Court Opinion

ID: 8189593
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:12:28.022693+00
Date Added: 2024-06-11T16:40:33.530789
License: Public Domain

Marshall, J.
(dissenting). It seems to me the court, in the decision of this case, has overlooked the fundamental principles governing the subject of damages for breach of contract and the principles governing the relation of principal and agent.
The situation in brief is this: Respondent employed the appellants as brokers to purchase for him at market a specified number of shares of specified stock, depositing with them the requisite amount of money to pay in full therefor, leaving them free to obtain the stock in the usual course of business on the exchange. They executed the order through another broker, violating the precise obligations of the contract, if at all, by purchasing the stock through the secondary broker on margin instead of themselves and outright, but reported the transaction in a way to indicate the contrary, yet secured the stock for respondent at market as contemplated by the contract, though the transfer was not made on the books of the corporation except as hereafter stated. Later and after re*675spondcnt was informed, of the real state of the ease he demanded. delivery of the stock and thereafter obtained the same, duly transferred. In the meantime, of which respondent was fully advised, the stock depreciated in market value, but respondent was not prevented from reselling the same. Upon discovering that it had not been transferred to him he might have revoked the order and demanded back his money, but instead of so doing he elected to take the property in accordance with the purchase and obtained the same. So, in the ultimate, he secured the stock at the market price thereof when the same should have been transferred on the books of the corporation. He was not made poorer to the amount of a penny by the irregularity in the transaction, nor were appellants to that extent enriched by such irregularity. They, to be sure, had the benefit, during the period of delay, of the use of the deposit made to pay for the stock less the amount paid by the secondary broker as the margin, but in turn, of course, were charged by him with the use to the same amount.
Now conceding there was an irregularity in the transaction constituting a breach of contract, the recoverable damages— there being no special circumstances in the transaction brought home to the respondent at the time of making the contract varying the ordinary rule, nor any special circumstance at all, so far as appears by the complaint — were limited to such as “may reasonably be considered to have been in contemplation by both parties at the time of making of the contract as the probable result of the breach of it.” Hadley v. Baxendale, 9 Exch. 341; Cockburn v. Ashland L. Co. 54 Wis. 619, 12 N. W. 49; Guetzkow Bros. Co. v. A. H. Andrews & Co. 92 Wis. 214, 218, 66 N. W. 119; Serfling v. Andrews, 106 Wis. 78, 80, 81 N. W. 991; Northern S. Co. v. Wangard, 123 Wis. 1, 11, 100 N. W. 1066. The rule stated is universal. The idea of it is that there can be no damages in contemplation of law for breach of contract except actual pecuniary loss and such as, in view of all the circumstances *676known to both parties at the inception of the contract, may be reasonably said to have been then contemplated as might naturally arise from its breach. Were there any such damages in this case ? If there were, I am utterly unable to discover them.
There is nothing to show that respondent could have sold the stock at a higher than the purchase price had he wanted to during the period of delay. Any such opportunity is substantially negatived. There is nothing to show that respondent would have sold the stock during the period of delay before the depreciation occurred and thus prevented loss by depreciation. No complaint is made on that score. There is-nothing to show that respondent by reason of the delay had to obtain the stock at a higher price than the market at the-time the order should have been fully executed. He could have gone into the market during such period and obtained the desired stock at a less price than the value at the time the-order should have been fully executed, and, since he persisted in his desire for the stock, in case he could not have-obtained the same, as contemplated, if it had advanced in-price his damages would have been the difference between the market at the time the order should have been executed and what he could have obtained the same, for by the exercise of' ordinary diligence in the open market. Kelley, M. & Co. v. La Crosse C. Co. 120 Wis. 84, 90, 97 N. W. 674. So, in any view that can be taken of the facts, the respondent was not injured in any way, neither were the appellants benefited in any way, in a pecuniary sense, under the rule for determining legal damages which I suppose to be universal and well known to every court. It is not referred to in terms or in effect in the court’s opinion. The theory seems to be that though respondent obtained just what he contracted for and at the very price he agreed to give, he can, because of the mere irregularity in the execution of his order, obtain as damages the difference between the agreed price and the value*677wlien he obtained possession of the property. I know of no principle or precedent justifying such theory.
The court suggests that, upon discovering the irregularity, respondent might have refused to take the stock and recovered back his money. Granted, but he did not choose to take that course, but rather to stand by the contract and demand and •Obtain the stock. So that suggestion instead of supporting the decision, in my judgment, condemns it as clearly wrong.
The court further suggests some contingencies upon which •damages might have accrued, such as if the defendants had become insolvent during the period of delay respondent could •only have acquired the stock by paying for it again to the second broker. Granted, for the purposes of the case, but nothing of that sort occurred. Legal damages are never to be predicated on mere possibilities as to what might have, but •did not, in fact, occur.
Again, the court proceeds upon the theory that appellants obtained the stock, not when the order was irregularly executed but when it passed from the secondary broker to them. That is a technical way of looking at the matter. They did not purchase the stock at that time but at the time the secondary broker executed the order. The stock cost them the market price when the order, in any view of the case, should, in -due course, have been executed. They did not go into the market at the late day and buy the stock at a less price, by $1,100, than the prevailing price when the order should have been executed. For aught that appears they carried, from the time the order, in due course, should have been executed, certificates of stock indorsed in blank sufficient to satisfy it. It was not necessary to pass any particular certificate through the transfer office to obtain registration for respondent of the stock going to him. So long as he obtained the number of shares ordered and at the agreed price and, since it does not appear that he desired to resell the stock, did not lose any dividend declared or paid in the meantime, nor lose any prof*678its by reason, of being prevented from selling the stock during tbe period of delay at a Higher than the market price when the order was placed and suffered no loss by reason of depreciation by reason of being prevented from selling before the depreciation occurred, he suffered no pecuniary loss. Speculating on what might have but did not occur and predicating damages thereon, in my judgment, is outside of legal principles.
The opinion of the court further proceeds upon the theory that when respondent finally demanded and obtained the stock he was ignorant of the fact that the order had been executed through the secondary broker in the irregular way and so prevented from repudiating the transaction and demanding back his money at a time when the amount thereof was $1,100 in excess of the value of the stock, but, such is not the case as is clearly shown by the complaint. The pleader states that he “waited until the 18th day of February, 1908, for the delivery of said stocks, and then for the first time discovered that said stocks and certificates up to that time had not been purchased in accordance with the instructions . . . and . . . thereupon again demanded a delivery of said stock and certificates, and that the same were actually delivered on or about the 20th day of February, 1908.” Thus, manifestly, the idea that respondent was prevented from electing to save himself from loss by reason of being induced to take the stock in ignorance of the irregularity, is repelled by the complaint.
Viewing the situation from the standpoint of principal and agent, in my judgment there is a fatal infirmity in the court’s decision, in this: It is familiar law that if a person employed as agent to do a particular thing exceeds his authority and the principal, nevertheless, with full knowledge of the facts, accepts the result, as in this case, he thereby ratifies the unauthorized act and makes the situation the same as if authority were originally given as broad as that exercised. McDermott v. Jackson, 97 Wis. 61, 76, 72 N. W. 375. As indicated, it is disclosed by the complaint that respondent, with *679knowledge of all facts known by him when the action was commenced, demanded and received the stock as that which appellants contracted to obtain for him, making no claim for damages because of its not having been transferred to him upon the books of the corporation at an earlier date. The action was commenced about a month after the transaction was closed and evidently was an afterthought, resorted to for the purpose of taking advantage of the irregularity in executing the order, which, .by familiar rules of law, had been waived, as a means of recouping the damages caused by an unfortunate speculation, not caused to any extent by appellants’ wrong. Had the stock advanced in price during the period of delay he would have had the full benefit thereof, and had the stock not been delivered he could have recovered full damages. Had the stock advanced after the transfer to him before the action was commenced to the market price when the order should, in due course, have been executed, doubtless this litigation would not have been commenced. If since the action was commenced it has advanced to a price in excess of the purchase price by the secondary broker, as we may well apprehend it has and that respondent now has the stock, the benefit is his. In short, he has all the advantages of the purchase which he could have had in any event, under the circumstances of his own conduct, and has suffered no disadvantage by reason of the irregularity, so far as appears, not even loss of opportunity to take advantage of any breach which he did not waive.
I cannot discover any ground for sustaining the complaint, and so the decision overruling the demurrer should be reversed.
Winslow, C. J. I concur in the views of Mr. Justice Marshall.
Barnes, J. I concur in the dissenting opinion of Mr. Justice Marshall.