upon a tender of the amonnt due, the lien is di3charg8d and the OI"ner may recoyer his property, or :lUill-
MITOHELL V. ROBERTS.
781
ages for its detention, and the bailee who bestowed the labor must resort to his action to recover his money. Phil. Mech. Liens, § 511; Ball v. Stanley, 5 Yerg. 190; Moynahan v. llfoore, 9 Mich. 9. There are other grounds upon which the plaintiff B. E. Mitchell is entitled to the relief which he seeks. Where the owner of property pledges it for the debt of another, he is to be treated as standing in the relation of a surety. Edwards, Bailm. § 302; Killg v. Baldwin, 2 Johns. Oh. 554; S. O. 17 Johns. 384; Strong v. Wooster, 6 Vt. 536; Illgallsv. Mm"gan, 10 N. Y. 178; Eddy v. Traver, 6 Paige, 521. And it is well settled that if the prineipal debtor, after the maturity of his debt, tenders the amount due to the creditor and he refuses to receive it, the suretf is discharged. Brandt, Suretyship, § 295; Sears v. Van Dusen, 25 Mich. 351; Joslyn v. Eastman, 46 Vt. 258; v. Packard, 2H Cal. 194. And when property of any kind is mortgaged or pledged by the owner to secure the debt of another, such property occupies the position of surety, and whatever will discharge a surety will diseharge such property. Brandt, SUl'etyship, §§ 21, 22; Christner v. Brown, 16 Iowa, 130; Rowan Sharps' etc., Co. 33 Conn. 1; Union Bank v. Govan, 10 Smedes & M. 333; White v. A tilt, 19 Ga. 551. There is nothing in the decisions of the supreme conrt of the state in conflict with the conclusions reached. In ScllGar)! v. Dodge, 33 Ark. 346, the court affirm the doctrine that a tender of the debt on the lawday discharges the mortgage, but hold that a tender of the money due on a contract for the purchase of land, where the vendor retains the legal title, does not discharge the vendor's lien, and that he be divested of the legal title except upon actual payment of the pm'ohase money. In Hamlett v. Tallman, 30 Ark. 505, defendant was eni.-itled to a landlord's lien, under the statute, on the crops, consisting of cotton, for the rent, and was in possession of the cotton, but had not commenced proceedings under the statute to enfoa-ce his lien. The rent, which was payable in money, was tendered by the purchaser of the crop from the tenant, and the landlord refusing to accept the tender the purchaser brought suit to recover the cotton, and obtained a judgment below for ihl value, without dedueiiou for the rent, and without bringing the tender into court. In the opinion in the case, the difference between the effect of a tender on a creditor's right afterwards to recover his debt, and its effect on a lien to secure the debt, is not adverted to, and the decision seems to be rested solely on the weli-understood rules applicable in the former case, viz., that a tender is not equiyulent to payment of the debt, and that its only effect is to stop interest and protect from costs so long as the tender is kept good. It is undoubtedly true that a tender does not operate as a satisfaction of a money debt. but it is equally true that it does in many cases haye the effect to discharge liens and depriYe the creditor of all collateral securities, and for this purpose it is the exact equiYalent of payment. The case decides that the landlord's lien giyen by statute
782
FEDERAI, REPORTER.
is not discharged by a tender of the rent, but the reasoning by which that conclusion was reached is not given, and is not very obvious, and for that reason the case as an authority must be restricted to cases on all-fours, as was the case of Bloom v. ltlcGehee, 38 Ark. 329, wher'.) Hamlett v. Tallman was followed without inquiry or discussion. The authorities supporting the conclusions reached in the case at bar are not cited or referred to, and it is extremely plain the court did not intend to overrule them or dispute their authority. Let a decree be entered requiring the defendant to delivpr to the plaintiff B. E. Mitchell the two Blythe note,;, pledged to secure the payment of the note of S. T. :Mitchell. A pledge differs from a chattel mortgnge in three essential characteristics: (1) It may Le constituted without any contract in writing, mere:y by delivery ot the thing pleelged; (2) it is constituted by a delivery of the thing pledged. and is continued only so long as the possession remains with the creditor; (3) it does not generally pass the title to the thing pledgeel, Lut gives only a lien to the creditor, while the debtor retains the general property. But. as regards chases in action, the distinction that a mortg'lge is a transfer of the title, while a pleelge is a mere lien without a transfer of title, does not hold good; for, in most cases. a pledge of choses in action can only be made effectual by a transfer of the legal title. Thus, in a pleelge of negotiaLle paper, the title necessarily passes by a delivery of the paper if this dues not require indorsement, or if it does require inllorsement, then by delivery after such indorsement. To make the pledge all effectual sccmity. it is necessary that the ple,lgee should have the legal title. The same is trne in general as to otller transfe:-s of choses in action. such as transfers of corporate stocks. A transfer of the title to s'Uch incorporeal property is generally an essential part of the delivery of it in pledge. An aLsolute transfer of such property as security for a liebl., is a pledge and not a mortgage. The general property may be regarded as remaining in the debtor, though the legal title be transferred to the creditor. A transfer of sueh property Ly an assignment which is not in form or substance a mortgage, will constitute a pledge of it.! It is true that tllere may be a mortgage of a promissory note or other chose in action, but to constitute a mortgage of it the conveyance must be made substantially in the form of a mortgage: that is, it mllst be a conveyance upon a condition or defeasance expressert in the instrument of con"'yance, or by a separate instrument which would be construed as part of the conveyance. Tlms, if a policy of insurance be assigned, and the instrnmeut of assignUlent or a separate elefeasnnce provides that the aS3ignment shall be null and void upon the payment of the debt secured, but otherwise shall continue in full force, the tr:lllsfer constitutes a mortgage and not a pledge. "The purport and subst.mce of the contract, and the intl'ution o.f the parties, as disclosed by tile language they have made use of to express it, indicate a sale or mortgage rather than a pledge." 2 An assignment, absolute in form, of a promissory note, or other contract, as collateral security, is a pledge rather than a mortgage of it. The fact tllat the title passes in form, does not make the transaction a mortgage. A transfer of title is necessary in order that the creditor may have full contrul of the contract, and the means of proUlptly ellforcing it. 3 1 '''Pilson v Little, 2 S. Y. 443; Dewe}' v Eowman, 8 Cal 1;)1. 2
n Y. J. ay v.
Ben. Lire Ius. Co 31 Cal. I:?;:).
.:\111. 211,
p,,-,r 3
MITCHELL
7S;;
01'
"'< tender of the amonnt due on a debt for which property is held in plel1gc, fo" which collateral security has been given, at the time the del.Jt is due, or afterwards, wholly discharges the lien of the pledge, and revests the title to the thing pledged in the pledgeor, so as to entitlfo him to maintain trover 01' replevin t1lerefor.1 In this respect a tender is equivalent to aetnal payment. A tenJer ot a part of the amount of the deLt will not have the elIect to revest the to any part of the property pledged; 2 the debt must be paid as a whole, :,aci the tender, to be effectual,must be co-extensive with the whole dl'ut In one respect a tender is not equivalent to payment; for, altllongh the lien is discharged by either, the debt is not discharged 1y a tender, llut tile pledgee may still maintain his action for this. "\ creLlitor, by refusing a tender properly made cf the amount of a deLt seen "'d by a pledge, con verts it to his own use. He makes it his own so far to run the of any depreciation that may afterwards occur. He cannot sue for and recover the debt without making a proper allowance for the value of the pledge as it was at the time of the tender in reducing or satisfying the debt. 4 Ii in such case there lJe a surety of the debt, he is released; for the surety is entitled to have the security delivered up to him upon his paying the debt; and when the creditor has, by his own act, destroyed the securit:r or rendered it valueless, 01' put it out. of his power to give the surety the benefit of the sutstitution, the latter is discharged." Upon the pledgee's refusal of a temler of the whole amount of the debt secured, the debtor may maintain trover for the property, and he is entitled to damages to the full value of the property, without any alJatement for the amount for which the property was pledged. The creditor must resort to an action to recover the debt.. The refusal of the tender discharges the lien npon the property, and places the parties in relation to the property in the sallie position as if the debt has been pai,l, and no pledge had ever existed. G A tender, tl have the effect of discharging the lien of .. pledge, mnst be absolute and unconditional, and must in all other ways conform to the gene,-al rules re'.1ting to the moe1e of making tender. The.rnoney need not be. produced, if the debtor has it ready and offers tQ pay it, but the creditor d;spenses with the production of it in any manner; as, for instance, by expressly saying t,) the debtor that he need not pro,luce the money, as he wodd not accept it.7 But a bare refusal receive the sum offered, and a demand of a larger sum, are not enough to excuse an ad ual tender of the money. Thus, where a debtor met his creditor for the purpose of redeeming stuck held in pledge, and the amount due upon it having l.Jeen agreed upon, the debtor's agent amI broker was about to fill up a check for the amount, when the creditor requested that the business should Le postponed to the next day, and demanded the whole value of the stock, amonnt:ng to much more than the sum liqUidated, under the pretense that he was responsible as snrety flor the debtor, on another and separate account, the tender was held to be ineffect ual. 8 A tender, accompanier, with a demand for a receipt, or a diseharge of a lien, or a return of securities, is not an unconditional tender. A teneler should not be accompanied with a demand for anything more than the 1'1'0dt1ction and delivery of any negotialJle paper representing the deut which is
,0
1 R:-.lc:iff Y. Davies, ('ro. Jac. S. C. 1 Dulstl'. 2.' i Cogg:::. v. Bernard, 2 Ld. raym. 9,'g; S. C. Holt, 523; Ryatl \'". Rowles, 1 _\tk. ]6:), 167; Haskl!ls y, Keliy, 1 Rob. (X. Y.) 100; S. C.1 AIJb. Pro (X. S.) 63; B-a'l Y. Stanley. ;) Yerg. Crean.) H-9; Y. Clark, 55 Ga, 53. 2 .Appleton Y. Pa St. 3'31. 3 Bigelow Y. Youilg. 30 Ga. 1"21. iGr:swolll V. Jackson, 2 Ed",\". (X. Y.) Ch. iGI;
nffirmed , 4 Bill, IInth:lwny v. Fall Rh'el' :Kat. Bit pk. 131 :'IbRS. It; lIallcock v. Fra:,kiin Ins. Co. 11-1 )1a55. ]53. 5Gl'bwultl Yo 6 Ball v. St:l nley, 5 Yerg. (Tell n.) 10:1. 7Thomas v. 10 East, 101; Kraus v. Arnolll,7 ::'l!oore, Hancock Y. Franklin Ins. Co 11'-1 :xrass. 13".
8 Duuham
Y.
Jackson, G \\'euu.
Y.) 22.
784
FEDERAL REPORTER,
sought to lJe paid.! Moreover, the tender must at all times be kept good; that is, the deUtor must constantly keep on hand the money tendered, separate from his other money, ready to pay over to the creditor whenever he might be ready to take it, aud III ust lJring the money into court. 2 A tender need not include interest upon the debt if none was contracted for, and none has accrued lJy way of damages after a demand. Thus, upon a pledge of a watch by way of a sale of it for $tl2, with an agreement the seller should have it again in 30 days, upon the payment of $87. a tender of the latter sum was hell! sutlicient, the five dollars bonus being reganled as in lieu of interest. 3 Upon the tender of the amount of a delJt for which an accommodation note is held as security, the maker of such note, being in effect a surety, is discharged. The creditor. by a tender from the prineip:ll delJtor, has in his hands the mcans of payment, and by his refusal to accept it discharges the snrety; and in an action by the creditor upon the collateral note, the maker of that need not plead the tenl!er, or bring the amount into court. 4 LEONAIW
A.
JONES.
Irass v. H'genholam. 27 Hun, (N. Y.) 4(1(;; Brookl n I aLlk v. De Grauw, 23 Welld. (N. Y.) 342. 2L-us:) v. Hie,ellbmam, supra.
SHines v. Strong, 46 How. N. Y, Pro 97; af. firmed. ·6 N. Y. 670. <Appletvll v. Dvnaldson, 3 Pa, St. 381.
STAFFORD NAT. BANK V. SPRAGUE
and others.
(Circui' Court, D. Connecticut. 1. 2.
Septcmber 15, 1883.
UNRECORDED DEED-ATTACIUNG CREDITOR-CONNECTICUT STATUTE.
By the law of Connecticut an unrecorded deell is inctIectual, as against attaching creditors of the grantor, unless they had notice of such conveyance. S.um-PoSSESSIQN OF GRANTEE-NOTICE.
As a general rule, open, notorious, and exclusive possessio'1 by the grantee, u:1der an unrecordcd deed, is suffiCient to a legal presurllption of notice, to an attaching creditor of the grantor, of the existence of such conveyance; but the testimony in regard to the notorious posscssion must be clear and certain, and such as to make thc inference of notice to the creditor beyond serious que,stiou. OF TEXAXCY.
3. 4.
In such a cas" notice of a tcnancy will not, it scems, amount to constructive notice of thc les-or's tItle. DEED FOil BEXEFIT OF CBEDITOB-DESCnIPTIOX OF PROPERTY,
By the of Connecticnt, where the unly des:'l'iption of propcrty conveyed by a deed of is all the property of the grantors, real and personal, in eerta:n town- in that sta' e, named in such conveyance, the description is insujjc'ent, and the deed conveys no title to the Connecticut lands, TO CARRY ox Br:SIXESS-);ox-AsSEXTIXG CnEDIToRs-FnAuD.
5,
By tile law of Connecticut, wllere assignments, intended for the benefit of all the creditors. place the entire estate of the dchtor beyond thc reaeh of nonassenting creditors, in the hanlls of a trustee, who is empowered and d.reeted to carn' on an pxtensh'e a'ld hazardous m:lnufacturini:!: husi.ess for an indefinite pel'iZld, and thus sul,ject the property of the non-:lss'enting creditors to the hazards and uncertainties of sueh husines s . the CO" \'el'ances will he held fraudulent in law, so f:lr as they attempt to convey lands in Cunnecticut as against Ilonassenting creditors.
In Equity.