6 N.Y.S. 703 | N.Y. Sup. Ct. | 1889
The plaintiff sues as assignee of a firm of stock-brokers, Edward C. Fox & Co. The action is for damages sustained under these circum
Upon this state of facts we think the learned judge erred in taking the case from the jury, and dismissing the complaint. It is conceded that the case is to be treated as though Fox & Co. had purchased the stock from Fullerton. The principle is the same whether théy purchased or guarantied. In either case they are out of pocket the price of the stock. The payment under the guaranty was compulsory, and they were then subrogated to the worthless security. It also seems to be conceded that if Fox & Co. had originally availed themselves of the transfer clerk’s offer, and had had the stock transferred to their names on the books of the company, the latter would have been estopped. Such, at all events, was the decision of the circuit court (Wallace, J.) in Beach Co. v. Harned, 27 Fed. Rep. 484. There the purchase had been made without any previous inquiry of the company, yet the court held that it was estopped by issuing a new certificate. By that act “they not only reaffirmed the authenticity of the surrendered certificate, but recognized the defendants’ title to the shares, and thereby authorized the defendants to repose without further inquiry upon the validity of the title they had acquired.” And the court further held that the company was estopped by its subsequent negligence in not discovering the fraud and notifying the defendants in time to enable them to seek restitution from the swindler. Here the brokers made the fullest inquiry before the purchase, and the company recognized the title of the holder of the blank assignment, and authorized Fox & Co. to “repose without further inquiry” upon the validity of such title. The learned judge in the
In the light of these surrounding circumstances, Fox & Co. presented the certificate at the defendant’s general transfer office, and were informed, as already stated, that it was properly indorsed for transfer, and that the person in charge was willing to transfer it. The proximate cause of Fox & Co.’s injury was plainly this representation, coupled with the affirmation of the certificate. This was a reaffirmation of the validity of the certificate, of the reality of B. Bignell, and of the genuineness of the signature of that fictitious person to the transfer indorsed. It was made with full knowledge of the purpose of the inquiry, (namely, that the stock might be safely purchased,)
The authority of the person who made these representations is questioned, but the evidence on that head was certainly sufficient to go to the jury. Leslie v. Insurance Co., 63 N. Y. 34. And see Dunn v. Insurance Co., 19 Wkly. Dig 531. Indeed, there was testimony from which the presence of the defendant’s treasurer, Mr. Moulton, might have been inferred; and that it was he who answered the inquiry. Fullerton was the transfer clerk, and he acted under Mr. Moulton’s “supervision and inspection.” The defendant’s present secretary, Mr. McDonough, testified that at the time when the inquiry was made “there was no other employó of the Manhattan Beach Company in the office with Mr. Fullerton except the treasurer, Mr. Moulton.” But, even if it were not Mr. Moulton, the testimony was ample that it was at least an authorized person. Fox & Co. testified that this person was in charge of the office, and was in the regular employ of the defendant. When Fullerton was out this person was in his place, and he had personally transferred stock for Fox & Co., and had had transactions with their clerk in regard to the transfer of certificates. This evidence being sufficient to go to the jury, the questions which the plaintiff asked to submit should, under the principle of the Schuyler Case, 34 N. Y. 30, have been submitted; and, if answered in the affirmative, would have warranted a verdict for the amount received by Fox & Co. from the original purchaser,and paid over to Fullerton. The exceptions should therefore be sustained, and a new trial ordered, with costs to the plaintiff, to abide the event. All concur.