Smith v. Hutton

Miller, J.:

This is an action to recover damages for the negligence of the defendants, stockbrokers of the city of New York, in failing to execute an order for the sale of stock. The defendants had pur- ' chased for the plaintiff 100 shares of Union Pacific stock. The plaintiff informed the defendants that he was going to Boston and was told by them that he might send any messages to them over the private wire of Paine, Webber & Co., stockbrokers of that city. He, went to Boston, and on March 2.5, 1907, the following telegraphic messages were interchanged between the parties to this ■ action over said wire:

(1)

“ Boston, Mar. 25, .1907. ■

“ Mr. DeYan.

“ E: F. Hutton & Co,, N. Y.

“ Msg. No, 1.

“ Pis. cancel stops and sell my Un. Pac. at 130f and Copper at 90J pis. confirm.

“ JOHN B. SMITH.’’

(2)

“Boston, Moh. 25, 1907.

“DeYan.

“ E. F. Hutton & Co.

“ Sell for my account and risk Make limits 129f- and 89f instead of former limits.

“JOHN B. SMITH.”

(3)

“3/25.

“E. E. Hutton & Co.

“ 33 & .35 New Street, New York.

“ De Yan Time 10 : 33

“What did you do ans qk.

“ 17 Co ' JAS. B. SMITH.”

(4)

“ Paine, Webber & Co.

“ 27 State Street.

“Private Wire.

“Co. Boston, Mar. 25, 1907.

“ J. B. Smith. ' •

“We did nothing you cancelled your stops please wire more, funds,

“DEYAN. '

“10 44ft,”

(5)

“b600 11 14a. ■ Boston, Afar. 25, 1907.

“John B. Smith. -

“Your limits now are 100 AGP 90f and 100. TJ. P. to sell at 130£ is this not correct yon cancelled stops.

“DEYAH.

“11 13a.-”

(6)

“■3/25

“ E. F. Hutton & Go., . f .

9-33 & 35 New Street, New York.

“ Time 1137 a. m.

“ DhYan

“Yon are wrong those were my first Lts wired 9.50 a.m. 2nd msg rec’d in H. Y. 957 gave Lts 129-J and 89§ Un Pac should have been sold An error was made. But not mine & I think you allow sale Ans qk.

“ J. B. SMITH.”

(?)

“ b9co Boston, Mar. 25, 1907.

“ J. B. Smith

“ We regarded all your telegrams in order they came to us. Your msg to make limits came right at opening and other one a minute or so later. The fault is the wire not ours, taking it up in meantime shall we change limits to 129^- and 89f ans qk.

“DEYAH

“ 12 06p ”

(8)

£70co • Time-3/25 1.32 p. m.

“ DeYan'

“ Close out the acct at discretion, but feel that I am justly entitled to sale of U P at 129 A ■

“ J. B. S'.”

(9)

“ Time, 2/28 p. m.

“ Devan -

“ Please mail statement of acct. to-night care Bright Sears & Co., Exchange Bldg. I assume you have closed out or will on this recovery,' please wire reply after 3. Am writing.

■ “J.B. S.”

The plaintiff, who understood telegraphy, testifiéd that he. heard No. 1 transmitted by the operator in the office of Paine, Webber ' '& Go., and ■ that he heard the New York operator “-0. K.” it at nine-fifty A, m., and that seven minutes later, to wit, at nine-fifty-seven, lie sent No. 2. The stock* market .opened in New York at ten o’clock. • Union Pacific did not sell as high as 130J on March twenty-fifth, but between ten and, ten-twenty-five a. m. there were a number of sales in lots, ranging from 100 to 1,200 shares, at prices varying from 129-J- to 130. Shortly, before the closing of the market, the defendants sold 100 shares for the account of the' plaintiff at 122|-.

On the -trial the defendants were at pains to explain the- receipt of the plaintiff’s telegram-authorizing them to close out his account at discretion, and in what manner they obeyed it, but they made iio. attempt to explain when or in what order telegrams 1 and 2 were received by them. They did produce, however, their copy of No; 1, and it bore a .significant erasure, to wit, the figures 95'9a in typewriting were erased, and in place of them the figures 1002a were inserted by pencil. . . '

The testimony of the plaintiff as to the.time when the messages were, sent and when .he heard the New York operator “ O. K.” them,'the omission of the defendants to .explain when and in what order the first two telegrams were received, and to account in any way for the failure to execute the order to sell at 129^, in connection'with the significant erasure on their copy of the first telegram, /justified the jury in finding that the messages were in fact delivered in the order in .which they were sent, and that the mistake occurred in the defendants’ offiqe. '

The learned trial court distinctly-charged the jury that they must find for the defendants in case they found, that telegram No. 1 was received by the defendants after the receipt off No. 2. The court also submitted to the jury as a question of fact whether the direction given to the plaintiff by' the defendants to communicate with them over the private wire of Paine, Webber & Co. constituted an adoption by the defendants off-that method of communication and thereby made the operator who sent the message the defendants’ agent. That was plainly erroneous. The information given the plaintiff that he could communicate with the defendants over the private wire of Paine, Webber & Co. no more constituted the latter the agents of the defendants than a direction to communicate by Postal Telegraph or Western Union would have done. However, the charge was not excepted to and it is difficult to see how the defendants could have been harmed by it in view of the explicit charge to find for the defendants in case Ho. 2 was received ahead of Ho. 1. Moreover, there is-no suggestion in the record that any mistake was made in the Boston office. It is of course barely possible that the. jury may have been confused by the charge, but counsel did not deem it of sufficient importance to except to it, and the error was peculiarly one which the court should have had an opportunity to correct.

The only other question requiring consideration is that arising upon the defendants’ claim of ratification. The court submitted to the jury as a question of fact whether the telegram of the plaintiff, directing the defendants to close out his account at discretion, constituted a ratification by him of the defendants’ failure to sell at 129£. It does not seem to me that that telegram is ambiguous. It was a positive direction to close out the account at discretion. If that direction was sent by the plaintiff with, full knowledge of all that had occurred, it seems to me that it was an adoption and ratification by him of the acts complained of. If he intended to stand upon his direction to sell at 129£ he had no business to give a direction to the defendants to sell for his account, because it was for the defendants to determine for themselves how best they could protect themselves. By giving that direction and thereby inducing the defendants to sell for his account, the plaintiff must be deemed, to have ratified what had previously occurred, provided he had full knowledge of it. (Buck v. Houghtaling, 110 App. Div. 52; Gillett v. Whiting, 141 N. Y. 71.) The mere fact that he coupled with a positive direction to sell a claim as to what he felt himself justly entitled to did not in any wise change the positive and unequivocal character of that direction. However, that telegram was sent in answer to a telegram of the defendants, assérting that they received message Ho. 1 after message Ho. 2, and were, therefore, not at fault. In order to find for the plaintiff under the instruction of the court the jury had to find that that statement was false. It cannot, therefore, be decided as a matter of law that the plaintiff’s direction, given in answer to that false statement, constituted a ratification of the defendants’ failure to sell, and it follows that . there is no exception in the record which requires a reversal of this judgment.

After a critical examination of the evidence, I am satisfied that the failure to execute the order, to sell at 129^- was the defendants’ fault, due perhaps to confusion in their office, caused by the condition of the market: Fo.r that reason the verdict is a just one, arid should not be disturbed. ■

The judgment and order "should be affirmed, with costs,

. Clarke and Scott, JJ\, concurred; Ingraham, P. J., and Laughlin,.J., dissented. '■