73 N.Y.S. 336 | N.Y. Sup. Ct. | 1901
I am satisfied from the evidence that, under the terms of Exhibit L, which bear date September 13, 1895, and. which must be read in connection with the original agreement between the parties, dated October 31, 1894, the plaintiffs had the right to require the defendants to keep and maintain in their hands a margin of at least 5 per cent, on the par value of any stocks, bonds or gold which they might have in their possession belonging to him. The criticism which is made by defendants’ counsel that the securities which were received and held under the agreement of renewal made on the 13th of September, 1895, at the time the five notes amounting to $228,330.60 were given, had not been.bought or sold by the plaintiffs, cannot be regarded as á just criticism for the reason that Exhibit L refers to all transactions which are open, as well as those into which the parties might enter, and it is not established by the evidence that there were any other transactions then open, between the parties. The testimony of the defendant that he knew of negotiations pending between the Tennessee Coal, Iron & Railroad .Company and the SIoss Iron & Steel Company, which might have the effect of raising the price of the former company’s stock, and that, he contemplated buying more of the shares of that company through' Inman, Swann & Co., and signed Exhibit L as an agreement to cover such purpose on the same day, but before the notes were given, is directly contradicted by Hr. Clark, and substantially by Hr. Swann, and, as the only transaction then open was the transaction represented by the notes .and the collateral which had been given in relation to them, I must hold as a matter of fact that Exhibit X related to it as well as to any transaction which might be. had between the parties in the future. It follows, therefore, that the plaintiffs' were entitled to sell the Tennessee Coal, Iron &
“ New York, December 14, 1895.
“ Messrs. Inman, Swann & Company,
“ New York:
“ Dear Sirs.— Referring to your loans made on 5,600 shares T. C. I. & R. R. Co. stock, you are hereby authorized to sell at your discretion 2,800 shares of the stock and apply proceeds towards the payment of the loan.
“ Yours truly,
“ Nathaniel Baxter, Jr.”
See Exhibit A, 11.
Here was a specific authority given to sell one-half of the stock, in addition to that which was contained in Exhibit L before referred to. It also appears that on the 14th of August, 1895, before the renewal notes were given, the defendant had authorized the plaintiffs to release 3,000 shares from the agreement of 1894, and to sell them in their discretion. This was not acted on by the plaintiffs; but the letter goes to show the relations which existed between the parties, and that Mr. Baxter understood that he was under great obligations to them for carrying the stock as long as they had. It is also valuable as showing his financial condition at that time and his inability to take up the loan through the instrumentality of other parties.
Upon all the evidence it seems to me that the defendant cannot assert that he has been injured by the action which the plaintiffs took in regard to the Tennessee stock. If his letters, of April 6, 1897, and June 28, 1897, are not to be regarded as an abandonment by him of the position that the plaintiffs had no? legal right to sell the stock, it is perfectly apparent that he-' cannot. claim that the plaintiffs should have done any more than buy back the stock for him at the price which prevailed when, as he claims, he first discovered that the sale had been improperly
So, too, in the case of Hopper v. Smith, 63 How. Pr. 34, the alleged wrongful sale of the receiver’s certificate took place in March, 1878, and although the demand was made in December, 1879, it does not appear when the plaintiff discovered that the certificate had been illegally sold.
None of these cases, as I understand them, go to the length of holding that a party can wait as long as he pleases after his dis
• It will be perceived from the statement of the prices intermediate October, 1897, and March, 1898, that the stock could have been replaced by the.plaintiffs at a small loss, if any, or even at a profit, if the defendants’ demand had been made upon them within a reasonable time — say, within six months after the sale. Then, if my view of the evidence is correct, it would have been the plaintiffs’ right to have immediately resold the stock, as there was no agreement upon their part to carry it for the defendant for any further time.
I think that it is a fair and just inference, from the testimony, that the defendant was unwilling to have the stock repurchased" unless the plaintiffs were willing to carry it for him without further margin than the securities which remained in their hands after the sale; and this I find the plaintiffs had, throughout the negotiations and in the interviews subsequent to the sale, steadily refused to do.
The error in crediting the 2,200 shares to the special account of John H. Inman is, I think, fairly and fully explained by the testimony of the plaintiffs, and the fact that the sales notes were made out by the brokers who made the sales in the name of John H. Inman is not inconsistent with the plaintiffs’ position, for the reason that when one broker employs another to make a sale for a customer of the former, I do not understand it is customary to reveal the name of such customer. The transaction is one between the employing and the acting broker.
Finally, I am of the opinion that the plaintiffs had a right to sell the stock which they held as collateral, under the agreement of September 13, 1895, Exhibit L, and as to one-half of said stock, under the special authority given by the letter of December 14, 1895, that even if such sales were unauthorized the defendant is not shown to have been damaged, for the reason that he did not offer to increase his margin if the stock should be repurchased, and the plaintiffs were under no obligation and made no promise to carry the stock for him in the absence of such increase; that when he was informed of the facts, in October, 1897, if he intended to insist that the sales in question were illegally made, he should have tendered the-amount which was due on the notes, principal and interest, within a reasonable time; and that the al
It is conceded by the defendants’ counsel that the only real dispute was as to the alleged sale-of 5,500 shares of the Tennessee stock, 10"0 shares being admitted to have been properly sold, and it is admitted by the -answer that on December 1, 1897, the amount due upon the notes, with interest, was $268,821.12. The amount realized from the sale of the stock, with interest to December 1, 1897, was $118,534.15, for which the plaintiffs credited the defendant, leaving the amount due to the plaintiffs oh that day the sum of $150,286.97, for which sum, with interest from that date, the defendants are indebted to the plaintiffs.
It is also conceded that the collaterals which were in the hands of the plaintiffs were pledged as collateral to certain obligations upon which the defendant Baxter was liable as the maker or indorser of certain promissory notes to the estate of John H. Inman.
The judgment will direct that the collaterals remaining in the hands of the plaintiffs be sold, and if, after paying their claim, any surplus remains, it must be applied in satisfaction of the amount due to the estate of John H. Inman.
Draw decision and judgment accordingly and settle on three days’ notice.
Judgment accordingly.