Case Name: Edwin M. Post and Grove E. Warner, Respondents, v. Edward R. Thomas, Appellant, Impleaded with Charles A. Hamilton, Respondent, and Orlando F. Thomas, Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1912-12-13
Citations: 153 A.D. 865
Docket Number: 
Parties: Edwin M. Post and Grove E. Warner, Respondents, v. Edward R. Thomas, Appellant, Impleaded with Charles A. Hamilton, Respondent, and Orlando F. Thomas, Defendant.
Judges: 
Reporter: Appellate Division Reports
Volume: 153
Pages: 865–879

Head Matter:
Edwin M. Post and Grove E. Warner, Respondents, v. Edward R. Thomas, Appellant, Impleaded with Charles A. Hamilton, Respondent, and Orlando F. Thomas, Defendant.
First Department,
December 13, 1912.
Principal and agent — action by brokers to recover balance of pool account — transfer of account by one member of pool to his own account — act of agent — release — consideration.
In an action by the general partners of a stock brokerage firm to recover the balance of a pool account which said firm carried for the defendants, the members of the pool who were buying and selling the capital stock of a railroad company, upon the theory that the defendants were jointly liable therefor, it appeared that one of the members of the pool had caused the plaintiff’s firm to transfer the pool account to another account carried by said firm, which he owned or managed, but that said account was retransferred within a week. Thereafter said member was given a release]by the plaintiff from all liability on the pool account.
Held, that the one member of the pool in causing the pool account to be transferred to an account which he owned acted as agent of the other, members, closed out said pool account and became individually liable thereon, and that the release thereafter procured by him from the plaintiff was without consideration;
That a judgment dismissing the complaint as to the other members of the pool should be affirmed.
Laughliet, J., and Ietgbaham, P. J., dissented, with opinion.
Appeal by the defendant, Edward R. Thomas, from a judgment of the Supreme Court in favor of the plaintiffs against the said defendant, but dismissing the complaint as to the other defendants, entered in the office of the clerk of the county of New York on the 24th day of January, 1912, upon' the report of a referee.
Edward L. Blackman, for the appellant.
William G. Wilson, for the plaintiffs, respondents.
Origen S. Seymour [Nathaniel R. Bronson and Henry M. Kidder with him on the brief], for the respondent Hamilton.

Opinion:
Scott, J.:
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 adven turers. 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. Óf 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 "KE 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., concurred; Ingraham, P. J., and Laughlin, J., dissented.