Case Name: POST et al. v. THOMAS et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1912-12-13
Citations: 139 N.Y.S. 6
Docket Number: 
Parties: POST et al. v. THOMAS et al.
Judges: 
Reporter: West's New York Supplement
Volume: 139
Pages: 6–17

Head Matter:
(153 App. Div. 865.)
POST et al. v. THOMAS et al.
(Supreme Court, Appellate Division, First Department.
December 13, 1912.)
1. Bbokebs (§ 9 )—Stockbbokers—Powebs.
Where an agent for subscribers to a stock pool account has authority to manage the pool and close it out when he sees fit, his agency is terminated when he causes a transfer of the account to another account of which he has also control.
[Ed. Note.—For other cases, see Brokers, Cent. Dig. § 10; Dec. Dig. g 9.*]
2. Principal and Agent (§§ 69, 164*)—Sale by Agent to Himself—Validity.
An agent may not sell to himself withóut his principal’s consent; but the latter, on discovering the facts, may adopt and acquiesce in the act.
[Ed. Note—For other cases, see Principal and Agent, Cent. Dig. §§ 130-145, 622-625; Dec. Dig. §§ 69,164.*]
3. Bbokebs (§ 9*)—Tbansactions—Closing Out—Acts Constituting.
A stock brokerage firm carried a stock pool account for defendants T., H., and O., who were speculating in a certain stock. T. purchased the interest of O. in the account, and notified the brokers thereof, stating that his interest was a two-thirds interest, while H. owned a one-third interest, and that the account was not a joint one, but did not notify the firm that H. knew of his acquisition of O.’s interest. There was no real market for the stock, and the account was on T.’s order transferred to the account of a syndicate of which he was manager. Subsequently the account, pursuant to T.’s order, was retransferred to the original account. Helé, that the transfer of the account was as to H., ignorant of' the transaction, a closing out of the pool account.
[Ed. Note.—For other cases, see Brokers, Cent. Dig. § 10; Dee. Dig. § 9. ]
4. Bbokees (§ 74*)—Release (§ 12*)—Consideration.
A stock brokerage firm carried for T., H., and O. a stock pool account. T. purchased the interest of O. in ,the account and notified the firm thereof, stating that his interest and the interest of H. were not joint, but did not notify them that H. knew of the purchase. Pursuant to T.’s direction, the firm transferred the account to the account of a syndicate of which he was manager. Subsequently, pursuant to T.’s directions, and without H.’s knowledge, the account was retransferred to the original account. Thereafter T. was released from liability on the theory that H. was liable, though the transfer operated to close out .the original account as to him. Helé that, since T. was the only person liable on the account when the release was executed, the release was without consideration, and the firm, not being bound to know that T. was the sole debtor, could sue him for the balance due on the original account.
[Ed. Note.—For other cases, see Brokers, Cent. Dig. § 62; Dec. Dig. § 74;* Release, Cent. Dig. §§ 12-20; Dec. Dig. § 12.*] 1 Ingraham, P. J., and Laughlin, J., dissenting.
Appeal from Order Entered on Report of Referee.
Action by Edwin M. Post and another against Edward R. Thomas and others. From a judgment for plaintiffs, entered on the report of a referee, defendant Thomas appeals.
Affirmed.
See, also, 144 App. Div. 897, 129 N. Y. Supp. 1143.
Argued before INGRAHAM, P. J., and LAUGHLIN, CLARKE, SCOTT, and MILLER, JJ.
Edward L. Blackman, of New York City, for appellant.
William G. Wilson, for plaintiffs-respondents Post and Warner.
Origen S. Seymour, of New York City (Nathaniel R. Bronson, of Waterbury, Conn., and Henry M. Kidder, of Fremont, Neb., on the brief), for respondent Hamilton.
For other cases see same topic & § number in Dec, & Am. Digs. 1907 to date, & Rep’r Indexes
For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

Opinion:
SCOTT, J.
[1] In my opinion the judgment should be affirmed. It makes little matter, as it seems to me, whether the members of the pool are to be regarded as partners, or as joint adventurers. Whatever their relations were to each other, the defendant Thomas acted as agent for the subscribers to the pool, and I think that we may assume for the purpose of this appeal that he was authorized so to act, and that it was confided to his discretion to manage it, and, when he saw fit, to close it out. I think that he did close it out when he caused the account to be transferred to his own account, or, what is the same thing, to the Silver Syndicate account. That ended his agency so far as Hamilton was concerned, and there is nothing to show that he ever received authority from Hamilton to re-embark in the speculation.
Of course, as Hamilton's agent, he could not sell to himself without Hamilton's consent; but the latter, when he had discovered that his agent had undertaken to sell out to himself, was entitled to adopt and acquiesce in his act. It will not do, as it seems to me, to say that the transfer of the account to the Silver Syndicate account, and its retransfer a week afterwards, was a mere bookkeeping transaction. It is true that the transaction was effected by entries on the books of Post and Thomas; but so far as Hamilton was concerned it was a closing out of the pool account.
If I am right in this, Thomas was the sole person liable on the "K. & K. Syndicate account" when the paper relied upon as a release was executed, and if he was so liable that release was without consideration. Plaintiff was not bound to know then that Thomas was the sole debtor. He may well have believed, from Thomas' statements and actions,.that Hamilton had consented to the transfer and retransfer of the "K. & IC. Syndicate account" and remained jointly or partly liable therefor. Indeed, it is probable that he did so believe; for he testified that a part of the consideration upon which the release was given was the promise that he should be furnished with evidence that Hamilton was liable for one-third of the balance remaining unpaid upon the account.
The judgment should be affirmed, with costs.
CLARKE and MILLER, JJ" concur.