Gruman v. Smith , 12 Jones & S. 389 ( 1879 )

By the Court.—Curtis, Ch. J.—The

plaintiff’s assignors, Fitch & Co., purchased one hundred shares Rock Island R. R. stock for the defendant, on a margin, May 14, 1870, and carried the stock for him. Fitch & Co. called for more margin September 8, 1873, and the defendant paid them, September 10, 1873, $500 additional margin. Pitch & Co. called for more margin September 17, 1873, and not receiving it, three days after, sold the stock without notice to the defendant of the sale, and sent him an account showing a balance against him of $1,596.29, for which their assignee brings this suit. The defendant refused to accept the sale, and Pitch & Co. then offered to let the defendant have one hundred shares of the stock if he would pay them the balance claimed in their account.

This was a speculative purchase of stock, and the relation between Pitch & Co., the brokers, and the defendant, for whom they acted, was that of pledgee and pledgor. The defendant was entitled to notice of the time and place of sale, and the sale of the stock with an omission to give such notice, was an act of conversion on the part of the brokers, that debars their assignee from maintaining this action against the defendant. Nor was their position altered by their subsequent offer of stock to the defendant upon his paying them the balance claimed of $1,596.29 (Markham v. Jaudon, 41 N. Y. 235 ; Stenton v. Jerome, 54 Id. 480 ; Baker v. Drake, 66 Id. 518 ; Taussig v. Hart, 58 Id. 425). .

The judgment appealed from should be affirmed with costs.

Sedgwick and Freedmah, JJ., concurred.