Court Opinion

ID: 3387450
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:43:54.157093+00
Date Added: 2024-06-11T14:02:44.074500
License: Public Domain

Fletcher Scott brought an action against The *Page 820 
National City Bank of Tampa for the alleged conversion by the latter of three hundred shares of stock in the Clarence Saunders Corporation, the property of the plaintiff. There were three counts to the declaration but demurrer to the first and second counts was sustained. As to the third count the defendant pleaded not guilty and by leave of court interposed a plea of set off in which it was averred that the plaintiff was indebted to the defendant in the sum of $836.36 with accrued interest and attorney's fees in the sum of one hundred and fifty dollars.
The plea avers that the debt arose in the following manner. The Scott Grocery Company and the plaintiff executed to the defendant on October 13, 1927, their joint and several promissory note in the sum of $10,500.00 due thirty days after date with interest at the rate of 10% per annum until paid with costs of collection and reasonable attorney's fees if not paid at maturity; that the plaintiff also indorsed the said note before delivery to the defendant; that on November 1, 1927, the sum of $3,466.14 was paid on the note; on the second day of the same month the sum of $446.92 was paid; on February 13, 1928, the sum of $5,392.15 was paid; on April 12, 1928, the sum of $238.95 and on May 23, 1928, the sum of $119.48 was paid on the note, leaving a balance due of $836.36 with interest on the amount from time to time remaining unpaid after November 12, 1927, the due date of the note; that by reason of the failure of the plaintiff to pay the note the defendant has incurred attorney's fees in the sum of one hundred and fifty dollars.
The plaintiff interposed a replication on equitable grounds to the plea of set off in which it was averred that the plaintiff was an accommodation party upon the note and received no consideration for signing it which the defendant knew at the time; that on November 10, 1927, the Scott Grocery Company executed to the Adjustment Bureau *Page 821 
of the Tampa Association of Credit Men, Inc., an assignment for the benefit of creditors and the trust was accepted by the assignee; that the two first payments on the note mentioned in the plea represented sums of money which the Grocery Company and the plaintiff had on deposit with the defendant. The second amount stated in the plea of set off, $446.92, was a sum of money which the plaintiff had on deposit in defendant Bank and both were applied by the Bank upon the note. That the sum of $5,392.15 mentioned in the plea was derived from the sale of the 300 shares of stock in the Clarence Saunders Corporation which was owned by the plaintiff and which was sold by the defendant without notice to the plaintiff; that defendant then filed with the Adjustment Bureau, assignee, a claim for $1,194.79 instead of a claim for the sum of $7,033.86 which would have included the sum for which the defendant sold the plaintiff's shares of stock and the amount of deposit to the plaintiff's credit which was applied by the bank as the second payment on the note.
The trial of the case resulted in a verdict for the plaintiff in the sum of $5,364. which on defendant's motion was set aside and a new trial ordered to which order the plaintiff took a writ of error as authorized by the statute.
Neither the declaration, pleas nor replication recited the terms or conditions contained in the promissory note relating to the bank's authority to sell the 300 shares of stock for the conversion of which this action was brought. The plea urges as a set off a sum remaining due upon the note after the application to it of the proceeds of the sale of the stock of which the plaintiff complains and makes it the basis of his action. In other words, the plaintiff says to the defendant: you converted my stock and you are therefore liable to me in damages. The defendant, by his plea says: I admit I converted your stock but I have applied the proceeds of the sale of it to a debt which you *Page 822 
owed to me and there still remains a balance due me of $836.36 and attorney's fees of one hundred fifty dollars for which I am asking judgment against you.
Assuming that the plea is admissible in an action of tort for the conversion of the property, it is an admission of the cause of action because a plea of set off cannot serve the double purpose of defense and a counterclaim. 19 Ency. Pl. and Prac. 768; 23 Stand. Ency. of Proc. 585.
A set off is merely a mode of defense whereby the defendant acknowledges the justice of the plaintiff's demand but on the other hand sets up a demand of his own to counter balance it, either in whole or in part. In this State however a defendant is permitted to plead both general denial and set off in the same action under a statute which permits the defendant to plead as many matters of fact as he may deem necessary to his defense. Sec. 4320 C. G. L.
The only question therefore presented to the jury was whether in the circumstances in which the defendant sold the stock it was guilty of a conversion of it, and if so the damages which the plaintiff sustained, against which the defendant might set off the amount due on the note.
On the theory of a wrongful conversion by the Bank of the stock pledged, we have failed to discover in the record any evidence of a value of the stock in excess of the amount realized for it by the Bank and applied on the plaintiff's debt to it. In the companion case to this decided at this term, Scott, appellant, versus The National City Bank and Adjustment Bureau, Tampa Association of Credit Men, Inc., the Court held that Scott was liable on the note to the Bank as surety upon the failure of the principal debtor, Scott Grocery Company, to pay. Therefore, to recover in this action the plaintiff was bound to show that the securities alleged to have been converted were of a market value greater than the amount credited upon the obligation *Page 823 
if, under the provisions of the note, the Bank did not have authority to sell the stock without notice to the plaintiff. There is no such evidence, consequently the verdict was wrong.
The note, as pointed out in the case above mentioned, contained provisions for the sale of the securities deposited without notice to the maker of the note. Whether those provisions constituted a waiver of the statute requiring notice it is unnecessary to determine in this case, because if they were not and the sale constituted a conversion there is no evidence to support the verdict in the sum rendered.
This case might have been tried by introducing the promissory note making proof of the sale of the stock by the Bank and the market value of the stock at the time of the sale of it by the Bank and a showing of the amount which the Bank had credited on the debt on account of such sale. If the trial court had held as it did that the provisions of the note amounted to a waiver by the plaintiff of the statutory provisions requiring notice of the sale of pledged stock to be given to the one pledging it, see Sec. 6931 C. G. L., 1927, an instructed verdict for the defendant on that issue would have followed and the cause would have been presented here solely upon that question of law. But that question is not necessary to be determined in this case because there is no evidence of value of the stock in excess of that for which it was sold.
For these reasons the order granting a new trial was not error and the same is affirmed.
BUFORD, C.J., AND BROWN, J., concur.
WHITFIELD, P.J., AND TERRELL AND DAVIS, J.J., concur in the opinion and judgment.
                          ON REHEARING.