or he may have recourse to the property pledged. In case he elects to sue, he need not first return the pledge, but may hold it until he has recovered his debt; but after the debt has been paid, he must return the collateral security or make himself liable to an action." In some states, statutes provide that the security must be produced, or its absence satisfactorily accounted for, before the pledgee can recover the debt. SALE OF THE SECURITY 16. If the pledgee elect to have recourse to the security, he must proceed according to the rules of law which govern such matters in the particular jurisdiction of the contract; he must either secure a forfeiture and an order for a judicial sale at public auction, from a court of equity, or sell without judicial process at public auction upon giving reasonable notice to redeem, and of his intention to sell, to the pledgor." This last named proceeding, as a right to recover the claim, is implied from the contract, and it is the usual course now pursued in most jurisdictions. Where a definite time is fixed for the payment of the debt, or where notice and demand have been waived by agreement, there is no necessity of demand of payment and notice of sale, but to avoid possible difficulties this demand and notice should always be made before a non-judicial sale." The notice must fix a reasonable time and place of sale; the pledgee must exercise reasonable care and diligence in order to get the value of the property, and the sale should be in good faith." A letter addressed to the pledgor's proper post-office informing him of the sale, or notice of sale published in a newspaper of the place of residence of the pledgor, or notice to the agent of the pledgor, are sufficient notices of sale." If the pledgor at the time of making the pledge 636 Gray (Mass.) 146 (1856); 98 Pa. 80 (1881); 50 N. Y. 474 (1872). 644 Denio (N. Y.) 227 (1847). 66 108 Pa. 258 (1885); 165 Mass. 467 (1896); 65 Am. & Eng. Encyc. Law (1st Ed.), Vol. 18, p. 670, note. receive notice of sale, he cannot complain afterwards of want of notice. The pledgee cannot sell without first calling upon the pledgor to redeem the pledge; not to notify the pledgor will make the sale invalid; and, if the pledgor offer to redeem, a sale made after such offer is invalid." The pledgor may, however, waive all objection to the sale, and, if he do so and keep silent and make no objections to the same," or if the pledgor give the pledgee a right to sell in such manner as in his discretion may be necessary, a sale without notice to him is good." A sale of stocks at the board of brokers is not deemed a public sale, but is essentially a private sale," and a private sale is invalid, unless ratified by the pledgor." Stocks are not like goods or other articles of personal property, or variable quality, and the sale of one parcel, by a pledgee, will be just as good as if he sell the specific shares; all being of equal worth, the sale of one batch fulfils the purpose as well as another. The pledgee of stock is not obliged to sell, unless required by the pledgor to do so." The money received from the sale becomes the pledgee's own to the extent of his debt and whatever expense the pledgee has been put to in the sale; the balance he holds as money had and received for the pledgor's use." The pledgee cannot legally purchase at his own sale, and, if he do, the sale is voidable and presumably void, but the pledgor may approve of it, or may afterwards authorize it, or at the time of making the pledge may agree that the pledgee may purchase. If the pledgee sell wrongfully, the pledgor can recover from him the full value of the pledge at the time of sale in excess of the pledgee's claim with interest; and, if it be an unlawful sale of stock, the pledgee must pay the highest price attained in the market at any time afterwards." In many cases it is best for the pledgee to have a judicial 68 74 Cal. 250 (1887); 116 Pa. 573 (1887). 69 165 Mass. 467 (1896). 70 133 N. Y. 660 (1892). 7140 Barb. (N. Y.) 648 (1863). 72 16 N. Y. 392 (1857). 73 27 Gratt. (Va.) 749 (1876). 74 78 Me. 465 (1886). 75 57 Pa. 474 (1868); 31 Conn. 339 (1863). sale of the pledge; for it offers a more complete remedy to the pledgee than his right to sell the pledge at non-judicial sale after notice. A judicial sale concludes all parties; the interest of all parties, pledgor, pledgee, creditors, whoever claims said pledge, may therein be adjusted and adjudicated; it protects a pledgor against wrong and oppression and will protect an innocent pledgee." In some cases the pledgee's only remedy is by a proceeding in equity; as where the pledgor cannot be found, or where the pledge consisted of title deeds. The courts will scrutinize closely the dealings between borrower and lender, pledgor and pledgee, and refuse to enforce them when they are unjust and unconscionable." RIGHT OF REDEMPTION TERMINATION 17. Until the right of redemption is foreclosed by judicial decree or by sale after notice, the pledgor's right to redeem the security exists, and may be exercised at any time;" and the right survives to his representatives. This right is part of the contract of pledge in which there can be no valid stipulation that there shall be no redemption after default, as the law recognizes no agreement to prevent a redemption of the pledge;" and this is based on the reason that otherwise the borrower would be put too much in the power of the lender, as the former, being distressed at the time, is generally inclined to submit to any terms proposed." The parties may agree at any time after entering into the contract, that the creditor (pledgee) shall take the pledge in satisfaction of the debt, and that he may take it at a stipulated price and credit the pledgor with the amount."1 A pledge is terminated when the debt is paid, unless both 76 91 N. Y. 531 (1883); 152 Mass. 189 (1890). 774 Denio (N. Y.) 227 (1847); 35 Mich. 302 (1877). 787 J. J. Marsh. (Ky.) 322 (1832); 35 Mich. 302 (1877). 79 Jon. Bailm., Sec. 553. 80 Am. & Eng. Encyc. Law (1st Ed.). Vol. 18, p. 721. 81 Ibid. parties otherwise agree;" though the pledge may be satisfied in various ways without payment. A tender of the debt on the day it is due terminates the pledgee's lien. On termination of the pledge, the pledgee's right in the property pledged as security ceases and it reverts to the owner, in the absence of any agreement to the contrary." If the property pledged be lawfully out of the pledgee's hand, it is his duty at once to regain it and restore it to the pledgor with any interest, dividends, income, profits, and advantages received, or derived, by him from the pledge, during the running of the lien." The pledgee of mining or other stock, however, is not obliged to return the identical stock, but may give back similar stock to that pledged. The delivering back of the possession of the pledge to the pledgor with the pledgee's consent terminates the pledge, though such redelivery may be excused if it appear that the pledge were lost, or destroyed, without negligence or want of ordinary care, on the part of the pledgee." INNKEEPERS NATURE OF THE BAILMENT 18. The business of an innkeeper is one of the exceptional bailments which technically belongs to the class specified as being "for the mutual benefit of both bailor and bailee, in which the purpose of the bailment is that the bailee shall do something which will be beneficial to the bailor, and receive compensation therefor from the latter."" DEFINITIONS 19. An inn is a public house kept for the lodging and entertainment of such as may choose to visit it, and providing what is necessary for their subsistence, for compensation." An innkeeper is one who holds himself out as ready to receive all travelers and sojourners who are willing to pay at price adequate to the accommodation provided, and who come in a situation in which they are fit to be received." A traveler is one who travels, or journeys, in any way from place to place; a wayfarer. A commercial traveler is one who travels for a mercantile, or other business house, to solicit orders, collect accounts, and the like. The term inn is synonymous with tavern and hotel, especially when employed in statutes to designate places authorized under license to sell intoxicating liquors.* The English Innkeepers' Act declares that the word "inn," as used in that act, shall be interpreted to mean any hotel, inn, tavern, public house, or other place of refreshment, the keeper of which is now, by law, responsible for the goods 1 See subtitle Kinds of Bailments supra. 2 Cent. Dict.; 35 Conn. 183 (1868). 33 B. & Ald. (Eng.) 283 (1820). |