DocketNumber： Docket No. 5
Citation Numbers： 172 Mich. 615
Judges： Beooke, Bied, Kuhn, McAlvay, Mooee, Osteandee, Steeee, Stone
Filed Date： 11/8/1912
Status： Precedential
Modified Date： 9/8/2022
The plaintiff was a physician in the city of Grand Haven, and the defendant conducted a stockbroker’s office in the city of Grand Rapids. For many years the plaintiff had been in the practice of purchasing stocks upon margins, and had dealt with various Chicago and Detroit brokers. In 1901 the plaintiff began to deal with the defendant in buying stocks upon margins, continued this for a time, and closed the account with a profit of about $1,600. He began dealing again with the defendant in May, 1906, by purchasing stocks upon margins, and in 1907, the defendant desiring to close out his brokerage business, Connor H. Smith took his place as a broker. The plaintiff was informed of this, and desired the defendant to continue the business for him, but consented to turn over to Mr. Smith the stock held on margins by the defendant, and also a balance of $1,837 then in the hands of O’Dell & Co., through whom the defendant dealt. There were also 500 shares of stock purchased for the plaintiff upon margins. These were turned in at the then market price and immediately repurchased by Smith, at the same price, for plaintiff. Thereafter the plaintiff continued to do business with Smith. Some time in 1908 Smith closed out the business, and the plaintiff at that time claims there was due him from Smith $2,500. Plaintiff assigned his claim to one Lamereaux, and suit was commenced against Smith, but subsequently a nonsuit was submitted to. Plaintiff took a reassignment of his claim from Lamereaux, and brought suit against the defendant in assumpsit by declaration with bill of particulars attached. The trial judge directed a verdict in favor of the defendant.
It is contended by the defendant that, having been elected mayor of the city of Grand Rapids in the winter and spring of 1907, he desired to close. out his stockbroker’s business, and that, after some negotiations, on May 4, 1907, he effected a complete settlement with the plaintiff of all business in his hands at that time and had no further business relations with him at ail.
“City oe Grand Rapids, Michigan.
“ Mayor’s Office,
“George E. Ellis.
“Stanley Jacowski,
“ Secretary.
“April-17, 1907.
“ Friend Vanderveen:
“As you know I retired from business December 31, 1906, and the accounts are all transferred to Connor Smith, excepting a few and I desire to transfer them. You can draw down all excepting two dollars per share which he requires for his protection. Kindly inform me by return mail so that I can transfer your account and balance to Connor Smith.
‘c Thanking you for past favors,
“Yours respectfully,
“George E. Ellis.”
“ Grand Haven, Michigan, April 18th, 1907.
“ Hon. George E. Ellis.
“Dear Sir:
“ Your letter received. I have felt perfectly safe with my stocks in your hands. That is the reason why I prefer to leave them with you, in hopes that in the near future I could get out and make up a part, at least, of my severe losses. But I presume you prefer to free yourself of this responsibility and would like to make this transfer to Mr. Connor Smith. He, of course, is a perfect stranger to me and I would like your candid opinion as to his credit and financial reputation. This I would treat as strictly confidential, but I would like to know in making the transfer does your commissions go with the stocks to Smith and will I settle with him for both the buying and selling when I close them out ? According to my receipts you are now holding money amounting to $6,463. Isn’t that right ? I have been obliged to make loans from bank here and would like to draw to make good some of that loan. When I receive your answer I shall run up first part of next week to see you.
“Yours truly,
“A. Vanderveen.”
*618 “ City of Grand Rapids, Michigan.
“Mayor’s Office.
“George E. Ellis.
* * Stanley Jacowski,
“ Secretary. “April 20, 1907.
c ‘Friend Vanderveen:
“Your credit balance inclusive of dividends, etc.* is correct, $6462.00. Connor Smith is all right and I believe him to be entirely honest and I think he is worth twenty thousand dollars. There will not be any charge for extra commission, and when you transfer you can draw all in excess of two dollars per share.
“Yours truly,
“ George E. Ellis.”
On May 4, 1907, the defendant sent the plaintiff a statement of account as follows:
Grand Rapids, May 4,1907.
Account Purchase and Sale of............
For account of Dr. A. Vanderveen.
By [and then the name “Connor H. Smith” has been scratched out, and “successor to” has been scratched out, and leaves] George E. Ellis, Morton House.
1906.
May 15 Bot. 100 O & W, 49$, Sold 38$...... $1,150 00
May 16 Credit of certificates of deposit................. $300 00
June 15 Bot. 100 O & W, 48$, Sold 38$..... 1,035 00
June 15 Bot. 100 G. W., 18, Sold 11$..................... 675 00
June 16 Credit by certificate of deposit................. 400 00
June 16 Credit interest........... 7 00
June 38 Credit by certificate of deposit................. 500 00
July 30 Credit dividend 3 per cent. 300 O & W.............. 400 00
December 3 Bot. 100 S. R., 84$, Sold 31$..................... 1,375 00
December 17 Bot. 100 Gas 96$. Sold 93$ 400 00
*619 1907.
Januaiy 17 Credit by certificate of deposit................. §1,200 00
January 31 Credit by certificate of deposit............ 1,000 00
February 15 Credit by dividend 100 gas 150 00
February 20 Credit by interest on certificate of deposit_______ 5 00
May 7 Credit by check.......... 800 00
May 15 Credit by check---------- ' 800 00
May 25 Credit by check__________ 1,000 00
May 4 Paid C. H. Smith, per instructions .............. 1,837 00
§6,462 00 §6,462 00
No question is made by the plaintiff as to the correctness of this statement, and it appears that all his transactions with the defendant up to this time were perfectly satisfactory to him, and he never made any complaint. It appears that the terms of the settlement were well understood by Vanderveen, and were assented to by him, and it was understood that their business relations were at an end. The testimony further shows that after May 4, 1907, the plaintiff did business entirely with Connor H. Smith. Memoranda of transactions between Vanderveen and Smith were introduced in evidence, all of them headed'as follows:
“Account purchase and sale of.....—
“Eor account of Dr. A. Vanderveen.
“By Connor H. Smith, successor to George E. Ellis, Morton House.”
During all this period the checks made out by Vanderveen in payment of these transactions were made payable to Connor H. Smith, and not to Ellis, and Vanderveen drew out from Smith $1,700. It seems to us that the transaction of May 4, 1907, terminated the liabilities of Ellis to , Vanderveen on that day, unless it was tainted with fraud. Plaintiff alleges fraud in a special count in his declaration, and the basis of his claim is the statement made by Ellis regarding the financial condition of Smith
For the reasons stated, the action of the court below in directing a verdict for the defendant is sustained.