Fickinger v. Ives , 96 N.Y.S. 396 ( 1905 )

Laughlin, J.:

This, is an potion, by a,customer against, a.firm.of stockbrokers to recover damages.£or alleged unauthorized sales of stock. The plaintiff alleges that hatwéen.tlie 21th day of February and the 30th day of April, 1904, the defendants as has brdkers .and agents purchased certain shares of-stock upon margins; that he delivered to them as margins sixteen shares of stock of the Mechanics’ .'Kational Bank:; that they agreed to hold and carry the stock subject to "his direction as long as he should desire and not to sell or dispose-of the same unless his margins should be exhausted or insufficient and not then unless he should fail on request to take the stock and pay the balance owing thereon or give additional security, and in the event of his failure so to do they were to give him due notice of the time and place of sale; that at some time prior to the llth day of May, 1904, “ the date of which plaintiff is ignorant,” the defendants in violation .of their agreement, without calling on the plaintiff for additional margins or giving him an opportunity to fake up the stock and without giving him notice of the time or place of sale and without his knowledge or consent, “ sold or pretended to sell ” the stock purchased for him together with the stock advanced as margin, “ and misapplied the proceeds of said sale and converted the proceeds thereof to their own use; ” that the plaintiff has demanded a statement of the purchases and sales of stock made for him or on his account together with the names of the persons from whom the. stock was purchased and to whom sold, but that the defendants havei refused and still refuse to comply therewith. The defendants, im their answer admit that they purchased certain stock for the plaintiff during the period speciiied in the complaint and deny the other-material allegations of the complaint except that they aver that prior to the demand for an account they had furnished the plaintiff an account of the purchases and sales made by them for his account. For a second defense the defendants allege that they undertook to> purchase and carry the stock for the plaintiff in their own name-, in the customary way and for the usual commissions and that on the 30th day of April, 1904, the plaintiff was indebted to them for the "balance of the account in the sum of $2,720.41, and in the third separate defense they allege this as a counterclaim. On the application of the plaintiff the defendants furnished a bill of particulars, of their counterclaim which purports to embrace the entire account, of the stock dealings of the defendants in behalf o£ the plaintiff. The defendants subsequently upon the pleadings and upon their-own Mil of particulars moved for an order directing the plaintiff" to serve a bill of particulars of the complaint showing in detail what stocks of the plaintiff the defendants in violation of their agreement and without right oy authority sold and also how'his alleged damages of $15,000 was computed. The appeal is from the order denying this application.

The learned, counsel for the defendants contends that since they have given a bill of- particulars showing .the account of their transactions for the plaintiff, the plaintiff should • now • be compelled to irrevocably determine which of the sales, thus claimed to have been made by. them in their bill of particulars, he contends were unauthorized. This, it is urged, will narrow the issue and relieve the defendants of the necessity of preparing to show that all of the sales were authorized and of preparing to meet the question of damages concerning those sales which may have been authorized. It will-be observed that the transactions extended over á period of ■less than two and one-half months. There-should be little difficulty, therefore, in preparing to meet the question of damages as to unauthorized sales no matter when they occurred during that brief period- I do not, however, understand that thé court is authorized to order a bill of particulars for the reasons assigned. Whether the plaintiff should serve a bill of particulars of his complaint must be determined: by an examination of the complaint and does not in the least depend upon, the fact that the defendants have served a bill of particulars of a counterclaim contained in the answer. It might be useful and tend to simplify and shorten the trial of a cánse if the court were authorized by order to. require a plaintiff to specifically answer the items of a bill" of -particulars furnished by the defendant and admit in advance of the trial which die concedes to be correct and which he-controverts; bút I do not understand that there is any precedent or authority for such ■ practice: The plaintiff has

advanced money and property to the defendants, and the latter in their own -name, but as the agents and brokers of the plaintiff,"upon, the security of these advancements, have purchased and sold stocks for the plaintiff. In these circumstances the plaintiff, would be • entitled' to an accounting of their transactions in his behalf. The very nature-of the transactions shows that the plaintiff can have no! knowledge - except hearsay as to the actual transactions that the defendants have conducted. The plaintiff in such case must ordinarily rely on the admissions of the defendants or their books and records. It would be an extreme case indeed in which he would be able to show purchases and sales. on his behalf of. which they had'no record, and it is not clear how he could obtain evidence thereof. Where the plaintiff is entitled to ah accounting the defendant must file the account and it is not proper to require the .plaintiff to furnish a bill of particulars. (Heidenreich v. Hirsh, 85 App. Div. 319; Reed v. Marks, 56 id. 272; Belaseo v. Flaw, 96 id. 268). Of course this is not an action for an accounting. The plaintiff has reason to believe that the- defendants have wrongfully sold stock purchased and held for him and he brings the action for the damages. In such cases the plaintiff is ordinarily granted a bill of particulars and $n examination of the defendants arid an inspection of their books.- The plaintiff should not be compelled in a case like this to furnish a bill of particulars of the unauthorized sales. He shows by affidavit that he does not know what sales the defendants actually made and that he had reason to believe' that many included in the account are fictitious. . Until it. is known by an examination of the defendants or a discovery of their books just what purchases and sales were actually made, I think the plaintiff should not be required to admit or deny that a particular sale was authorized, even if the court could make such an order, for he may not be in a position to do so. 1 think the weight of authority is against requiring a plaintiff in an action of this Idnd to give a bill of particulars of the purchases and sales which he claims were unauthorized. (Messer v. Aaron, 101 App. Div. 169; American Transfer Co. v. Borgfeldt & Co., 99 id. 470; Cohn v. Baldwin, 74 Hun, 346; 26 N. Y. Supp. 457; Train v. Friedman, 4 Civ. Proc. Rep. 109; Young v. De Mott, 1 Barb. 30.)

It follows, therefore, that the order should be affirmed, with ten dollars costs and disbursements.

O’Bbien, P. J., Ingbaham, McLaughlin and Houghton, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.