204 P. 248 | Cal. Ct. App. | 1921
Action for the alleged conversion by defendants of certain oil stock owned by plaintiff.
Plaintiff had judgment, from which defendants appeal.
It appears that at the times in question defendants were engaged in the business of stock brokers, having offices in both the city of Los Angeles and the city of New York; that prior to August 7, 1919, they had, in acting for plaintiff, bought and sold stock for his account, as a result of which he on August 7th had on deposit with defendants the sum of $850, at which time he gave to defendants, at their Los Angeles office, a written order to buy for him fifty shares of Mexican Petroleum stock at the market price; that this order, containing a provsion that "it is understood and agreed that all purchases and sales made by us for you are subject to the rules, regulations and customs of the Exchange or Board of Trade where order is executed," was given by plaintiff to defendants' telephone operator, who immediately transmitted the same by wire to defendants' New York office, which executed with the sellers, Carlisle, Mellick Company, who were New York stock brokers, a contract for the purchase at $181 per share; that the execution of the order in accordance with his instructions was promptly reported to plaintiff; that later, on the same day, defendants' manager, upon learning of the matter, notified plaintiff that the acceptance of the order was a mistake, for the reason that the margin deposited was insufficient to protect so large a deal, and demanded an additional deposit of $1,000, which plaintiff refused to make; that thereupon the manager told plaintiff they would sell the stock, and immediately, through defendants' New York office, sold the fifty shares of Mexican Petroleum stock at the then market price of $171 per share, which sale was made to the brokers through whom the purchase was made, namely, Carlisle, Mellick Company, notice of which fact was given to plaintiff on the morning of the following day; that the price of the stock continued to depreciate, reaching a price of $163 per *743 share on August 21st, and thereafter the market price advanced to $264 per share on October 2, 1919.
Plaintiff, claiming that, as provided in section
The court, upon sufficient evidence, found the action had been prosecuted with reasonable diligence, and, as prayed for, gave judgment for plaintiff, as provided in section
In support of the judgment the court found that at 12:30 o'clock P. M. on August 7, 1919, plaintiff was the owner of fifty shares of Mexican Pretroleum stock of the value of $9,050, which said shares were then in the possession of defendants; that on said day and at said time defendants wrongfully converted said shares of stock to their own use. Appellants' chief contention is that such findings are not supported by the evidence, for the reason that there is no evidence that plaintiff was the owner of the stock in question, or that the same was at any time in the possession of defendants.
[1] It appears from the undisputed evidence that plaintiff in writing stipulated that the purchase of the stock ordered should be subject to the rules, regulations, and customs of the stock exchange where the order was executed; that the purchase was made on the New York stock exchange, the rules, regulations, and customs of which provided that such contracts were not to be consummated until the day following that of the purchase, at which time the transaction was to be closed by the seller delivering the stock upon payment therefor by the purchaser. In accordance with these rules and customs, defendants as agents of plaintiff, on August 7th, entered into the contract with Carlisle, *744
Mellick Company, whereby the latter agreed that on August 8th they would deliver to defendants fifty shares of stock upon payment in cash therefor. Defendants, however, never paid for the stock, without which no title or right to possession was acquired. (Hilmer v. Hills,
The agreement made by defendants with Carlisle, Mellick
Company was an executory contract which, subject to the payment therefor, contemplated the delivery at a future time of the stock so agreed to be purchased. This payment was not made and the stock was never delivered, and hence, as defendants never acquired the stock or right thereto, they could not be guilty of its conversion. (Cardinell v. Bennett,
The judgment is reversed.
Conrey, P. J., and James, J., concurred.
A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on February 20, 1922.
All the Justices concurred, except Sloane, J., and Lennon, J., who were absent. *745