Manning v. Shriver

Robinson, C. J., delivered the opinion of the Court. The plaintiff loaned to the defendant $2500, for the payment of which he gave the following promissory note, and upon which this suit is brought: “$2500. Baltimore, August 21, 1891. “One year after date I promise to pay to C. C. Shrivel-, agent, or order at the bank, corner Lexington and ■Charles streets, .Baltimore, twenty-five hundred dollars, with interest at (6í ) six per centum per annum, for value received, having pledged with him as collateral security for this note, or for any other liability due to him, or to become due, or that may be hereafter contracted, four hundred and fifty shares (450) of the Loomis Improved Filter Company stock; also, policy for $10,000 in the Mutual Life Insurance Company of New York, No. 301,319; and I agree to maintain on demand ten per cent. (10;:) margin collateral security during the continuance of this note, and on the nonperformance of this promise or any part of it, I authorize ⁴⁴ O. C. Shriver, agent, to sell the collateral security at any broker’s board, or at public or private sale, at his option, without advertisement or notice to me, and with the right on his part to become purchaser thereof at such sale or sales freed and discharged of any equity of redemption; and I further authorize O. O. Shriver, agent, to use and transfer or hypothecate the same, they being required on payment or tender at maturity of the amount loaned to return an equal amount of said securities, and not the specific securities pledged. “Jos.

T. Manning.” The note not being paid at maturity, the plaintiff sent for the defendant and demanded its payment, and this the latter told him it was impossible for him to do. The plaintiff then asked him to get some of his relatives to take up the note, and this he said he could not do. The plaintiff then offered to surrender to him the note provided he would transfer the 350 shares of stock to the plaintiff, and this the defendant refused to do. Thereupon the plaintiff notified the defendant that he would sell the stock the next morning at the stock board, and that he must protect himself.

The plaintiff sent the stock to Messrs. Brown & Lowndes to sell, with instructions that if any one bid for it, not to let it sell for less than $7.50 per share, which would be about the amount due on the note. The stock was offered at sale on the stock board, and there being no bid for it, Mr. Clabaugh bought it in for the plaintiff at one dollar per share. The policy of life insurance had a cash value of $447, as ascertained from the agent of the company, and the plaintiff bought the policy for that amount, and gave the defendant credit for the same.

The defendant admits that this was the full value of the policy, and that he claimed no damage for its alleged conversion. ⁴⁵ The contention however is, that the plaintiff had no power or authority to sell the stock pledged as collateral security, and that the sale by him was a conversion of the stock to Ms own use, for which the defendant has the right to recoup in damages. The only authority, it is argued, to sell the stock, was upon the failure of the defendant to maintain or demand ten per cent, margin collateral security during the running of the note. The contract, it is said, contains two distinct promises, — one to pay the note at maturity, and the other to maintain the ten per cent, margin, — and “on the non-performance of this promise or any part of it,” the parties meant the non-performance on the part of the defendant to put up the margin of ten per cent, and not the non-performance of the promise to pay the note at maturity. This, it seems to us, is drawing very fine sight on the terms of this contract.

Grammatically speaking, it may he, that the language ought to have been “on the non-performance of these promises,” or either of them, “or of this contract or any part of it.” Construing however the entire contract, and not this isolated phrase, it is clear, we think, that this is what the parties meant. The same rule of construction which applies to all other contracts applies equally to the one now before us, namely, that it is to he construed according to its sense and meaning as ascertained, in the first place, from the language used, and which is to he understood in its plain, ordinary, and popular sense, unless it has in respect to the subject-matter acquired a peculiar sense distinct from the popular sense, or unless it plainly appears that the parties to the contract understood it in some other special and peculiar sense. We are now dealing with a promissory note, to secure the payment of which at maturity, the defendant pledges certain collateral securities, and, in addition thereto, he agrees to maintain on demand a margin of ten per cent. ⁴⁶ So there is not only a promise to pay the note when due, but also a promise to keep tip a certain margin, and when the parties say that upon “the non-performance of this promise, or any part of it,” the payee is authorized to sell the pledge, they meant upon the non-performance of either of the promise to pay the note at maturity, “or the non-performance of the agreement to keep up the margin when so demanded. ” We cannot suppose for a moment that the collateral security was pledged merely as a security for thé