195 A.D. 452 | N.Y. App. Div. | 1921
Lead Opinion
This action was brought to recover the sum of $10,000 and interest, damages which the plaintiff claims to have suffered by reason of the. conversion by the defendants of 5,000 shares of stock of the Mines Holding Company, a Delaware corporation. The defendants are copartners doing business as stockbrokers in the city of New York and elsewhere under the firm name and style of Moore, Leonard & Lynch. The plaintiff is the president and treasurer of a weekly publication known as the New York Financial Examiner, published in the city of New York.
For many years prior to the occurrences involved in this action plaintiff had speculated extensively in stocks and securities. In his complaint the plaintiff alleges that in April, 1917, the defendants, as stockbrokers, agreed to and with the plaintiff to purchase for him 5,000 shares of stock of said Mines Holding Company, and that in consideration thereof the plaintiff agreed to pay the defendants therefor the purchase price of said stock, together with their commissions thereon. The plaintiff alleges that the defendants did, upon plaintiff’s order and pursuant to their agreement with the plaintiff, on or about April 30, 1917, purchase in the market for the account of the plaintiff 5,000 shares of the stock of said corporation at the price of $1.25 per share, and thereafter held the same as the stockbrokers and agents of the plaintiff and for his account; that at the time of employing the defendants to purchase said shares the plaintiff deposited with said defendants the sum of $1,100 and agreed to pay the
The defendants answered in the action denying generally the agreement alleged and set forth in plaintiff's complaint and the other allegations in plaintiff’s complaint with reference to the deposit by the plaintiff with the defendants of the $1,100 for the purposes set forth in the complaint, the purchase of the stock, its conversion, and that plaintiff has suffered the damages alleged and set forth in said complaint.
The defendants, as a separate defense, allege in their answer that on or about April 26, 1917, at the plaintiff’s request and upon his promise to pay therefor in full forthwith, together with a commission to the defendants as stockbrokers, and upon plaintiff’s deposit with the defendants of the sum of $600 on account of the purchase price thereof, the defendants agreed to buy for plaintiff 3,000 shares of the stock of said Mines Holding Company at $1.25 per share, or less, if the same could be bought in the market, it being expressly understood and agreed by and between the plaintiff and defendants that defendants would not carry the said stock on a margin for the plaintiff’s account, and that plaintiff would pay the defendants for the same in full, with the commission, when the same was bought. The defendants allege that on April 28, 1917, pursuant to said agreement, they bought 3,000 shares of the stock of said company at $1.25 per share. Defendants further allege that thereafter and on April 28,1917, at plaintiff’s request and on his promise to pay therefor in full forthwith, together with a commission to defendants as stockbrokers,
For a second separate defense the defendants allege, upon information and belief, that for a month or more following May 4, 1917, when they sold and disposed of said shares of stock upon the market, said stock could have been purchased at one dollar and twenty-five cents per share, and that at no time after said May 4, 1917, did the price of said stock in the market exceed the sum of one dollar and thirty-seven and one-half cents per share. The defendants further allege that a month or more after May 4, 1917, transactions in the market in the said stock ceased.
The issues raised by the pleadings coming on for trial, the parties stipulated in open court to try the case without a jury, and that the court might direct a verdict with the same force and effect as though a jury were present.
Upon the trial the plaintiff testified that he was in the city of Pittsburgh, Penn., where the defendants maintained a branch office; on April 26, 27 and 28,1917. It was stipulated upon the trial that on April twenty-sixth and twenty-seventh the plaintiff requested the defendants to purchase 5,000 shares of the stock of the Mines Holding Company, and that the defendants promised to do so upon receipt of $200 per 1,000 shares, and that plaintiff thereupon paid the defendants $1,100; that on April 28 or 30, 1917, the defendants purchased for the plaintiff said 5,000 shares of stock at $1.25 per share, or a total of $6,250; that for that service the defendants charged the plaintiff a commission of one-thirty-second of $1 a share, or a total commission of $156.50. It was further stipulated that on May 3, 1917, the defendants telegraphed from their Pittsburgh office to plaintiff at Detroit, as follows:
“ 5;50 p. m., Pittsburgh, Pennsylvania. May 3rd, 1917.
Thereupon, in the cotuse of the trial, the defendants made certain admissions to the effect that plaintiff, on or about April 27 and 28, 1917, had employed the defendants to purchase for him 5,000 shares of the Mines Holding Company stock, depositing with the defendants the sum of $1,100 on account thereof, and that pursuant to such employment the defendants did purchase for plaintiff’s account said 5,000 shares of said stock, paying therefor at the rate of $1.25 per share, and charging the plaintiff therefor the sum of $6,250 together with their commission, amounting to $156.50, and that on April 28, 1917, the defendants gave to plaintiff a statement to that effect, crediting plaintiff with the payment of $1,100 on account thereof.
With reference to the transaction between the parties, the plaintiff testified that he went to the Pittsburgh office of the defendants on April 26, 1917, and solicited a subscription for his periodical, and that defendants’ representative there, a man by the name of Lamb, subscribed for said periodical, paying plaintiff $2 therefor. Plaintiff testified that he then told Lamb, defendants’ representative, that he wanted to buy a few thousand shares of Mines Holding, and gave Lamb an order that day to purchase 3,000 shares of said stock and paid Lamb $600 upon account. Plaintiff further testified that there was conversation between himself and Lamb as to when he would pay the balance of the purchase price of said stock, and that the plaintiff said: “ When you have received the stock I will pay for it. It will take about ten days before you get that stock, and I will notify you if I happen to come back to Pittsburgh in the meantime.” Plaintiff testified that he told Lamb he would be there and come and see them, or that they might notify his New York office, and that he could pay them either at the office in Pittsburgh or in their office in New York, which was just across Broadway from
“ Your, telegram received. You failed to pay for stock pursuant to your promise two days ago and still fail to place Pittsburgh or New York office in funds. Have sold four thousand shares at one and three-eighths and one thousand at one and five-sixteenths.”
The plaintiff testified that he at once returned to New York, reaching the latter city on May sixth, and that he immediately
“ New York, May 8, 1917.
“ Mr. I. M. Jacobs,
“ 7 Pine Street,
“ New York, N. Y.:
“ Dear Sir.— Enclosed you will find check for $1342.98, closing out your account with us. 4000 shares were sold at 1-3 /8 and 1.00 shares at 1-5 /16. There is an interest charge of $5.52, and we have charged you 1 /32 for buying and 1 /32 for selling the stock.
“ Yours very truly,
“ EWL-L. MOORE, LEONARD & LYNCH.”
That inclosed in said letter was the check for $1,342.98 therein referred to. Plaintiff further admitted that he had indorsed said check by writing his name upon the back thereof. The evidence shows that the plaintiff received said check without objection, and cashed the same, and retained the proceeds thereof.
Owing to the illness of the wife of defendants’ Pennsylvania manager, Mr. William J. Lamb, the latter was unable to be present upon the trial as a witness, and upon stipulation of the parties it was agreed that if said Lamb were present he would testify that the plaintiff came to the defendants’ Pittsburgh office on April 26, 1917, and asked Lamb if the defendants would buy 3,000 shares of the stock of the Mines Holding Company on the New York curb and carry it for him on margin; that Lamb replied that the defendants would not carry the stock, as they made it a general custom not to carry stocks on margin which were only dealt in on the New York curb, and that plaintiff then asked him how much the defendants would want by way of deposit against ordering 3,000 shares of the stock for him, and that Mr. Lamb replied that they would
“ Moore, Leonard & Lynch,
“ Pittsburgh, Pa.:
“ Under no circumstances sell stock, ship draft attached New York office. I. M. JACOBS.”
That later in the day Lamb talked with plaintiff over the long distance telephone in Detroit, and that plaintiff in his conversation demanded that defendants buy back the stock and stated that if defendants did not do so he would put the matter in the hands of attorneys; that plaintiff then for the first time informed Lamb that he had an office at 7 Pine street, New York city; and stated that he would be prepared to pay in full for the stock Monday, May 7, 1917, that Lamb stated to plaintiff that the stock had already been sold; that on May 7, 1917, the defendants received at their office in Pittsburgh a letter from plaintiff, dated May 6, 1917. In said letter the plaintiff expressed surprise at the sale of the 5,000 shares of Mines Holding stock bought through the defendants, and charging the defendants with illegal action in respect to such sale, and advising defendants to buy in said stock for cash for immediate delivery and avoid further damages and loss, and also stating that charges might be brought against them before the committee of the New York Stock Exchange for misconduct. In this letter the plaintiff also suggests that he might tell certain New York newspapers of the transaction, to defendants’ disadvantage, and makes other suggestions of a threatening nature.
At the close of the testimony, the court, it seems to me, contrary to the weight of the evidence, held with the plaintiff that there had been a conversion by the defendants of plaintiff’s stock, but that it was plaintiff’s duty to make defendants’ loss as small as possible, and requested that the attorneys submit a computation as to the value of said stock at five, ten, fifteen, twenty, twenty-five and thirty days after the same was converted by the defendants, the court holding, in effect, that it was the duty of the plaintiff to lessen the loss and to go into the market and purchase the stock in order to lessen the damages suffered. Thereafter the court directed a verdict in favor of the plaintiff for $492.83. It is impossible to learn from the record the basis whereby the court arrived at the amount for which said verdict was directed. So far as I have been able to discover, there is no basis in the evidence upon which the learned court could have properly directed the verdict which it did.
Both sides appealed from the judgment entered upon such directed verdict, the plaintiff claiming that the amount awarded him was inadequate, and the defendants contend
It seems to me that under the facts presented by the evidence upon the trial the court improperly denied the defendants’ motion to dismiss the complaint upon the ground that in accepting defendants’ check for $1,342.98 and cashing the same and in retaining the proceeds thereof, the plaintiff clearly ratified the sale of his stock by the defendants. The court has held that the defendants converted plaintiff’s 5,000 shares of stock. The plaintiff finally claimed as damages a balance of $3,345.25, besides interest thereon from May 4, 1917, whereas, the defendants insisted that in accordance with the statement which they furnished the plaintiff the transaction showed there was due plaintiff from the defendants thereon a balance of $1,342.98, a net profit in the transaction to. plaintiff of $242.98. Under these circumstances, the parties claiming as above stated, the defendants delivered to the plaintiff their check upon his unliquidated claim for $1,342.98. This check was accepted and retained by the plaintiff, and I think was a complete ratification by him of the defendants’ acts as his agents, and that he cannot afterward be heard to dispute the same or to repudiate his agents’ acts. The action was not upon contract, nor were the damages which the plaintiff suffered liquidated, and I think plaintiff’s acceptance of defendants’ offer in full settlement of this unliquidated claim, together with the statement of the transaction in connection with defendants’ purchase of said shares of stock, and the retention by the plaintiff of the moneys paid him, acted as a ratification by the plaintiff of the defendants’ acts.
I am, therefore, of the opinion that the trial court committed error in denying defendants’ motion for a nonsuit and a dismissal of the complaint at the close of the evidence. The judgment of the Trial Term should be reversed upon defendants’ appeal, with costs to the defendants, appellants, against the plaintiff, appellant, and the complaint dismissed, with costs. This disposes of plaintiff’s appeal from the judgment for inadequacy of the verdict, but we do not allow costs to the defendants, appellants, upon plaintiff’s appeal.
Clarke, P. J., Laughlin and Smith, JJ., concur.
Concurrence Opinion
I concur in the opinion of Mr. Justice Merrell that the decision of the trial justice was contrary to the weight of the evidence, in holding that the defendants converted the stock of the plaintiff. In my opinion the plaintiff failed to establish by a preponderance of the evidence that the defendants agreed to carry the stock for him until a transfer thereof should be made on the books of the company and the certificates of stock so transferred should be received by the defendants. On the contrary, in my opinion the evidence on behalf of the defendants shows that the plaintiff promised to pay the balance due on or before Wednesday, May 2, 1917, and on plaintiff’s failure the defendants had the right to sell the stock to satisfy their lien for the moneys" advanced. The trial justice should have directed a verdict for the defendants.
In my opinion the court would not have been justified in dismissing the complaint upon the ground that in accepting the defendants’ check for $1,342.98, cashing the same and retaining the proceeds thereof, the plaintiff ratified the sale of his stock by- the defendants.
The action was for a conversion. The conversion would be complete if the defendants made an illegal sale of plaintiff’s property, and plaintiff became entitled to his damages, which would be the full value of the property. A subsequent return of the property, or the turning over of the proceeds of the sale thereof, would only go to the mitigation of the damages and not to the defeat of the cause of action. (People v. Bank of North America, 75 N. Y. 547, 564.)
Judgment reversed, with costs to defendants, and complaint dismissed, with costs.