8 Abb. N. Cas. 291 | New York City Court | 1879
Lead Opinion
The plaintiff’s letter and the defendant’s reply constitute the contract. The terms proposed and the money sent by her having been duly accepted, it only remained for the defendant to carry out the arrangement in good faith, and with reasonable
The care and skill due from the defendant was discussed at the trial.
That care and skill could be taxed only at the opening and at the close of this business. It is easy to see just where the skill would be useful. In view of his guarantee, the right to select the stock, properly • reserved by him, was conceded to him, as it required some knowledge of the history and condition of stocks; of the causes, often slight, by which they might be moved, and of the devious ways, plans and purposes, the contentions and combinations of those who controlled the stock market. So, too,
But it was claimed on the trial that directly after the making of the straddle contract, the defendant had another transaction with the plaintiff; that he sold on her account one hundred shares of stock short. It was not claimed that the plaintiff had given any order for that sale, or that any express authority for it could be found in the original contract. But it was claimed that the plaintiff had ratified the sale by her acquiescence. With that view an attempt was made to show that, directly after the sale of the one hundred shares short, the defendant had sent her a written notice of it by mail, and had received from her a reply. Her alleged reply was not in court, the letter having been lost. The plaintiff denied having received such notice of the sale, and also denied ever having sent an answer tó any such notice. Witnesses who were experts were then called to show that in the course of business brokers do and may make such short sales on the security of an existing straddle contract. They stated, in substance, that to do so would be operating, for the customer according to usage and custom. Other witnesses think that would be bad management. We are of opinion that the defendant, standing in the relations he did to the plaintiff, could not, without her knowledge or consent, under any usage or custom not known to her, or with respect to which she had not contracted, make the short sale on her account, and thus depart from and work out a modification of the arrangement. In this connection it may be said that, if consistent with the written contract, the usage or custom is useless; if not thus consistent, it is illegal and dangerous. It may be observed, also, that in the
The defendant’s letter, stating that he was short of the stock, and held Lake Shore at 62M as against her contract, and had obtained an extension, though, perhaps, sufficiently clear if written by one broker to another, was not so clear and explicit as to apprise one of the uninitiated of its whole meaning. It was not equivalent to saying: “Tour straddle contract and your one hundred shares Lake Shore sold short, using that contract as marginal security; I require protection, and though I have obtained an extension, it behooves you to determine what steps you will take or whether you will let both drift down the tide together.’ ’ She testifies that she did not understand his letter in the sense given to it by the learned counsel for the defendant; and her letter in reply, written at the time, tends to prove that she did not. It could not, therefore, be inferred from that correspondence that she knew the stock had been sold short on her account, or that she intended to ratify that sale. It has been justly said, Ratification is an act with knowledge, and must be unequivocal in
Concurrence Opinion
I concur. We agree that the complaint, so far as respects the statement of the original contract, should be conformed to the proofs and the finding of the jury, and it may now be so amended.