Sprague v. Currie

117 N.Y.S. 481 | N.Y. App. Div. | 1909

Scott, J.:

The defendants are stockbrokers and the plaintiff was their customer. The complaint shows that between January 22, 1907, and November 18, 1907, defendants bought and carried for plaintiff upon margin certain stocks, which they held as collateral security for the amount unpaid by her, and which they had advanced for such purchases, and which, on November .18, 1907, amounted to $8,815.95, and that on said date, at plaintiff’s request, defendants transferred and delivered said stocks and securities to another firm of stockbrokers upon payment to defendants of said sum of $8,815.95. These allegations, as we think, show an account stated-by defendants and accepted by plaintiff: She now seeks to open this account, alleging upon information and belief that at various times between said twenty-second day of January and the eighteenth day of November the defendants sold or converted to their own use some or all of the securities belonging to plaintiff, and thereafter, for the purpose of making delivery, repurchased or reacquired the same at lower prices, thereby making secret profits. This complaint is defective in two particulars. It is not alleged when the plaintiff discovered the irregular acts on the part of defendants upon which she bases her right to reopen the account stated. If she knew the facts when she accepted the account, or had information of them, her acceptance and payment without objection amounted to a ratification of the defendants’ acts. The complaint is also defective in that it charges, in the alternative, that defendants sold or converted to their own use certain of the securities. This allegation is entirely too vague and indefinite. The complaint shows that defendants were carrying plaintiff’s stocks on margin; that is. they had advanced for their purchase a considerable part of the price which plaintiff owed them and for which they held the stock as security. . Under these circumstances defendants were not obliged to keep, on hand the identical securities purchased for' plaintiff.' Their duty was to keep on hand, or under their control, either the securities of the plaintiff or a like kind and amount of securities, and to have them in such a position that plaintiff, by paying the amount diie from her, could at any time., obtain them. (Douglas v. Carpenter, 17 App. Div. 329, and cases cited;; Strickland v. Magoun, 119 id. 113.)

[ • The interlocutory judgment must be reversed and the demurrer sustained,, with costs in this court and the court below, with leave to plaintiff to amend within twenty days upon payment of costs.

Ingbaham, McLaughlin, Laughlin and Houghton, JJ, concurred.

Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend on payment of costs.