245 Mass. 216 | Mass. | 1923
J. The plaintiff seeks to recover money paid by him to the defendants, who were stockbrokers, as margins for the purchase and sale of stocks. The case was referred to an auditor, and afterwards was heard before a judge of the Superior Court on the report of the auditor, interrogar tories propounded by the plaintiff to one of the defendants, and his answers thereto, and the “ confirmation slips.” The judge ruled that the plaintiff was entitled to recover and reported the case on the stipulation: “ If my ruling on the issue of liability is erroneous, there is to be a new trial, unless, as a matter of law, I should have ruled the plaintiff was not entitled to recover, in which event judgment is to be entered for the defendants. If my ruling on the issue of liability be correct, and if I have applied the correct measure of damages, judgment is to be entered for the plaintiff in the sum of $1,450, with interest from December 10, 1919. If my ruling on the measure of damages be erroneous and if the plaintiff is entitled to recover, there is to be a new trial on that issue under an agreement of the parties that the
The auditor’s report shows that the plaintiff made no claim that the transactions were illegal and did not seek to recover “ under statutes.” He relied on the second count of his declaration, this being on an account annexed for money paid.
The auditor found that the plaintiff paid the defendants $1,450, as set out in the declaration, and in October and November, 1919, gave them written orders to buy and sell different stocks dealt in on the New York Stock Exchange. The defendants were not members of that exchange but were members of the Boston Stock Exchange, and when orders were given with reference to the New York Stock Exchange they telephoned to a broker who was a member; and when the order was executed a confirmation slip was sent to the plaintiff in each case. At the time the account was opened the plaintiff was informed that the defendants were not members of the New York Stock Exchange and carried on their New York business through brokers who were members of that exchange. On each confirmation slip delivered -to the plaintiff the name of the New York broker by whom the transaction was carried out appeared in abbreviated form. It was stated in these slips, “ It is agreed between customer and undersigned brokers ” that all orders were to be performed subject to the rules and customs of the exchange and its clearing house, if any, where they were to be executed, “ with the distinct understanding that actual delivery is contemplated; ” that the security carried in the customer’s marginal account could be loaned or pledged by the broker, and that the broker could close the account by buying or selling at public or private sale, without further call or notice to the customer. Monthly accounts of all sales and purchases, showing stocks
In answer to Interrogatory 9, the defendant Albee answered, “ I am informed that the plaintiff was told that the defendants were members of the Boston Stock Exchange and correspondents of a New York Exchange firm, and that all transactions with the plaintiff would be executed on one or the other of these exchanges, and that no business would be transacted except in accordance with the rules of these exchanges and by the actual purchase and sale of securities.”
In the Superior Court the defendants offered to show the nature of each transaction executed through the New York Stock Exchange or through New York brokers dealing in odd lots, as described in the auditor’s report, with a view of establishing the actual loss sustained by the plaintiff. This offer was made upon the issue of damages and was rejected by the court. The defendants also offered to show that in all their transactions they acted in good faith and believed that all purchases and sales were executed by the New York brokers, members of the New York Stock Exchange, by the actual receipt and delivery of certificates for the number of shares bought or sold by the plaintiff. This offer was rejected.
The plaintiff does not contend that the transactions were illegal. He does not rely on the violation of the statute. He contends that actual purchases and sales were intended by both parties and actual deliveries contemplated; that the defendants failed to carry out this contract, and that the mere execution of orders according to New York Stock Exchange rules and customs was not an actual delivery and was in violation of the contract made with the plaintiff by the defendants. The findings of fact,by the auditor were that the contract of the parties provided that the plaintiff’s orders for the purchase and sale of stocks would be executed according to the customs and rules of the New York Stock
It was decided in Weisberg v. Hunt, 239 Mass. 190, where the stock gambling statute was not involved, that a valid contract for the sale and purchase of stocks could be made with reference and subject to the rules of the stock exchange; see Hall v. Paine, 224 Mass. 62, where it was said at page 73: “ Doubtless, when one employs another to trade for him in a particular market, he impliedly authorizes the dealings to be conducted according to the established usages of that particular market; ” see also Fiske v. Doucette, 206 Mass. 275, 282. In Weisberg v. Hunt, supra, the receipts given the plaintiff recited that “ all stocks bought or sold may be received or delivered through the Clearing House, according to the rules of the Exchange, and such a delivery shall be a good delivery.” The different phraseology in the confirmation slips in the case at bar, that all “ orders for the purchase or sale of any article are received and executed subject to the rules and customs of the Exchange . . . where they are executed, and with the distinct understanding that actual delivery is contemplated,” does not distinguish it from Weisberg v. Hunt. In each of these cases the rules of the stock exchange were to govern the sale and purchase of the stock. The execution of the contract and the delivery of the stock were to be according to the rules of the exchange.
The action is not brought under B. L. c. 99, § 4, St. 1919,
It is unnecessary, therefore, to consider the rulings of the trial judge on the question of the measure of damages and the rulings on the evidence offered to show the defendants’ good faith. According to the terms of the report, judgment is to be entered for the defendants.
So ordered.