122 N.Y.S. 369 | N.Y. App. Div. | 1910
Thése appeals were brought on and argued separately but, on the suggestion of counsel, we deemed it proper to withhold decision in
We are of. opinion that if" the plaintiff was entitled- to recover at all —and if this appeal be considered separately it'would have to be assumed that he was—he was entitled to recover both profits and
does not show that the counterclaim ivas litigated, because such judgment might have been recovered regardless of whether or not the counterclann was litigated. Nor was there any presumption that the counterclaim was litigated, arising on the mere, fact that it-was pleaded. The defendants were not obliged to plead it, arid by failing to do so they would not have waived it. They Could have omitted to plead .it and have maintained a separate action on it; and-after pleading it they were at liberty to abandon it without waiving it. (Honsinger v. Union Carriage & Gear Co., 175 N. Y. 229.) Where a cause of action, matter in defense or-counterclaim is once litigated on the merits iri a court of competent jurisdiction, whether decided properly ór otherwise, the judgment is a bar, .and whether the judgment be res ád/jndicata is to be decided on the record,' which, in the limited sense in which that term is here used, means the judgment roll-only showing the pleadings and judgment, provided ■ ; the judgment be such, in the light of the pleadings, that it necessarily.shows whether or not the cause of action, defense or counterclaim over which the question, arises was litigated; but.- if not, then it is incumbent on the party interposing the judgment asa bar to show the essential facts by the record of the proceedings on the trial or other parol evidence. (23 Cyc. 1132, 1136, 1215; Herman Estop. & Res. Adj. [2d ed.] §§ 267, 277-280; Smith v. Smith, 79 N. Y. 634; Carleton v. Lombard, Ayres & Co., 149 id. 137, 152; Patrick v. Shaffer, 94 id. 423 ; Adams v. Conover, 87 id. 422; McGuinty v.Herrick, 5 Wend. 240; Baker v. Stinchfield, 57 Maine, 363.) There were two appeals to this court in action No. 1; On the first appeal the opinion was expressed by the present presiding justice that the. action was on contract, but the question was not decided, by the court. (130 App. Div. 555.)' On the second appeal the judgment in favor of the plaintiff was reversed on the ground'
Counsel for the defendants made various requests to the court to instruct the jury, based on the theory that they were entitled to offset the indebtedness owing by the plaintiff to them in account No. 1, before it was reduced as already stated, against his claim in this action, all of which were refused, and exceptions were duly taken. Sufficient facts not having been presented to show that the counterclaim as an offset was barred, by the former judgment these rulings, were erroneous.
A new trial is pending in action No. 1, and inasmuch as there must be a new trial in this action, it is proper that we should now express an opinion for the aid and guidance of the trial court with respect to whether action No. 1, the pleadings in which are in this record, is to be regarded, as an action on contract or in tort and witli respect to the bearing of the judgment in that action on the issues herein.
on learning of said unauthorized sales and purchases, plaintiff dis-affirmed the. same and notified defendants that he did not acquiesce therein; ” that “ on account of ¿aid unauthorized purchases and sales, plaintiff sustained a loss of $10,880.25 [it appeared on the appeal in action No. 1 that these figures were- reduced by an amendment on the trial] ” ; that defendants’ commissions for buying and selling the stock and bonds would have been $137.5.0, and they would have been entitled to charge plaintiff about $275 interest, making in all ,$412.50 (it also appeared on the appeal inaction No. 1 that these figures were increased by an amendment on the trial); that-deducting said credit from said loss, “ there remains due to plaintiff from defendants ” the sum of $10,467.75, “ with interest thereon from May 5, 1906, which defendants have refused to pay on demand made and for which he demands judgment with costs.”
It will be seen that these allegations entirely omit the phrase- ■ ology customarily employed in an action for'conversion and contain no apt words to show that it was intended as an action for conversion, but appear to have been drafted to charge merely a breach of the special contract pleaded and resulting damages, and although the facts show a conversion, conversion is not charged.
If it were intended to charge conversion there .was no necessity for alleging a demand for the amount dué. It is not charged that the acts of the defendants were either wrongful or unlawful. Since an order of arrest may be-obtained in an action for conversion and a body execution will issue on the judgment, a complaint to be construed as in' conversion should, by appropriate language, charge that the acts were wrongful or unlawful'.as distinguished from a mere violation of contract rights, which is all that is charged here.
I think it is not very material, however, whether action No. 1 be deemed in tort or on contract, for in either view the counterclaim was properly interposed. Where a broker sells securities which he is carrying for a customer on a speculative account, the customer may either sue in conversion or waive the tort and sue for damages for a breach of contract (Stearns v. Marsh, 4 Den. 227; Baker v. Drake, 53 N. Y. 211, 213), and in either form of action the rule of damages is the same and the broker is entitled to the benefit of the highest price of the stock within a reasonable time after he receives notice or acquires knowledge of the sale. (Baker v. Drake, supra ; Wright v. Bank of Metropolis, 110 N. Y. 237, 246; Minor v. Beveridge, 141 id. 399,403; Burhorn v. Lockwood, 71 App. Div. 301, 303, and cases cited.) The broker could not question the right of the customer to the benefit of the price at which the securities are sold, whether with or without authority, and consequently it is assumed that the customer is entitled to the benefit of that price at least; but owing to the object of such a contract and to the fluctuating value of the securities the courts have deemed such ¡mee inadequate, and to fully compensate the customer have made an exception to the general rule that the recovery is limited to the actual market value of the property at the time of the conversion by holding that the customer is entitled to the benefit of the price at which he could have repurchased the stock within a reasonable time thereafter, and have visually stated that the measure of the customer’s damages for the wrongful conversion or breach of duty is the difference.Between the price at which the securities were sold and the market price within a reasonable time thereafter. (Baker v. Drake, 53 N. Y. 211; Colt v. Owens, 90 id. 368.) This statement of the rule manifestly is made on the assumption' that the broker has fully accounted to the customer for the price received
Thus it appears on the plaintiff’s appeal that if he be entitled to recover at all he was entitled to recover the items of profits and interest, and, on the other hand, the appeal of the defendants shows error to their prejudice. The plaintiff asks for a reversal and for a new trial unless we can amend the judgment by increasing the verdict by the items to which.reference has been made, which manifestly we cannot do, and the defendants also desire and apparently are entitled to a new trial. If the attorneys are desirous of having
We are of opinion, therefore, that a new trial should be granted,
.. with costs of the appeal to the party who shall ultimately succeed in the action.
Ingraham, P. J.,-Clarke and Scott, JJ;, concurred; Miller, J., ' in result. . _ - ...
Order-of September 15, 1909, affirmed; judgment and- Order denying motion for ■ new trial reversed and. new trial ordered, with costs of appeal to- the party who ultimately succeeds in the action-.