Kaufman v. Loomis

Citations

• 110 Ill. 617

Syllabus

<p>1. Pledge—sale under pledge—of the title—surplus funds. The owner of securities conveyed them, by a deed of assignment, in the nature of a deed of trust, to be held by the trustee as security for the payment of certain notes upon which the grantor was liable, and it was therein provided that if the grantor should fail to meet the payments on his notes the trustee might sell the securities so pledged, at either public or private sale, and such sale was made to two of the persons for whose protection the pledge was made: Meld, the purchasers at the trustee’s sale either acquired thereby the absolute ownership of the securities, freed from all trusts, to do with as they chose, or the sale vested the ownership in the purchasers as joint trustees, to be converted into money at their best price, to first pay off their own liability,—and any surplus funds, after paying.off all debts with which the trust was charged, would in equity belong to the grantor.</p> <p>2. Gtjabanty—release—failure to avail of proceeds of collaterals which are lost. A & B were indebted to a bank upon a note of $3000, and they were at the same time liable to the bank upon a note of $3500, given by them to 0 for his accommodation, and also upon another note for $1000, upon all of which D was liable as guarantor, and A & B owed the bank $2420 upon their own note, on which D was not liable. A & B and C desired an extension of the time of payment. To procure such time, C transferred to F, by a deed, certain securities, to secure, first, D, for carrying the $3500 note and guaranteeing the $3000 and $1000 notes; and second, to secure to the bank the payment of the $2420, and the surplus to 0, or his assigns. The trustee sold the securities to D and the bank for $1500, after which an offer was made to the bank and D of $11,000 for the securities, but the bank refused to sell at that price, and demanded $15,000, shortly after which the securities were rendered worthless by a decision of the Supreme Court