The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-12-18
LEGAL OEclsuN-mpoaTAN1 TO COLD BROKERS.

An important decision regarding tho liability OF brokers
who purchase gold for spectators depositing Margin
has after three weeks trial in which the abest
sci was employed, been made in Baltimore.
In or about October, 1884, named Boyle en-
poyed Thomas T Carson, broker and banker Of high
ried on margin for Boyle On the 10th OF November,
1904 Carson reported Boe that no had purchased for
him by II. u, brokers in New York. 81, 600 American
gold con ut the rate OF 262 Al the time Of the agree
mont and a. subsequent sales Boyle deposited with
Carson gold coin 10 serve as margins and after is
road bonds In April 1865 Carson made another requ-
glt0n for additional margin, which not responded
He therefore CAUSED : sale % be made q
Boyle, and no returned "a account Of salcs
thereof to Nrk Boyle Al one hundred and fifty,
showing loss therefore, the speculation Of shout
one hundred In the summer q 1906 Mrs Boyle being
advised that she had been bay used by Carson brought
her action IN the Superior Court q Baltimore city TO
deposited with HIM by her deceased husband IN his life
time and by her executrix since his DEATH At the
trial Of the action the plaintiff exhibited copy Of the
general account current between Carson and H. H..
bis New York agents. from which II appeared that the
With ns ~
gold ordered 70 be purchased and BY charging him with
the value thereof In paper money AL the dealings DO
tween these parties (which very extensively were
carried into this general account, and that In Decen
ber 1884, all the gold which had been purchased
for account Of Carson had been sold out, and
he had become .short' TO a considerable sum On
the part of the defence IL shown that by
carrying gofd margin Is intended that the broker
who for hts customer advances the purchase
money pay for tho gold and takes into his posses
son and thereafter that gold his own selling or
hypothecating or lending out or otherwise dsposnr
o. AS his coDvenience may require and that he fus
his obligation his customer by having hand hold
ing himself able aud ready to deliver an equi
amount In gold whenever his customer shall demand 10
and TO settle his account
witnesses ON part OF the defence proved such 20 be
the general usage in New York and Baltimore. Other
witnesscs produced on the part Of palntin declared
their ignorance OF the existence OF any such general
usage. According TO their testimony, conservative
houses OF merit retained the gold which they pr
chssed their customers. At the same time they had
reason believe that other houses of good credit
more enterprise acted upon different principle. II
further shown that where one broker purchased
for customer through the agency Of another broker
the agent broker deals with the broker giving the order
lis principal. The entries connected with the execn
ton Of the order 90 into general account between the
two brokers, and the gold purchased is held by the
broker making tho purchase security for balance
which may be due I, him on general account
On this outline of facts Judge Martin instructed the
juy-I That by the general law Carson was bound to
have paid the purchase for the gold purchased
for account OF Bosle and TO have taken that gold into
hs possession and that unless he could show that
by special agreement between himself and Boyle the
money was IL remain In the hands Of his agent In New
York. subject 10 their lien Tor the money expended
In the purchase thereof, and for any balance which
might appear TO DO due general account the execu
trx Of Boyle had right to repudate the purchase and
10 claim return OF the margins, Of the values ~ the
respective times OF their deposit That by the gen.
era law and Independent OF any special usage broker
other factor bound TO retain possession OF the thing
purchased for account Of hs principal In the case Of
gold coin, which has in itself nothing TO distinguish It's
value from other gold coin OF like denomination, the
broker fus his duty by keeping hand, clear OF all
other contracts amount Of gold coin OF equivalent
value TO that which purchased. Hence n Carson
had taken into his actual possession the gold coin which
he had oetenbly purchased for Boyle, and had subee
quenty appropriated tho same TO his use. the plain
tiff would be entitled 70 recover, unless Carson could
show the existence OF usage uniform, definite, gone
raj and well known which authorized broker 70 sell
otherwise appropriate gold coin which he had
purchased FOR account Of his customer
The jury under these instructions found . verdict
for the plaintiff for the full value OF her demand.