E. Bastheim Co. v. Schultz

JAMES, J.

This action was, as framed by the complaint, in form, claim and delivery for the recovery of possession of two certain diamonds. Omitting the more formal allegations of .the complaint, it was . alleged that on the fourth day of December, 1916, defendants Schultz and Schlager obtained the diamonds from the plaintiff “upon the representation that they desired to exhibit the same to a third party for the purpose of inspection and then and there promised and agreed to promptly return the same

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to said plaintiff. ’ ’ It was alleged, on information and belief, that the said Schultz and Sehlager had deposited the diamonds with defendants Cohn under some agreement, the true nature of which plaintiff did not know. By supplemental allegation the complaint was made to show that subsequent to the commencement of the action plaintiff had, by replevin process, caused possession to be taken of said diamonds from defendants Cohn. Defendant Sehlager defaulted ; defendants Cohn and Schultz made answer. The answer of Schultz was, in substance, a specific denial of the allegations of the complaint, while that of the Cohns showed that they had, in the regular course of their business as loan brokers, loaned to Sehlager, on the fourth day of December, 1916, the sum of one hundred dollars on each diamond, and that they held the diamonds in pledge as security for the repayment of said loan. The court upheld the right of the defendants Cohn to retain possession of the diamonds as security, and directed that possession be redelivered to them, with the condition that if plaintiff should pay the amount loaned by the Cohns upon the diamonds it should be entitled to possession of the property. Plaintiff appeals from the judgment and presents the appeal upon the judgment-roll.

In support of its appeal, plaintiff insists that under the facts found by the court in its decision the judgment should have been in favor of the plaintiff. By the court’s findings it was determined to be true that the plaintiff was the owner of the property in question and that it was entitled to the possession thereof were it not for the fact that Sehlager, having possession of the diamonds, had pledged them with the defendants Cohn as security for the loan.

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Before making a further analysis of the findings, the well-established rule may be adverted to, to wit, that a person purchasing or receiving in pledge personal property from another is bound to ascertain what the title and right is of the proposed vendor or pledgor, and that mere possession alone, at best, only furnishes