75 N.Y.S. 828 | N.Y. App. Div. | 1902
The action is brought to recover damages for an unauthorized sale of stock. The appellants were stockbrokers, and on the 3d day of April, 1899, pursuant to an order from respondent, they purchased on his account 100 shares of stock known as Federal Steel at seventy-four per cent or for $7,400, which, with the exception of $800 received from the respondent, the appellants advanced. The brokers also received from the respondent $250 on April fifth, the same amount-on April sixth, and $1,452 on April eleventh. On the thirteenth of May thereafter, during the panic following the death
The first contention on the part of the appellants is that the respondent acquiesced in or ratified the sale and, therefore, was not entitled to recover. After the sale, but on the same day, the respondent was informed of- it by a telephonic message from appellants’ office. The respondent thereupon asked to talk with appellant Kelly, who came to the phone and was asked by respondent why he was sold out, to which Kelly responded that it was on the order of one Peters. The respondent then informed Kelly that Peters had no authority to sell him out and asked why he was not called On for more-margin and if they thought he was not good for the margin, to which Kelly replied that he did not think so and in those particularly turbulent times there was no time to call upon him and they had to protect themselves. On the evening of that day appellants mailed to respondent a statement of the sale showing that it had been made “ on stop order given by D. S. Peters.” This statement was retained by respondent without further communication with appellants until October 21, 1899, when he made a written demand upon them for $1,587.50 damages for breach of contract to purchase and carry the stock. Subsequently, and on the 26th day of October, 1899, he commenced this action.
Since no rights of third parties intervened, ratification depends upon whether there was an intention to approve the unauthorized sale. (Hopkins v. Clark, 7 App. Div. 207, 213; affd., 158 N. Y. 299.) Having distinctly informed the appellants that the sale was unauthorized it cannot be said as matter of law that he was obliged to return the account of sale subsequently received and that for his failure so to do he is to be deemed to liáve acquiesced in or ratified the unauthorized sale. (Minshall v. Arthur, 2 Hun, 662; Stenton v. Jerome, 54 N. Y. 480; Quincey v. White, 63 id. 370 ; Merritt v. Bissell, 155 id. 396.)
The only other question presented by the appeal relates to the measure of damages. The plaintiff has recovered the difference between the price at which the stock was wrongfully sold and sixty-six and one-half per cent of its face value, that being the maximum
Cases of this nature have frequently been before the courts, and the rule is now well settled that where an unauthorized sale of stock of a fluctuating value is made by brokers, the customer may recover as damages the difference between the price at which the stock was wrongfully sold and the highest market price at which like stock was sold in the open market within a reasonable time. thereafter. (Wright v. Bank of Metropolis, 110 N. Y. 237; Griggs v. Day, 158 id. 1; Baker v. Drake, 53 id. 211; S. C., 66 id. 518 ; Scott v. Rogers, 31 id. 676 ; Hoyt v. Fuller, 104 Fed. Rep. 192.) This is an exception to the ordinary rule that for the wrongful conversion of personal property the damage recoverable by the owner is its
The respondent resided in the city of New York and was here at the time. No other facts or circumstances are shown which aid in the determination of the question. In the absence of evidence of special circumstances showing other elements of necessity for further time, we think it may be stated as a general rule that -the customer is entitled to a reasonable opportunity to consult counsel, to employ other brokers and to watch the market for the purpose of determining whether it is advisable to purchase on a particular day or when the stock reaches a particular quotation, and to raise funds if he decide to repurchase. Doubtless the customer’s financial ability
It follows, therefore, that the judgment should be reversed and a new trial granted, with costs to appellants to abide the event, unless the respondent shall stipulate to reduce the recovery by the difference between the price of the stock at sixty-six and a half and at sixty-two and seven-eighths, together with interest thereon from the time of the recovery, and in the event of such stipulation being filed, the .judgment as so modified should be affirmed, with costs to appellants.
Yah Brunt, P: J., Patterson and O’Brien, JJ., concurred.
Judgment reversed and new trial granted, with costs to appellants to abide event, unless respondent stipulates to reduce judgment as ■stated iti. opinion ; in which event judgment as so modified affirmed, with costs to appellants.