Steelman v. Weiskittel

Citations

• 88 Md. 519
• 42 A. 216
• 1898 Md. LEXIS 244

Syllabus

<p>Collateral Security — Sale of Pledge upon Default — Subsequent Purchase from Buyer by Pledgee — Redemption.</p> <p>A borrowed a sum of money from B, pledging with him as collateral security for the loan three bonds, with the right to sell the same at public or private sale upon default, without notice. The loan was not paid when due, and B caused the bonds to be sold by a broker at the Stock Exchange. They were bought by C, who was B’s lawyer, but was not acting for him in this matter, and bought the bonds for himself. Subsequently, C sold the bonds to B. When they had appreciated in value, plaintiff, A’s assignee, filed a bill alleging that C had bought the bonds as agent or trustee for his client, B, and that since a pledgee cannot purchase at his own sale, the bailment continued, and that plaintiff was entitled to redeem the bonds upon payment of the debt. Held, that these allegations were not sustained by the proof, but that C bought the bonds in good faith for himself and acquired a valid title, which he was entitled to transfer to B, who then held the bonds discharged from any right of redemption on the part of the pledgor.</p>