10122.

#### Daniel *v. Nixon &*Wright.

Decided May *7,*1919.

Complaint; from city court of Millen—Judge Dekle. August 30, 1918.

The action was on three promissory notes of Mrs. Estelle P. Daniel, the defendant, payable to Nixon & Wright, the plaintiffs, dated in 1914, and for the amounts respectively of $513.75, $1,047, and $1,570. In the defendant’s answer she “admits each and every paragraph of plaintiffs’ petition, . . admits a prima facie case for said plaintiffs, . . admits that she signed the said notes, . . and that there is due on said notes the amount claimed by the plaintiffs in their petition;” and “by way of set-off and recoup*688ment” she pleads in substance as follows: In 1913 a corporation known as T. Z. & P. Y. Daniel Company which had been adjudged bankrupt made an arrangement for a composition of its debts, and she agreed to raise the sum' necessary for the composition. The creditors except the Yirginia-Carolina Chemical Company agreed to accept 30 per cent, of their claims; and that company agreed to accept 40 per cent, of its claim of $35,000, if paid in cash. Among the creditors were the plaintiffs, and through their Mr. Wright they' advised that $5,000 more be raised and that the $35,000 claim of the Chemical Company be purchased and transferred to him, representing his firm, and that it be then proved for the entire amount. Acting after consultation with him, the defendant obtained from a bank at Millen the $5,000 required for this purpose, the plaintiffs promising to the bank that on payment of the claim of the Chemical Company the plaintiffs, through him, would deliver the money to the bank in settlement of the $5,000 thus obtained; and the plaintiffs received this money for the purpose stated, and the claim of the Chemical Company was purchased and transferred to them, and in- the composition of the bankrupt corporation the plaintiffs received $5,000 on that claim. Under an agreement between the defendant and the bankrupt corporation she was to have its assets and the assets were to be applied to the payment of $35,000 that she borrowed for the purpose of making the composition; after which the corporation was to be released and to have its remaining property. It is alleged that the plaintiffs applied to their own use the $5,000 received by them and refused to pay it to the bank or to account for it; and that until after the making of the notes sued on she did not know that the plaintiffs had this money and had not applied it as they had agreed to do. She alleges that the plaintiffs are due her the $5,000, with interest, and prays that the amount of the notes sued on be deducted from this sum, and that judgment for the balance be rendered in her favor against the defendants.

*687Bloodworth, J.

The court did not err _ in sustaining the demurrer to the plea, or in directing a verdict for the plaintiff.

*Judgment affirmed.*

*Broyles, P. J., and Stephens, J., concur.*

*688The plaintiff demurred to the answer and moved that the court strike it, on the grounds that it “undertakes to set up a plea by way of set-off and recoupment of debts not between the same parties and in their own right;” that the validity of the notes sued on and the amount due on them being admitted by the defendant, a claim arising out of the alleged transaction can not be recouped *689'against.the suit; that the alleged failure of the plaintiffs to turn over the $5,000 received by them was a conversion and a tort, which can. not be pleaded as a set-off or recoupment against a suit on a contract. The court sustained the demurrer and struck the answer.

*F. H. Saffold,*for plaintiff in error, cited:

Civil Code (1910), §§ 4339-40, 4407, 5672; 9 *Ga.*594 (3, 4); 118 *Ga.*345; 128 *Ga.*336; 138 *Ga.*496; 11 *Ga. App.*488; 20 *Ga. App.*36 (4, 5); 94 *Ga.*171; 96 *Ga.*474; 123 *Ga.*784.

*C. H. & R. S. Cohen, H. J. Fullbright,*contra, cited:

Civil Code (1910), §§ 4403, 4407, 5521; 114 *Ga.*923; 13 *Ga. App.*280; 14 *Ga. App.*72; Id. 84; 119 *Ga.*926; 123 *Ga.*14; 124 *Ga.*944; 130 *Ga.*251; 129 *Ga.*234; 137 *Ga.*648, 654 (4); 49 *Ga.*.491 (6); 2 *Ga. App.*421; 5 *Ga. App.*251; 13 *Ga. App.*502; 17 *Ga. App.*565; 142 *Ga.*611; 55 *Ga.*356; 59 *Ga.*612; 81 *Ga.*210; 97 *Ga.*396; 110 *Ga.*392.