Case Name: SMITH v. HUTTON et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1910-06-10
Citations: 123 N.Y.S. 656
Docket Number: 
Parties: SMITH v. HUTTON et al.
Judges: 
Reporter: West's New York Supplement
Volume: 123
Pages: 656–662

Head Matter:
SMITH v. HUTTON et al.
(Supreme Court, Appellate Division, First Department.
June 10, 1910.)
1. Brokers (§ 38 )—Failure to Execute Orders—Negligence—Evidence.
Evidence in an action against brokers for negligence in failing to execute an order for sale" of stock held sufficient to go to the jury on the question of their having received plaintiff’s telegrams in the order they were sent, so as to make them liable.
[Ed. Note.—For other cases, see Brokers, Cent. Dig. § 34; Dec. Dig. § 38.*]
2. Principal and Agent (§ 14 )—Agency.
The direction given plaintiff by defendant brokers that he could send any messages to them from another city over the private wire of a certain firm in that city did not make the telegraph operator of such firm, in sending messages from plaintiff to defendants, the agent of defendants, so as to make them liable for any negligence of his in transmission.
[Ed. Note.—For other eases, see Principal and Agent, Cent. Dig. §§ 26-33; Dec. Dig. § 14.*]
S. Appeal and Error (§ 263*)—Necessity of Exception to Charge.
The charge submitting as a question of fact whether defendants’ acts made a certain person their agent, when as matter of law they did not, not having been excepted to, may not be complained of.
[Ed. Note.—For other cases, see Appeal and Error, Cent. Dig. §§ 1516-1532; Dec. Dig. § 263.*]
4. Trial (§ 296*)—Instructions—Curing Error.
Erroneously submitting as a question of fact whether a certain act of defendants made the telegraph operator, who sent messages from plaintiff to defendants, their agent, was harmless; there being no evidence that he transmitted the messages other than in the order in which they were filed, and the jury being directed to find for defendants if they received the second message filed by plaintiff ahead of the first one filed by him.
[Ed. Note.—For other cases, see Trial, Cent. Dig. §§ 705-718; Dec. Dig. § 296.*]
5. Brokers (§ 36*)—Failure to Execute Orders—Ratification. ,
Plaintiff filed a telegram for defendant brokers, instructing them to sell his stock at a certain price. Later he filed another message, instructing them to sell them at a lower price. Afterwards in reply to a telegram from them stating that they received his second message before his first message, and therefore were not at fault in not selling, he wired them to close out his account at their discretion. Held, that while, if the statement in their message was true, his subsequent message was a ratification of their failure to sell, notwithstanding his subsequent message added the statement that he felt he was justly entitled to sale at the price given in his second message, such subsequent message was not such a ratification as matter of law if1 their statement was untrue.
[Ed. Note.—For other cases, see Brokers, Cent. Dig. §§ 29, 30; Dec. Dig. § 36.*]
Ingraham, P. J., and Laughlin, J., dissenting.
Appeal from Trial Term, New York County.
Action by John B. Smith against Edward F. Hutton and others, co-partners, doing business under the firm name and style of E. E. Hutton & Co. From a judgment on a verdict for plaintiff, and from an order denying a motion for new trial, defendants appeal.
Affirmed.
See, also, 134 App. Div. 445, 119 N. Y. Supp. 194.
Argued before INGRAHAM, P. J., and LAUGHLIN, SCOTT, CLARKE, and MILLER, JJ.
William E. S. Hart, for appellants.
Lewis H. Freedman, for respondent.
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 Dee. & Am. Digs. 3907 to date, & Rep’r Indexes

Opinion:
MILLER, J.
This is an action to recover damages for the negligence of the defendants, stockbrokers of the city of New York, in failing to execute an order for the sale of stock. The defendants had purchased for the plaintiff 100 shares of Union Pacific stock. The plaintiff informed the defendants that he was going to Boston, and was told by them that he might send any messages to them over the private wire of .Paine, Webber & Co., stockbrokers of that city. He went to Boston, and on March 25, 1907, the following telegraphic messages were interchanged between the parties to this action over said wire :
(1)
Boston, Mar. 25, 1907.
Mr. De Van.
E. F. Hutton & Co., N. Y.
Msg. No. 1 Pis cancel stops and sell iny Un. Pac. at 130 7/s and Copper at 9O1/4 pis. confirm. John B. Smith.
(2)
Boston, Mch. 25, 1907.
De Van,
E. F. Hutton & Co.
Sell for my account and risk Make limits 129% and 89 Vs instead of former limits. John B. Smith.
(3)
E. F. Hutton & Co.
33 & 35 New Street, New York. De Van
What did you do ans qk.
17 Co.
Time 10:33. Jas. B. Smith.
Paine, Webber & Co.
27 State Street
Private Wire.
Co.
(4)
Boston, Mar. 25, 1907.
J. B. Smith
We did nothing you cancelled your stops please wire more funds.
Devan.
(5)
10:44a Boston, Mar. 25, 1907.
b600 11:14a.
John B. Smith
Your limits now are 100 AGP 90% and 100 TJ. P. to sell at 130Vs is this not correct you cancelled stops. Devan
11:13a
(6)
s/26
E. F. Hutton & Co.,
33 & 35 New Street, New York.
De Van Time 11:37 a. m.
You are wrong those were my first Lts wired 9:50 a. m. 2nd msg. rec'd in N. Y. 957 gave Bts 129% and 89Vs Un Pac should have been sold. An error was made. But not mine & I think you allow sale Ans qk. J. B. Smith.
(7)
Boston, Mar. 25, 1907.
b900
J. B. Smith
We regarded all your telegrams in order they came to us. Your msg to make limits came right at opening and other one a minute or so later. The fault is the wire not ours, taking it up in meantime shall we change limits to 1291/2 and 897/8 ans qk. De Van
12:06p
Time »/25, 1:32 p. m.
70 Co.
De Van
dose out the acct at discretion, but feel that I am justly entitled to sale of U P at 129%. J. B. S.
0)
Time, 2/2 s p. m.
De Van
Please mail statement of acct. to-night care Bright Sears & Co., Exchange Bldg. I assume you have closed out or will on this recovery, please wire reply after 3 am writing. J. B. S.
The plaintiff, who understood telegraphy, testified that he heard No. 1 transmitted by the operator in the office of Paine, Webber & Co., and that he heard the New York operator "O. K." it at 9:50 a. m., and that 7 minutes later, to wit, at 9:57, he sent No. 2. The stock market opened in New York at 10 o'clock. Union Pacific did not sell as high as 130% on March 25th, but between 10 and 10:25 a. m. there were a number of sales in lots, ranging from 100 to 200 shares, at prices varying from 129% to 130. Shortly before the closing of the market, the defendants sold 100 shares for the account of the plaintiff for 122%.
On the trial, the defendants were at pains to explain the receipt of the plaintiff's telegram, authorizing them to close out his account at discretion, and in what manner they obeyed it, but they made no attempt to explain when or in what order telegrams 1 and 2 were received by them. They did produce, however, their copy of No. 1, and it bore a significant erasure, to wit, the figures "959a" in typewriting were erased, and in place of them the figures "1002a" were inserted by pencil. The testimony of the plaintiff as to the time when the messages were sent and when he heard the New York operator "O. K." them, the omission of the defendants to explain when and in what order the first two telegrams were received, and to account in any way for the failure to execute the order to sell at 129%, in connection with the significant erasure on their copy of the first telegram, justified the jury in finding that the messages were in fact delivered in the order in which they were sent, and that the mistake occurred in the defendants' office.
The learned trial court distinctly charged the jury that they must find for the defendants in case they found that telegram No. 1 was received by the defendants after the receipt of No. 2. The court also submitted to the jury as a question of fact whether the direction given to the plaintiff by the defendants to communicate with them over the private wire of Paine, Webber Sc Co. constituted an adoption by the defendants of that method of communication, and thereby made the operator who sent the message the defendants' agent. That was plainly erroneous. The information given the plaintiff that he could communicate with the defendants over the private wire of Paine, Webber & Co. no more constituted the latter the agents of the defendants than a direction to communicate by Postal Telegraph or Western Union would have done. However, the charge was not excepted to, and it is difficult to see how the defendants could have been harmed by it, in view of the explicit charge to find for the defendants in case No. 2. was received ahead of No. 1. Moreover, there is no suggestion in the record that any mistake was made in the Boston office. It is, of cpurse, barely possible that the jury may have been confused by- the charge, but counsel did not deem it of sufficient importance to except to it, and the error was peculiarly one which the court should have had an opportunity to correct.
The only other question requiring consideration is that arising upon the defendants' claim of ratification. The court submitted to the jury as a question of fact whether the telegram of the plaintiff, directing the defendants to close out his account at discretion, constituted a ratification by him of the defendants' failure to sell at 129%. It does not seem to me that that telegram is ambiguous. It was a positive direction to close out the account at discretion. If that direction was sent by the plaintiff with full knowledge of all that had occurred, it seems to me that it was an adoption and ratification by him of the acts complained of. If he intended to stand upon his direction to sell at 129%, he had no business to give a direction to defendants to sell for his account, because it was for the defendants to determine for themselves how best they could protect themselves. By giving that direction and thereby inducing the defendants to sell for his account, the plaintiff must be 4eqmed to have ratified what had previously occurred, provided he had full knowledge of it. Buck v. Houghtaling, 110 App. Div. 52, 96 N. Y. Supp. 1034; Gillett v. Whiting, 141 N. Y. 71, 35 N. E. 939, 38 Am. St. Rep. 762. The mere fact that he coupled with a positive direction to sell a claim as to what he felt himself justly entitled to did not in any wise change the positive and unequivocal character of that direction. However, that telegram was sent in answer to a telegram of the defendants, asserting that they received message No. 1 after message No. 2, and were therefore not at fault. In order to find for the plaintiff under the instruction of the court, the jury had to find that that statement was false. It cannot, therefore, be decided as a matter of law that the plaintiff's direction, given in answer to that false statement, constituted a ratification of the defendants' failure to sell, and it follows that there is no exception in the record, which requires a reversal of this judgment.
After a critical examination of the evidence, I am satisfied that the failure to execute the order to sell at 129% was the defendants' fault, due perhaps to confusion in their office, caused by the condition of the market. For that reason, the verdict is a just one, and should not be disturbed.
Judgment and order should be affirmed, with costs.
CLARICE and SCOTT, JJ., concur.