Security Investment Co. v. Bieg-Hoffine Co.

TURRENTINE, J.,

pro tem.

The facts material to the determination of this appeal are as follows: Plaintiff! held notes of the defendant for money loaned (capital advance) to defendant and also held certain corporate stock of defendants pledged to plaintiff as security for the payment of the notes. Claiming the notes to be due and unpaid, plaintiff sold the stock pledged to it as pledgee and instituted this action to recover the balance due on the notes. The notes were not due and the pledgee’s sale was void. Defendant filed a pleading called a “cross-complaint and counterclaim” to recover damages for the conversion of the stock. Plaintiff admits the conversion of the stock. The trial court found that the value of the stock at the time of conversion was $120,771.67, and that the indebtedness of defendant to plaintiff when this action was commenced on the notes and the debts secured by the pledge of the stock sold was “approximately $100,000.00.” Judgment was made and entered for the defendant on the complaint and answer and for the defendant on the cross-complaint and counterclaim against plaintiff for $119,330.25 (being the value of the stock less an offset of $1441.42 allowed by the court). Plaintiff did not appeal from that portion of the judgment against it on the complaint and the answer thereto, but prosecutes this appeal from the judgment against it for $119,330.25 on the cross-complaint and counterclaim. The notes above referred to were introduced in evidence with evidence of the amount of the unpaid indebtedness thereon. The appeal is on the judgment-roll.

[227]

The only attack on the judgment is that the trial court applied the wrong measure of damages. We ■ think this contention must be sustained. The measure of damages, where a pledgor of property sues the pledgee for conversion and prevails, is the value of the pledged property at the time of conversion, less the indebtedness owed by the pledgor to the pledgee on the obligations for which the property converted was pledged.

Gay

v.

Moss,

34 Cal. 125, was an action to recover the value of a certain contract alleged to have been converted by the defendant. On page 132 the court says: