Case Name: Robert Stewart, Respondent, v. George W. Harris and Others, Composing the Firm of George W. Harris & Co., Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-01
Citations: 101 A.D. 181
Docket Number: 
Parties: Robert Stewart, Respondent, v. George W. Harris and Others, Composing the Firm of George W. Harris & Co., Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 101
Pages: 181–183

Head Matter:
Robert Stewart, Respondent, v. George W. Harris and Others, Composing the Firm of George W. Harris & Co., Appellants.
Sale by stockbrokers of a customer’s stock—the ratification by the customer of such sale, based upon an incorrect report as to the amount realized, may be disaffirmed — if not, the stockbrokers are liable only for the amount actually realized — ques- ■ tians as to matters introductory to proof of the sale are competent.
Where stockbrokers send to a customer a written statement that his stock has been sold at a certain figure and after the customer -has ratified the sale and demanded the amount due to him as shown by the statement, the stockbrokers send him a second statement to the' effect that the price mentioned in the former statement was due to a clerical error and that the stock was actually sold at a lower price, if the customer, being misled by the ■ first statement, ■ ratified the sale in ignorance of the facts, he is at liberty to, disaffirm such ratification.
If, after receiving notice of the alleged error, the customer still elects to ratify the sale, and brings- an action to recover the balance due to him, he is only entitled to charge the stockbrokers with the actual proceeds - of the sale, and they are not .estopped from showing that the price mentioned in the first statement was due to a clerical error.
The exclusion, in such a case, of questions as to matters preliminary or introductory and leading up to proof of the transaction of the sale of the stock, held tp be improper.
Appeal by the defendants, George W. Harris and others, composing the firm of George W. Harris & Co., from a judgment of the Municipal Court of the city of Hew York, borough of Brooklyn, in favor of the plaintiff, entered on the 30th day of June, 1904.
A. S. Mapes, for the appellants.
Robert Stewart, for the respondent.

Opinion:
Per Curiam :
The defendants, who áre stockbrokers, reported to the plaintiff, their customer, a sale of his stock for deficient margin, by a printed and written- statement that it had'been sold at fifty-five' dollars and twenty-five cents per share- to' De Agüero. Thereupon the plaintiff ratified" the sale'and'demanded the amount due- him as shown by such statement. The'defendañts sent "a second statement, dated like the first statement;, marked " Duplicate' account error," that the sale was at- fifty-three dollars and twenty-five cents per share. The plaintiff, insisting that he received this statement subsequent to the mailing of his letter in answer to the first statement, repudiated the second statement and reiterated his demand. He now sues for the balance due as shown by the price realized by, the first statement. The defendants answer /that the price named- in - the first statement was due to a Clerical error of an employee, and that the second statement is true. .
This actibn is based upon a ratification by the plaintiff of the sale-by his agent of this stock. If the plaintiff'assented, misled ,by the first statement and in ignorance of the facts, he was' free to disaffirm (Nixon v. Palmer, 8 N. Y. 398; Rowan v. Hyatt, 45 id. 138) and to pursue another remedy. But if he still elect to affirm the sale,-, he is only entitled to the actual proceeds thereof, and cam not hold the agent for a greater sum stated in his report, if it be shown that such sum was written in by mistake. " In other words, we think that the agent is not estopped from showing the facts, of the sale. . If the plaintiff can hold the .agent for a greater sum than that received, he does "not recover the proceeds of the sale, burather he penalizes, the agent for a mistake in his statement to the sum named therein. We cannot see that there is any hardship worked on the plaintiff. Ratification was not his sole remedy. As we have said, he was not bound by his .ratification after he learned of the alleged mistake. If, therefore,, he chose to continue his ratification he took the risk that the second statement was the truth.
The learned Municipal Court justice refused-to permit a witness in the employ of the defendants, who testified that lie was the " order clerk," to state whether it was part of his duties to give orders for sales or whether lie gave any order for this sale-or whether he received notice of sale or whether he knew to whom the stock was sold, thus shutting out. all preliminary questions as to the alleged sale by the defendants although such sale . may have been made under and by the direction of this employee, and although he may have had personal knowledge thereof. The-justice also refused to permit an employee-of the reputed purchaser to testify whether he had any knowledge whether the purchaser bought any stock of' the defendants on the day named as that of the sale. Even if. these questions were in a sense preliminary of introductory and, so did not reach at once the identical transaction, they certainly led up to it, and if answered they might have been followed by questions to these witnesses which bore directly upon the sale in question. We cannot but think that this general • exclusion was harmful to the defendants, and, without specifically approving of each question excluded, we think that the general course of exclusion was error.
The judgment should be reversed and a new trial ordered, costs to abide the event.
Present — Hirschberg, P. J., Bartlett, Woodward, Jerks and Hooker, JJ.
Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.