Opinion ID: 1772875
Heading Depth: 1
Heading Rank: 3

Heading: measure of damages for lost stock

Text: The traditional damages for conversion consist of the return of the property itself, or if the property cannot be returned, the value of the property at the time of the conversion. Boisdore v. International City Bank & Trust Co., 361 So.2d 925 (La.App.4th Cir.), writ denied, 363 So.2d 1384 (La.1978). There are some transactions in stocks in which to hold a defendant liable only for the value of the stocks at the date of their actual conversion would afford a very inadequate remedy; as, for instance, where one buys stocks with the intention of holding them for a rise in the market and the broker sells them without authority so that the principal loses the opportunity of availing himself of the rise. Leurey v. Bank of Baton Rouge, 131 La. 30, 58 So. 1022 (1912). Where a commodity which fluctuates in value is converted, its owners should be given the benefit of better prices that prevailed within a few months afterwards. Succession of Gragard, 106 La. 298, 30 So. 885 (1901). Every act whatever of man that causes damage to another obliges him by whose fault it happened to repair it. La.Civ.Code art. 2315. Damages are measured by the loss sustained by the obligee and the profit of which he has been deprived. La.Civ.Code art. 1995. The value of Quealy's NEGEA shares on the date they were wrongfully transferred by Paine Webber to NEGEA (December 9, 1977) was $24,885. Rather than following the general rule in conversion cases and measuring the shares' value as of the date of conversion, the trial judge awarded Quealy $32,437 for the lost stock, which represented its market value on the day before trial (December 13, 1983). The general rule accomplishes the goal of fully compensating the conversion victim in cases where the converted property depreciates over time. In such instances, the victim is made whole by returning to him exactly what was lost. In the case of stock, which fluctuates in value, applying the general rule of damages will not always accomplish the goal of making the victim whole. Such is the case here. In order for Paine Webber to fully repair the damage caused, it must reimburse Quealy in an amount sufficient to enable him to repurchase exactly what was lost: 1,500 shares of NEGEA stock. La.Civ.Code arts. 2315 and 1995. The trial judge thus properly awarded Quealy an amount commensurate with the value of 1,500 shares of NEGEA stock as of the day before trial. [6]