32 Ga. App. 281 | Ga. Ct. App. | 1924
M. M. Hall filed a trover suit against the First National Bank of Colquitt for the conversion of twenty bales of cotton which he deposited with the bank as security for a loan. Before the trial the bank went into the hands of a receiver, and J. B. Yann, the receiver, was made a party defendant in its stead. The case was submitted to the court and jury on an agreed statement of facts, upon which the court directed a verdict in favor of the defendant. The plaintiff has excepted to the overruling of his motion for a new trial.
The agreed statement was as follows: “On October 16, 1920, Hall gave the bank a note for $1,326.26, due January 4, 1921, and
The copy of the note referred to in the statement contained the following: “And to secure the prompt payment of this note, or any other indebtedness due or to become-due, the First National Bank, of Colquitt, Ga., or the holder of this note, I being possessed of the legal right and title to make said deposit, hereby pledges the following collateral and property which I affirm to be unincumbered: I hereby agree to pay 10 per cent, attorney’s fees if this note is given for collection, and it is agreed that other collateral of equal value may be substituted for the above with the consent of said First National Bank of Colquitt, Ga., or the holder of this note, which collateral when substituted shall be subject to this pledge. And I hereby constitute the president or cashier of the First National Bank, of Colquitt, Ga., or the holder of this note, jointly and severally my attorney or attorneys, to collect, sell, or otherwise dispose of the whole, or any portion of said ■collaterals, either at public or private sale and without notice to me of any intention to sell, either for the purpose of paying said note when due, or in ease margins shall not be furnished it when required. And I authorize the said First National Bank, of Colquitt, Ga., or the holder of this note to become the purchaser on its own account, at such sale, and for that purpose in my name to sign and execute any transfer, conveyance, or instrument in writing, whether under seal or otherwise, which may be necessary and lawful in the premises.”
As shown in the stipulation, “the bank sold the cotton without-the knowledge or consent” of the plaintiff. The defendant in error insists, however, that the bank was authorized to sell the cotton under the clause in the note set out above. No cotton or other collateral was described therein, and the note was in blank in so far as it related to collateral. Whether by parol the blank might have been supplied or the intention of the parties shown to include the property sued for is not now for decision. This was not done, and no power was given to the bank by the note upon its face to sell the cotton without a compliance with the Civil Code, § 3530, which provides: “The pawnee may sell the property re
This court held in Kennedy v. Dexter Banking Co., 29 Ga. App. 95 (113 S. E. 819), that “Where property has been pledged to secure a debt and is wrongfully sold by the pledgee, who nevertheless applies a part of the proceeds to the payment of the debt and tenders the balance to the pledgor as a settlement of their respective rights in the property, an acceptance by the pledgor of the sum tendered, with full knowledge at the time of all the facts, will be held a ratification of the sale, although such acceptance was under protest; the pledgee not having at the time agreed that such acceptance might be made without prejudice.” See to the same effect McElmurray v. Heard, 30 Ga. App. 677 (1) (119 S. E. 220). In Reynolds Banking Co. v. Neisler, 130 Ga. 789 (61 S. E. 828), the bank wrongfully converted the collateral which it held as security for certain notes of Neisler, and the proceeds thereof, which were credited, satisfied all the notes except one, upon which a balance remained due of $2.80. The bank immediately sent Neisler a full report of the sales and the application of the proceeds, returning all notes to him duly cancelled except the one left unsatisfied. About two weeks afterwards, when demand was made upon him for payment of the remaining $2.80, he complained for the first time that the cotton had been sold without his authority, but paid this small balance, and the note was surrendered to him. There was no effort then or afterwards to return the cancelled notes, but, after full notice of the sale and of the fact that the proceeds thereof had been applied to their satisfaction, he continued to hold them and instituted a suit in trover for the cotton. The Supreme Court held that under these facts a verdict for the plaintiff was unauthorized.
The case before us, however, is different from any of those cited. The plaintiff “swears that he did not know on June 6, 1921, when he gave the note for -$698.40, that said note included the balance” of $229.20 due on the note for $1,326.26, which the cotton had been pledged to secure and upon which the proceeds of the cotton
The conclusion is not demanded that the plaintiff ratified the sale because the note executed by him on June 6 included a balance of the larger note, which remained after the proceeds of the sale were credited, it appearing that the plaintiff may not have known of such fact. But the plaintiff admits that ho knew of the unauthorized sale of his cotton for two years before he brought the action for its recovery. What of his silence, or of his silence intermingled with‘his conduct and subsequent dealings with the bank, even though in reference as he thought, to a different matter ¶ Where property is pledged to secure a debt, and the debt is not paid at maturity, the pledgee becomes the agent of the pledgor in the sale of the property, and if he makes an authorized sale of it, it is the duty of the pledgor, as principal, to repudiate-the transaction in a reasonable time, as in other cases of principal and agent, or
Notice will be taken that cotton is a commodity of constantly fluctuating value. If the plaintiff had repudiated the transaction promptly upon its discovery, the defendant might have been able to protect itself. The pledgor knew that his note was past due and heard nothing from the bank about it, although it called upon him on June 6, 1921, to give renewals for other indebtedness. He had known then since April or May that the cotton had been sold. Did he not under these circumstances suppose that the bank’s failure to mention the larger note was because it was relying upon his approval of the sale of the cotton? He had a further transaction with the bank on September 17, 1921, when he paid the note of June 6, still without a reference to the cotton. The cotton was sold in January, 1921, for approximately 13 cents per pound. Never a complaint did he make until some two years thereafter when the price of cotton had advanced to 33-3/4 cents per pound, although in the meantime he had dealings with the bank, which would naturally have suggested some mention between them of the subject-matter of this suit, unless all was satisfactory on both sides.
While it is true that “whether or not . . ratification has resulted is usually a question of fact, to be determined by the jury” (Coursey v. Consolidated Naval Stores Co., 22 Ga. App. 538 (3),
The trial court ruled that the measure of the plaintiff’s damage should be the actual value of the property at the time of the sale. This was error. This action was in trover. In such a case the plaintiff pledgor, if he is not otherwise concluded, may, as in other trover cases, elect to recover the highest value of the property proved between the date of the conversion and the trial, subject to the condition that if at the time of the verdict he owed the defendant anything upon the debt which the cotton had been pledged to secure, this should be deducted. Van Arsdale v. Joiner, 44 Ga. 173 (4).
The court’s ruling as to the measure of damages would have been sound if the bank had sued the defendant upon the debt and he had sought to recoup for the conversion without alleging a special contract fixing the terms of the pledge. Waring v. Gaskill, 95 Ga. 731 (2) (22 S. E. 659); Harrell v. Citizens Banking Co., 111 Ga. 846 (1) (2) (36 S. E. 460); Campbell v. Redwine, 22 Ga. App. 455 (3) (96 S. E. 347); Kennedy v. Buckeye Cotton Oil Co., 29 Ga. App. 167, 172 (114 S. E. 79). But where the debtor takes the initiative and brings an action in trover, he is entitled to all the benefits of that character of action. Again, where the debtor is sued and sets up a conversion of collaterals by his creditor, by way of recoupment, and shows a special contract fixing the terms of the pledge, the measure of the damages which he may recoup will depend upon the nature of the agreement. These questions are more fully discussed in the case of Bennett v. Tucker, 32 Ga. App. 288 (123 S. E. 165), and in our decision in that case-will be found a statement of what we conceive to be the reasons for the propositions here stated upon the subject of damage. But the verdict directed for the defendant being demanded upon the theory of ratification, the error in the ruling on the measure of damages was harmless.
Judgment affirmed.