105 N.Y.S. 775 | N.Y. App. Div. | 1907
Lead Opinion
This was an action by a customer against a firm of stockbrokers to recover damages for an unauthorized sale of a contract for.the delivery of cotton at a future date. Pending the appeal the original plaintiff died, and the action has been revived and continued in the name of this ancillary executor. . .
On the. 9th day of December, 1903, the defendants purchased for the plaintiff, on the Mew York Cotton Exchange, a contract for the delivery in the month of March thereafter Of 500 bales of cotton at 12.3 cents per pound. The plaintiff at that time owed the defendants a balance of account on former stock transactions. The plaintiff advanced $1,000 as margin on the new purchase, but the defendants, without authority, credited the $1,000 to the plaintiff’s existing account with them, thereby appropriating part of it to the payment of the old indebtedness. The next, day, December tenth, the market price of March cotton took a downward turn, and on wiring theplaintiff, who resided in Tuskegee,. Ala., for further margins, a'nd not receiving a remittance, they sold the contract at twelve and fifteen-one-hundredths cents per pound, upon the theory that plaintiff’s margin was exhausted, which would, have been the fact were they justified in thus appropriating part of the $1,000 to the payment of the old indebtedness, but otherwise not. The plaintiff had not conceded his liability for the balance of account claimed by'the defendants, and it is quite, clear that he advanced the money as margin on the new contract, and that the appropriation of part of it- by the defendants to the payment of his existing indebtedness to them was. unauthorized. The sale of the contract was, therefore, unauthorized. On the sanie day, and immediately after selling plaintiff’s contract, the defendants wired him : “Sold five hundred' March twelve fifteen on stop:” The defendants showed that plaintiff, in his former dealings with them, had directed them generally' to sell when" his margin was exhausted, and that the' stop order mentioned in the message, had reference to that .authority'.. Upon receiving notice of the sale plaintiff wired-defendants the same day: “ Replace cotton. I sent no order stop at twelve fifteen.” To this defendants, replied the same day : “ Too late. Your cotton was closed when margin exhausted as. per previous message.” Plaintiff replied to this message on the same day: “ 1 do not under
í! I cannot at all understand why you closed my March contract today. You bought at 12.30 and covered without instructions at 12.15. I had placed to your credit as margin $1,000. You wired you closed on stop. If you had any stop order from me there certainly is a grievous mistake, as' I sent none. You say margin was exhausted. I do not see how you arrived at this conclusion. The only way I can see that you decided margin was exhausted was that when you.received tliis $1,000 as margin on this contract yon appropriated a part of it to pay yourself a balance you claim against me. If this i's true, if you'did this, you did not notify me of it and left me under the impression I had $1,000 margin. You wired this morning for additional five hundred March, then quoted here at 12.19. I could seé no immediate necessity for sending it just then, but wired you on further decline ‘ Will send margin asked.’ A few minutes later next cqll here I saw March was 12.13. _ Immediately I had bank to wire you $500' additional margin.' After-•wards I received your telegram saying you .had sold five March at 12.15 on stop. Mow, gentlemen, is tills the manner to treat a customer?" Have you no regard whatever for his interest? I claim I hold a contract with you for five March bought at 12.30, and when the time comes I shall request you to cover the same.”
On the twelfth day of December the defendants replied to this letter* reiterating their claim that plaintiff had authorized them to sell when the margin was exhausted and asserting that they supposed that he intended to pay them the money he owed them and that they had acted in what they deemed to be his interest and closed the letter as follows : “ You treated us very, badly before, to say the least of. it, and we will thank you now to kindly place your business somewhere else in the future,” Two days later the plaintiff replied to this letter, insisting that defendants had not given
It follows that the judgment should be reversed and_.a new trial granted, with costs to the appellant to abide the event, unless the plaintiff shall- stipulate within ten days to reduce the recovery to- $875 and interest thereon, and if he shall so stipulate, the" judg
Ingraham and Scott, JJ., concurred; McLaughlin and'Clarke, JJ., dissented. .
Concurrence Opinion
Judgment reversed and new trial granted, with costs to appellant to abide event, unless plaintiff stipulate within ten days to' reduce recovery to $&75 and interest; in which event the judgment is modified accordingly, and as modified affirmed, without costs.
Dissenting Opinion
I dissent. Plaintiff was entitled to the benefit of his contract. He waited fourteen days, which, under the facts set forth, was not ail unreasonable time. He has recovered no more than he is entitled to, and for that reason the judgment and order1 appealed from should be affirmed. ■