Faulkner v. Hill , 104 Mass. 188 ( 1870 )

Gray, J.

This is a very plain case. The defendants, after pledging goods to the plaintiff as collateral security for a debt, made an arrangement with Lamb, their former clerk, by which, in consideration of his agreement to pay and discharge all their debts, (including, of course, that to the plaintiff,) they conveyed to him all their partnership property, (including the goods pledged,) and, the better to enable him to receive the same for his own use and benefit, appointed him their attorney to demand, sue for and receive from all persons whatsoever all debts, goods and effects owing or belonging to the partnership, and upon the receipt of the same to execute releases and discharges therefor as fully and effectually as the defendants might do if personally present; and the defendants also covenanted not themselves to receive, release, acquit or discharge any of the debts or demands due to the partnership, or interfere with, or presume in any manner to exercise any control of, the affairs of the partnership without Lamb’s consent. The plaintiff never agreed to substitute Lamb as his debtor instead of the defendants.

Under these circumstances, the plaintiff’s delivery to Lamb of a portion of the property pledged, on receiving payment of a sum which was, so far as was known to the plaintiff or appeared by his invoice of the goods pledged, (though not in fact,) a proportional part of his debt, was not such a dealing with or disposition of his collateral security, as to make him liable to account with the defendants for any greater sum than that so received by him from Lamb.

But by the plaintiff’s subsequent sale by auction and purchase of the rest of the goods pledged, his debt was paid and discharged to the extent of the sum bid by him and stated in his account afterwards rendered to the defendants. The balanee of his debt, after deducting this sum, he is entitled tc recover in' this action.

Judgment for the plaintiff accordingly.