#### Washington Ritter, plaintiff and respondent, *vs.*James S. Cushman *et al.*defendants and appellants.

1. Although the owner of stock may agree with a broker, that the latter may sell without notice, when stocks fall in price so that the margin does not cover the difference between current rates and the price paid, yet, in the absence of any such agreement, it would be a breach of good faith and common honesty to allow the owner’s property to be sacrificed, without giving him an opportunity to increase his margin and hold the stock for a favorable change in the market.

2. The rule that the report of a referee, like the verdict of a jury, in a case of conflicting evidence, is conclusive as to questions of fact, applies to the findings of a judge on the trial of an action.

(Before Robertson, Ch. J., and Barbour and Garvin, JJ.)

Heard January 16, 1867;

decided May —, 1867.

Appeal from a judgment entered at a special term, on a trial before the chief justice, without a jury.

The action was brought to recover a certain sum ($800) lent by the plaintiff to the defendants, and damages for *295the wrongful sale and conversion of two hundred shares of the stock of the Erie Railway Company, and of one hundred shares of the stock of the Michigan Southern and Northern Indiana Railroad Company.

In the summer of 1863, the plaintiff employed the defendants as partners and stockbrokers to purchase and sell stocks for him, and in the course of such dealings he deposited with them the sum of $4500 as security. On the 15th of March, 1864, they were indebted to him in $4662.50, on account of which they paid him $162.50 on that day. Between this date and the 18th of April, 1864, they bought and sold stocks for him; which transactions, in the aggregate, amounted to about $150,000. All of these transactions were approved by the plaintiff, except the sale by the defendants, on the 18th of April, 1864, of two hundred shares of the capital stock of the New York and Erie Railway Company, and one hundred shares of the capital stock of the Michigan Southern and Northern Indiana Railroad Company. These stocks had been purchased or held by the defendants for thé plaintiff upon an agreement to hold or “ carry ” them, retaining the plaintiff’s money in their hands as “ margin ” or security at pleasure of the plaintiff, while his security was ample. These sales (of April 18,1864,) were claimed to have been made without the authority or ratification of the plaintiff, and without any deficiency of security, and without any notice of time or place of sale, or of intention to sell. During the same month of April, 1864, the stocks were worth, in the market, a much larger sum than the sum for which they were sold by the defendants.

The plaintiff claimed to recover damages for the conversion of these stocks, at their market value, on the 25th of April, 1864, and to have his accounts with the defendants restated, giving him credit at the prices of April 25, in- ■ stead of the prices for which they were converted by the *296defendants. By this computation, the defendants were indebted to the plaintiff in $1961.24, for which he had judg ment, and the defendants appealed.'

*A. J. Perry,*for the appellants, defendants.

I. The main questions are of fact, and the defendants submit that the plaintiff has failed to prove that the defendants agreed “ to hold or carry said stocks for said plaintiff during his pleasure.” The only testimony upon that subject is by the plaintiff, and by his son, in which there is an entire failure to show any expressed or implied agreement to *hold or carry for*any time.

II. The defendants claim that they had authority to sell the stocks, and that the fact ought to be so found. That this authority was communicated to the defendants by Henry T. Hitter, the plaintiff’s son, who was the authorized agent of his father for the purpose.

HI. The defendants have proved that they offered to return the stocks to the plaintiff on the 19th or 20th of April, and also to return his money in their hands, but that he declined the offer.

IV. These facts being established, the judgment below should be reversed, and judgment of dismissal directed by this court.'

*Albert Mathews,*for the respondent, plaintiff.

I. The question of *fact*as to the unauthorized sale of the stocks, and all other questions of *fact*made by the defendants, rested upon *conflicting evidence,*and the decision of the judge at special term, is conclusive. *(Cohen*v. *Dupont,*1 *Sandf.*262. *Smith*v. *Tiffany,*36 *Barb.*25. *Hoogland*v. *Wight,*7 *Bosw.*394.)

H. The defendants having sold the stocks in question without authority, and converted the same to their own use, were liable in damages. *(Dykers*v. *Allen,*7 *Hill,*497. *297
      *Rankin*v. *McCullough,*12 *Barb.*103. *Andrews*v. *Clerke,*3*Bosw. 585. Wilson*v. *Little,*2 *Comst.*443. *Wilson*v. *Mathews,*24 Barb. 295. *Brass*v. *Worth,*40 id. 655.)

III- The proper rule of damages was applied at the trial, and the judgment should be affirmed, with costs. *(Cortelyou*v. *Lansing,*2 *Caines’ Cases,*200. West v. *Wentworth,*3 *Cowen,*82. *Dillenback*v. *Jerome,*7 id. 294. Kort*right*v. *Buffalo Com. Bank,*20 *Wend.*91. *Arnold v. Suffolk Bank,*27 *Barb.*424. *Romaine*v. Van *Allen,*26 N. Y. *Rep.*309. *Rawdon*v. *Barton,*4 *Texas Rep.*289. *Calvit*v. *McFadden,*13 id. 324. *Bank of Montgomery*v. *Reeve, Penn. Rep.*143. *Ewing*v. *Blount,*20 Ala. *Rep.*694. *Stilwell*v. *Meigs, MS. Supreme Court, June,*1866. Scott v. *Rogers,*31 N. Y. *Rep.*676. Blot v. *Boiceau,*3 *id.*82.)

*By the Court,*Garvin, J.

The principal objections, as presented upon the argument, and as I understand now to be insisted upon, are questions of fact.

The defendants insist: (1.) That the plaintiff failed to prove that the defendants agreed to hold and carry the stock, for the conversion of which this action is brought. (2.) That there is no proof of want, of authority to sell the stocks, but, on the contrary, the defendants claim there was evidence of authority to sell. The stocks so alleged to have been converted by the defendants were two hundred shares of the Erie Railway Company, and one hundred shares of the Michigan Southern and Northern Indiana Railroad Company.

The chief justice found in substance as follows: (1.) That the defendants made agreements with the plaintiff and his son, respecting the purchase and sale of stock and securities on account of the plaintiff. (2.) That, in pursuance of such agreements, the defendants purchased and held two hundred shares of Erie for the plaintiff, and that the remaining one hundred shares of Michigan Southern and *298Northern Indiana were transferred to the account of the plaintiff, and thereafter held by the defendants for him. (3.) That the defendants sold the whole three hundred shares without authority from, or notice to, the plaintiff, or any default on his part.

Upon the question of an agreement to carry the stock . for the plaintiff, both parties say there was an agreement so to do; but no length of time is proved. This cannot be necessary, there being no notice to the plaintiff that the margin was too small, or that the defendants felt insecure. Clearly, before any sale of the plaintiff’s stock was made, he should have had notice of the defendants’ intention to sell. Doubtless, parties may agree that the broker may sell without notice, when stocks fall in price so that the margin does not cover the difference between current rates and the price paid. But, in the absence of any such agreement, it would be a breach of good faith and common honesty to allow the plaintiff’s property to be sacrificed, without giving him an opportunity to increase his margin and hold the stock for a favorable change in the market. I know it is said that fluctuations in the stock market are so sudden and unexpected, that there is not time to give notice; but these abrupt transitions in the value of stocks are, and have been, well known for many, years, and should be provided for by brokers, and those with whom they deal. If no such provision is made, parties must abide by the rules of law. ■ We think the findings of fact are sustained' by the evidence. Much of the evidence is conflicting; especially upon the question of the unauthorized sale of the stock. This question of fact was passed upon by the judge who tried the case, and found for the plaintiff. His decision is conclusive—as much so as if found by the verdict of a jury. The rule stated by Judge Sandford is: “ Where there is testimony on either side sufficient to warrant a verdict,* if standing alone, we are *299not at liberty to overturn the verdict, for the reason that there was counter testimony on the other side, even if it be apparently equal in point of weight.” There must be a preponderance against the finding, so great as to show a case of mistake, passion or prejudice. (1 *Sandf.*262.)

Again, the report of a referee, like the verdict of a jury, in a case of conflicting evidence, is conclusive as to questions of fact. *(Hoogland et al.*v. *Wight, 7 Bosw.*394. *Davis*v. *Allen et al.*3 *Comst.*168.) I see no reason why the same rule should not be applied to the findings of a judge who takes the testimony, sees and hears the witnesses, and is quite as well able as a juiy or referee to come to a correct conclusion upon the facts. There is no question made upon the rule of damages adopted by the court.

It is, therefore, plain the stocks belonged to the plaintiff, and were sold without authority; that the defendants' converted them, and aré liable for the damages.

The judgment should be affirmed, with costs.