In re the Assignment of Bonner , 8 Daly 75 ( 1878 )

Charles P. Daly, Chief Justice.

The court acts, in this proceeding, as a court of general jurisdiction, and in respect to the assigned estate, and any matter involved therein, may exercise all the power of a court of equity (L. 1877, c. 66, § 25). Having all the necessary parties before it in this case—the petitioners, the assignee, the creditors and the bank—it may do all that a court of equity could do in respect to the claim of the petitioners upon the surplus in the hands of the bank, and determine whether it should be paid over to the petitioners or to the assigned estate for the benefit of the creditors.

Bonner & Co. had, as against the petitioners, no claim to the surplus in the hands of the bank. ' The stock was pledged with them as security for money borrowed, and was repledged by them with the bank for money borrowed from the bank. The bank have sold the stock for a greater amount than the sum borrowed from them, and having been paid their debt they have no claim to the surplus in their hands, and, as 1 understand, make none.

Bonner & Co. have no claim to it. The)r received, by repledging the stock, as the referee finds, the whole amount proportionally, for securing the payment of which it was pledged to them by C. J. Osborn & Co., Wheeler & Thomas, and Robins & Robinson. Practically, they have been repaid; and the bank has been repaid, and if Bonner & Co. could have no claim to the surplus, their creditors can have none. The jmtitioners were entitled to a return of their stock upon offering to repay Bonner & Co. the amount loaned upon it. C. J. Osborn & Co. offered to do so, but Bonner & Co. could not return it, for the reason that they had parted with it. No offer, it would appear, was made by-Wheeler & Thomas, nor by Robins & Robinson, which, as respects this application, is not material; for an offer to repay the amount borrowed, with the demand of the stock after the stock had been sold by the bank, would have been a useless ceremony. The petitioners, as the owners of the stock, are entitled to whatever remains in the hands of the bank, the loan by Bonner & Co. and the loan by the bank being each paid through the repledging and sale of the stock.

If the bank sold the stock without a demand from Bonner & Co. of the amount loaned upon it, Bonner & Co. are not injured, for they have received all they advanced upon it. The amount so advanced was the extent of all right or claim to it which they had, and the only one to be injured by the sale of it were the petitioners. The petitioners are not seeking indemnity for being deprived of it by the sale, and could not, as against the bank, the bank being a bona fide holder. (McNeil v. The Tenth National Bank, 46 N. Y. 325.) They are simply, as'the owners of the stock, asking for the payment to them of the surplus which remains after the sale, and after the claims upon it, respectively of Bonner & Co. and of the bank, have been satisfied. I wholly fail to see what right, legal or equitable, Bonner & Co.’s assignee has to this surplus. The stock never became the property of the assignor’s. They had the right merely to hold it as security for the repayment of the amount advanced upon it, and to sell it, if, upon a demand, payment of the amount loaned was refused. They made no such demand-, but wrongfully repledged it to another, and neither they nor their creditors lose anything by the payment of the surplus which remains to those to whom it rightfully belongs. The petitioners, in my judgment, are entitled to the surplus, to be distributed, as they have, between themselves, agreed upon.

Petition granted.