Investors sue their stockbrokers at a drop of the Dow, but when a broker takes a customer to court -- it's a man-bites-dog situation. And if the broker wins $140,000 in punitive damages by accusing the customer of fraud, well, that's a story.

The broker in this tale is Voss & Co., the Fairfax County discount house, and the customer is a New Yorker named Stephen Smith who was once the Smith in Smith, Jackson & Co., Inc. stockbrokers.

Smith, according to Voss' lawyers, found a way to make money in the stockmarket without putting up any cash. Smith would pick a stock he thought was about to take a jump in price and place an order for it to be paid for when the shares were delivered a week later.

When the order was placed, Voss charged, Smith "either had no funds with which to pay for it or, in the alternative, he had no intention of paying for said stock except through the rise in price."

Smith placed an order with Voss & Co. for 3,000 shares of Interway Corp., at $36 a share. The stock was to be delivered to a New York bank, which was to pay the $108,000 purchase price from Smith's account.

But instead of going up, Interway dropped a couple of points. When Voss sent the stock to the bank, the bank turned it down, saying Smith had left no instructions about the stock and had no money to pay for it.

Following the rules of the New York Stock Exchange, Voss & Co. tried again to get its money from Smith, then liquidated the stock for 33 1/8 and 33 1/4 a share. Voss & Co. was out not only its $266 commission on the sale, but also $9,000 from the decline in value of the stock.

Many brokers might swallow the loss, but Voss sued Smith in Fairfax County Circuit Court and this month a jury ruled he was entitled not only to his commission and the money he lost on the transaction, but also to $140,000 in punitive damages.

The jury came in with the extraordinary verdict after Voss' attorneys piled up evidence to show the whole transaction was not just a misunderstanding. Smith himself had been a stockbroker and knew the rules, Voss complained.