Case Name: HOPKINS v. CLARK et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896-06-29
Citations: 40 N.Y.S. 130
Docket Number: 
Parties: HOPKINS v. CLARK et al.
Judges: 
Reporter: West's New York Supplement
Volume: 40
Pages: 130–140

Head Matter:
(7 App. Div. 207)
HOPKINS v. CLARK et al.
(Supreme Court, Appellate Division, First Department.
June 29, 1896.)
Factors and Brokers—Ratifying Unauthorized Purchase.
On an issue as to whether plaintiff ratified an unauthorized purchase of bonds by defendant on plaintiff’s account, it appeared that defendant was carrying for plaintiff an account for stock purchased on a margin, but that plaintiff had no other speculative transactions. Plaintiff testified that, shortly before the unauthorized purchase, he called at defendant’s office, and requested defendant to purchase some stock of the L. Co. for him, if he had an opportunity, and that no other stock was talked of; that he distinctly told defendant that he would not speculate; and that notli- ■ ing was said about purchasing any bonds; and that he gave no authority to defendant to buy anything except said stock. Defendant testified that plaintiff offered certain security for any further purchases that he might make; that he discussed the situation in stocks generally, and said that he would like to make a dollar, and that, if defendant could help him, he would like it; and that he stated during the conversation his desire to purchase stocks for a rise. The purchase in controversy was made on a Friday, and a letter from defendant announcing it reached plaintiff on Saturday, after the close of business, and he was unable to communicate with defendant until the following Monday. He telephoned defendant that he had not authorized the purchase of anything but the stock, and that he did not want to have anything to do with any speculation, but he did not expressly repudiate the transaction, and on the same day he wrote defendant. Held, that the evidence was not sufficient to show a ratification by plaintiff of defendant’s unauthorized act. Van Brunt, P. J., and Williams, J., dissenting.
Action by Henry 0. Hopkins against James F. A. Clark and others to recover $7,280, the balance of an account which plaintiff claimed against defendants. A judgment in favor of plaintiff for $3,379.33, and an order denying a motion for a new trial, were reversed by the general term of the court of common pleas. 36 N. Y. Supp. 456. Afterwards a reargument was granted. 37 N. Y. Supp. 1146. The cause now comes on for rehearing. Affirmed.
The action was brought to recover an amount alleged to he due and owing by defendants, as stockbrokers, to the plaintiff. The defendants loaned the-plaintiff $4,368.59, and plaintiff deposited with defendants, as collateral to the loan, 200 shares Louisville, New Albany & Chicago Railway Company stock, and 31 shares of the Oregon Railway & Navigation Company stock. The plaintiff offered to repay the loan, and demanded the return of his stock deposited as collateral. The defendants refused to surrender the collateral upon repayment of this loan, claiming they had also advanced for the plaintiff the further sum of $4,212.50 in the purchase of $10,000 par value of Philadelphia & Reading third preference income bonds, for which they paid 42 cents on the dollar, their commission being $12.50, and that the collaterals were held as security for this indebtedness as well as the former $4,368.59. The plaintiff denied this additional indebtedness, and the issue tried related to this difference between the parties. It was agreed that the total amount of the plaintiff’s claim upon his theory, including interest, was $3,075.02, and for this amount the jury rendered a verdict. There was a motion to dismiss the plaintiff's complaint made at the close of the plaintiff’s evidence, which was denied with exception. There was no motion made at the close of'all the evidence to take the case from the jury. No objection was made to the submission of the case to the jury. The charge is not in the record upon this appeal. There was a motion for a new trial upon the minutes upon the ground, among others, that the verdict was contrary to the evidence, and this motion was denied, with exception. This raised the question which is discussed upon this appeal, and which the defendants claim calls for a reversal of the order, an.d the granting of the motion for a new trial.
The facts are stated by Mr. Justice WILLIAMS as follows:
Argued before VAN BRUNT, P. J., and RUMSEY, WILLIAMS, PATTERSON, and INGRAHAM, JJ.
Paul D. Cravath, for appellants.
Michael H. Cardozo, for respondent.

Opinion:
RUMSEY, J.
The action was brought to recover the balance of an account which the plaintiff claimed against the defendants. It was conceded that for a considerable time before the month of February, 1893, the defendant Campbell had been in the employ of Brown, Riley & Co., who were brokers in the city of Boston. During that time the plaintiff, who was a personal acquaintance and friend of Campbell, had procured to have purchased by the Arm of Brown, Riley & Co. 200 shares of stock of the Louisville, New Albany & Chicago Railroad Company upon a margin; and to secure Brown, Riley & Co. he had deposited with them as collateral 31 shares of stock of the Oregon Railway <& Navigation Company. In February, 1893, there was due to Brown, Riley & Co. for their advances for the purchase of the Louisville, New Albany & Chicago stock about $4,200, while the value of the stocks held by them belonging to the plaintiff amounted to something in the neighborhood of $7,000; leaving about $3,000 apparently due to the plaintiff. In the early part of February, 1893, Campbell severed his connection with Brown, Riley & Co., and became a partner in the firm of Clark, Ward & Co., the present defendants, and the account of the plaintiff was transferred by Brown", Biley & Co. to Campbell's new firm, who paid to Brown, Biley & Co. the amount due on the stocks, and held them for the plaintiff, as the former firm had done. It appears that these 200 shares of stock which were "bought upon a margin by Brown, Biley & Co. for the plaintiff had been carried by them for a long time, and it is fairly to be inferred from the testimony that it was the only speculative transaction which they had had in behalf of the plaintiff. The plaintiff testifies that he was induced to buy this particular stock upon speculation, because Mr. Campbell was a director of the company, and had advised him to buy it; and that he bought it and carried it upon the faith of Campbell's recommendation. He says that he had no other speculative transaction, and this is not denied by Campbell, and must be assumed to be the truth of the case. On the 17th of February, 1893, the firm of Clark, Ward & Co. advised the plaintiff that they had on that day purchased for him 10,000 income bonds of the Philadelphia & Beading Railroad Company, for which they had paid $4,200. The day on which this purchase was made was Friday. The letter announcing it reached Philadelphia, where the plaintiff was, on Saturday, and he received it on the afternoon of that day, too late to communicate with the defendants with regard to the transaction. The plaintiff claims that the transaction was not authorized; and, after some communication with the defendants about it, which will be referred to later, he made a demand upon them for the amount of money which he claimed to be due to him after crediting him with the 200 shares of Louisville, New Albany & Chicago Railroad Company stock and the Oregon Railway & Navigation Company stock; and upon their refusing to pay the amount he brought this action to recover it. The defense set up is that the defendants had purchased, the Reading bonds; that such purchase had been authorized by the plaintiff, or was subsequently ratified by him; that the result of the purchase was a loss, so that in fact there was nothing due to the plaintiff as a balance upon the stocks which the defendants held on his account. Upon the trial in the court of common pleas the plaintiff had a verdict for what was conceded to be due him if the purchase of the Reading bonds was not , authorized, or had not been ratified. A motion for a new trial was made upon the ground that the verdict was against the weight of evidence, which was denied by the learned justice who presided at the court, and judgment was thereupon entered for the plaintiff. From that judgment, and the order denying a motion for a new trial, this appeal was taken.
' It is apparent that the questions which must be decisive of this case are whether there was original authority given by the plaintiff to the defendants, through Campbell, to purchase the Reading bonds on his account, or, if no such authority was given, whether that purchase was subsequently ratified. Just what question's were submitted to the jury by the trial judge does not appear in the record, because the charge is not printed; but we have a right to assume upon this appeal that the defendants had no fault to find either with the questions which were submitted or with the manner of their submission. It is fairly to be assumed that the two questions which are indicated abové, and which lay at the foundation of the case, were submitted to the jury, and properly so; and the question to be decided here is whether the evidence warranted a finding by the jury in favor of the plaintiff upon each of those questions. So far as the parol testimony is concerned, but two witnesses were sworn,—the plaintiff on his own behalf, and Campbell on behalf of the defendants. Both agreed that shortly before the 17th of February, 1893, the plaintiff called upon Campbell at the office of the defendants in the city of Boston, and that there took place a conversation with regard to the business transactions between the defendants' firm and the plaintiff. As to what was said at that time the parties are sadly in conflict. The plaintiff says that the final result of the conversation was that Campbell was to buy for him, if he saw an opportunity, some stock of the Lampson Cash-Carrier Company, which would cost from $1,400 to $1,500 for a hundred shares; that he told Campbell he would like to have him buy him a hundred shares of it; that no other stock was talked of; and that he had repeatedly and distinctly told Campbell that he should not, under any circumstances, speculate, because, being a married man, and having a child, he did not think it would be proper for him to speculate, and he refused in every way to do it, and that Mr. Campbell understood that distinctly. • The plaintiff states positively that at that time there was nothing said about buying any bonds, and that there was no authority given to buy any stock except that of the Lampson Cash-Carrier Company. Mr. Campbell says that the business of the plaintiff with Clark, Ward & Co. was generally talked over, and that, after discussing as to purchases and business for the plaintiff's account, the plaintiff offered to transfer that account, using the equity in it as security for any further purchases that he might make; that the plaintiff "came in to discuss generally the market, the situation in .stocks, and stated that now he was out of business, having been in the dry-goods business, and that he had a family to support, and that, if possible, he would like to make a dollar, and if I would help him he would like to have me do it." He says that then followed a general discussion of the general condition of various stocks, and that dur-. ing this general conversation plaintiff stated to Campbell that what he meant was that, if Campbell saw a chance to make a dollar for him, he would want to do it, and that Cámpbell replied, "Yes." Campbell further says that the plaintiff stated during that conversation a desire to make money by purchasing stocks for a rise. No other testimony was given by Campbell as to this conversation, and there is no claim that there was any further communication with the plaintiff about business until after the purchase of the Reading bonds, which was made on the 17th of February, 1893-. As was said, the notice of this purchase reached the plaintiff on Saturday, the day after it was made, and after business hours, so that he was unable to communicate with defendants until Monday, February 20th. The plaintiff says that on that day he had a telephone communication with Campbell, in which he said that Campbell had no authority to buy anything but the Lampson carrier stock; that they had never talked about Reading, or any other stock than that, and that he declined to have anything to do with it; that he wanted nothing to do with Reading; that he wanted no speculation; that defendants had no authority for that, and that he would have nothing whatever to do with Reading or any other speculative stock. Campbell, admitting that there was a conversation over the telephone on Monday, says positively that no such conversation took place as stated by plaintiff, but that he discussed the situation or condition of the Reading Company, and the prospect and current rumors in Philadelphia, his disturbance over the situation, and his fear that the security might go still lower, and, finally, that he should want to rely upon the defendants to look after the thing for him. Campbell says positively that the plaintiff did not repudiate the transaction in any way. This was the sum of the oral testimony with regard to the matter. Upon this testimony it is quite clear that there was not only a conflict, but a sharp conflict, of evidence for the jury to decide. But the defendants, admitting that, claim that the correspondence which is in evidence, and which it is conceded took place between the parties with regard to the same transaction, is such as conclusively to contradict the plaintiff's story that he repudiated the transaction, and conclusively- to corroborate Campbell's story that plaintiff ratified the purchase.
While considering the weight to be given to this- testimony, it is necessary to bear in mind the precise question to be presented to the jury, and the position which each party took with regard to it. The fact that the plaintiff was liable for the purchase of these bonds was set up by the defendants as an affirmative defense.' Upon them, Therefore, lay the burden, not only of proving the purchase of the bonds, but of proving either that that purchase was authorized, or, if not authorized, that it was subsequently ratified, so that the plaintiff was bound by it. All the testimony with regard to the original authorization has been stated in the former part of this opinion, and it is quite clear that the jury might have found from that that Campbell was not authorized to make any such purchase, or any purchase. Indeed, it seems to us that upon that branch of the case there can be no question that the defendants entirely failed to show an original authorization. It appears in the case that the plaintiff had never had but one speculative transaction. Nobody pretends anything to the contrary. All the authorization that the defendants claim is that which was sworn to by Campbell, and it is very evident that what was said to Campbell does not amount to an authority to buy stock upon speculation, unless a much broader construction is given to it than the words themselves would seem to indicate. The most that Campbell says is that the plaintiff told him he would like to make a dollar if he could, and that, if. Campbell would help him, he would like to have him do it. This, standing by itself, is a long way from giving authority to a man to make any speculative transaction, and, taken in consideration with the fact that neither the defendants' firm nor Campbell had ever done any such business generally for the plaintiff, it practically required the jury to find that there was no-original authority. In order that the defendants might succeed, therefore, they were obliged to show that this transaction was ratified by the plaintiff. The burden of proof lay upon them from the beginning to the end of the case to do this thing, and in analyzing this evidence it is necessary to bear this in mind: Upon that
point the defendants held the affirmative throughout the trial, and their relation to the question never changed. Of course, it happens frequently during the progress of a trial that the party on whom the burden of proof rests gives evidence tending to establish his-allegation, sufficient sometimes to establish it prima facie; and it is sometimes said under those circumstances, loosely speaking, that the burden of proof is shifted; but, as is said by Church, C. J., in Heinemann v. Heard, 62 N. Y. 455:
"All that is meant by this is that there is a necessity of evidence to answer the prima facie case, or it will prevail; hut the burden of maintaining the affirmative of the issue involved in the action is upon the party alleging the fact which constitutes the issue, and this burden remains throughout the trial." .
What was the fact to be established by the defendants? It was I hat the plaintiff, having given no original authority to purchase (his slock, ratified the act of the defendants after he had been advised of it. In this ease no rights of third parties are involved. Under such circumstances, a ratification rests upon the actual and existing purpose to approve the act that has been done. It is a thing which rests within the intention, where the question is between the original parties, and depends upon the fact, and not upon appearances. Glenn v. Garth, 133 R Yr. 18, 30 N. E. 649, and 31 N. E. 344. Before one is called upon to ratify any unauthorized transaction which has been made for him, he is entitled to have all the facts put before him; and after he has received that knowledge he is entitled to a reasonable time in which to act before he can be compelled to take his position with regard to the transaction. 1 Am. <& Eng. Enc. Law (2d Ed.) p. 1205. So the question here was whether the defendants had satisfied the jury by a fair preponderance of evidence, when this case closed, that the plaintiff, with knowledge of all the circumstances, having- a reasonable time to consider the matter, had ratified this transaction, which in his name had been entered into without authority. The defendants claim that the story of the plaintiff is so contradicted by the letters which are presented in the case that his evidence is entirely overthrown, and a verdict based upon it cannot stand. The first letter was written on the 20tli of February, 1893, which was Monday. It was two days after the plaintiff had received notice of the transaction. It was the first communication, except the telephonic communication, which he had made. It refers to the telephonic communication. It does not, however, state that by the talk through the telephone the Reading purchase had been repudiated, but gives another version of it Neither is it said in the .letter that the transaction is repudiated. On the other hand, there is nothing in the letter from which it can be inferred that the trans action is adopted, Reasons are given why no such purchase should have been made, and there is considerable discussion oí the condition of the Reading Company, and it is evident from the letter that the plaintiff was very much worried over the transaction, and not at all certain as to the situation which he' occupied about it. This letter is'followed by one written by Campbell on the 21st of February, acknowledging the receipt of plaintiff's letter of the 20th; and it is said that the fact that that letter makes no reference to a repudiation of the purchase by the telephonic communication affords almost conclusive evidence that no such repudiation had been made, for, if it had, Campbell would surely have referred to it. It must be remembered that these letters are not dispositive documents which are to stand as the basis of rights acquired under them. They are simply put in evidence for the purpose of elucidating, so far as may be, the state of mind of the parties at the time they were written, and showing the precise nature of the transactions which took place between them. They are not documents of which the construction is for the court, but they are portions of the evidence' given to enable the jury to come to a conclusion whether or not a particular thing was said; and the fact that they make no statement of the saying of it, while it may be strong evidence tending to show that nothing of the kind was said, nevertheless, is nothing but evidence, and is to be considered by the tribunal whose duty it is to pass upon the evidence precisely as any other testimony which is offered and referred to. In such cases it is the right of the party to explain any apparent contradiction. The weight to be given to his explanation is necessarily matter for the jury. If the explanation is satisfactory to them, the apparent contradiction is removed; if not satisfactory, the contradiction still remains, and the conflict of evidence is still there; and it is left for the jury to say where, under all the circumstances, in view of the conflict and contradiction, they think the fact lies. In this particular case, if no testimony whatever had been given, the defendants surely would have been defeated. Even had the case stood upon the testimony of Campbell alone, it is well settled that his evidence must have been submitted to the jury, and that it would have been error to order a verdict, because he was an interested party. Kavanagh v. Wilson, 70 N. Y. 177; Wilcox v. Selleck, 92 Hun, 37, 36 N. Y. Supp. 633. We have, then, this peculiar state of facts: The defendants had the burden of proof. They sought to establish the necessary fact by the testimony of a witness which, if it had been uncontradicted, must necessarily have been submitted to the jury to say whether they would accept it as the basis for a verdict in favor of the defendants. It was contradicted. There was opposed to it the .testimony of the plaintiff, .equally positive, equally clear, and whereby a serious conflict of testimony was raised. The objection is that the evidence of the plaintiff is not worthy of belief, because it Was conclusively contradicted by the letters which were in the case. One answer is that, if that were so, still the weight to be given to the testimony of the defendants, upon whom rested the burden of proof, was entirely for the jury. Another answer is that whether or not these letters, written under the circumstances here appearing, conclusively contradict the testimony of the plaintiff, must be decided like any other question of fact. In such a case as this, where testimony is given by interested witnesses, and there is a clear conflict, a finding of the jury against the party who has the burden of proof should never be set aside unless it is opposed by such overwhelming testimony that it must be said that the jury were influenced by prejudice, passion, or corruption to reach the conclusion which they did. In our judgment, that condition of affairs does not exist here. Because of the persons by whom the testimony was given, and because of the nature of the testimony that was given, the case was peculiarly one for the consideration of the jury, and when they have decided it their conclusion ought not to be interfered with.
The judgment and order should be affirmed, with costs.
PATTERSON and INGRAHAM, JJ., concur.