Waring v. Gaskill

• Decision Date: 08 April 1895
• Citation: 22 S.E. 659,95 Ga. 731
• Parties: WARING. v. GASKILL.
• Court: Georgia Supreme Court

22 S.E. 659

95 Ga. 731

WARING.

v.GASKILL.

Supreme Court of Georgia.

April 8, 1895.

Pledge—Sale of Collaterals—Conversion by Pledgee—Recoupment.

1. Where, in a promissory note, the payment of which was secured by the deposit of specified collaterals, it was stipulated that in case of the nonpayment of the note at maturity the payee might sell the collaterals alter giving at least 10 days' notice to the maker of the note, and the creditor sold the collaterals without giving such notice, the act of sale was a conversion; and especially so when the seller also became the purchaser of the securities.

2. Where a suit was brought for the recovery of the balance due upon the note after giving credit for tht net proceeds of the sale of the collaterals, it was the right of the defendant to plead in recoupment the conversion; and, in adjusting the account between the parties, he was entitled to credit for the actual value of the collaterals at the time of the sale. This defense could be made without demanding restitution of the collaterals, or tendering payment of the debt thereby secured.

(Syllabus by the Court.)

Error from city court of Cartersville; S. At-taway, Judge.

Action by C. R. Gaskill to the use of the Fourth National Bank of Chattanooga, Tenn., against George Waring. Judgment for plaintiff, and defendant brings error. Brought forward from last term. Code, §§ 4271a-4271c. Reversed.

The following is the official report:

Gaskill, cashier, suing for the use of the Fourth National Bank of Chattanooga, Tenn., by his declaration alleged: George H. Waring owes him $427 principal, besides interest and attorney's fees, evidenced by three promissory notes, copies of which are attached. These notes were executed and delivered by him to plaintiff, and for a valuable consideration. The first note is dated May 6, 1893, due 90 days from date, and is for $375; the second dated June 8, 1893, due 60 days thereafter, is for $75; and the third, dated June 14, 1893, due GO days after date, is for $200. Each note bears interest from maturity. The $375 note is credited with $231.57, of date of October 4, 1893. This is all that has ever been paid on any of the notes, and is the only credit defendant is entitled to. Defendant is justly indebted to petitioner 10 per cent, attorney's fees, because the consideration of the notes was and is a Tennessee contract. The notes were executed and delivered in Chattanooga, Tenn., and to be paid there. Payment was demanded of defendant after the notes became due at this place of payment, and he failed and refused to pay the same. In the notes, defendant contracted to pay reasonable attorney's fees incurred in the prosecution and collection of the notes, and under the laws of Tennessee such contract is binding and valid. Petitioner prayed judgment for principal and interest, and for his attorney's fees as aforesaid, which he alleged he had incurred in the collection of the notes. The $375 note, copy of which was attached, contained the following: "Having deposited or pledged as collateral security for the payment of this note certificates Nos. 1 and 2, Howard Hydraulic Cement Co. stock, two shares, $1,000 each, and hereby give the holder thereof full power and authority to sell or collect at my expense, including half of 1 per cent. for selling, and reasonable attorney's fees for service or advice, all or any portions thereof at said bank in the city of Chattanooga, at public or private sale, at his option, on the nonperformance of the above promise, and at any time thereafter, and without advertising the same or otherwise giving to me more than 10 days' notice. In case of public sale the owner may purchase without being liable to account for more than the net proceeds of such sale; and it is hereby agreed and understood that any excess of security upon this note shall be applicable to any...