Case ID: ny-super-ct_44/html/0389-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Curtis, Ch. J.—The", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JEREMIAH B. GRUMAN, Assignee, &c., of HENRY FITCH, et al., Bankrupts, Plaintiff and Appellant, v. ISAAC T. SMITH, Defendant and Respondent.
    Conversion.—Sale of stock without notice.
    Plaintiff's assignors, who were stock brokers, purchased stock for defendant on a margin, and carried the same. Their request for more margin being disregarded, three days after making the same, they sold the stock without notice to defendant, which sale he refused to accept, and thereafter sent defendant an account showing a balance thereon against him, for which this action is brought.
    
      Held, that the relation between said brokers and defendant being that of pledgee and pledgor, the sale of the stock without notice to defendant was an act of conversion that debars plaintiff from maintaining this action.
    
      Also held, that a subsequent offer by said brokers of stock to replace that improperly sold, was nugatory (see cases cited in opinion).
    Before Curtis, Ch. J., Sedgwick and Freedman, JJ.
    
      Decided January 6, 1879.
    Appeal by the plaintiff from a judgment dismissing the complaint.
    The facts are stated in the opinion.
    
      Mr. Yan Wyck, for plaintiff.
    
      Geo. Putnam Smith, for defendant.
   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.