Court Opinion

ID: 5497732
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:54:51.342252+00
Date Added: 2024-06-11T08:33:51.384956
License: Public Domain

Ingalls, J.,
(dissenting.) Being unable to adopt the conclusion reached by my associates in this case, I proceed to state my reasons for dissenting therefrom. 1 am convinced that the decision of the learned trial court was in accordance with the facts and the law of the case. The facts in regard to which there is any serious dispute are very few. The action was brought by the plaintiff to recover the sum of $1,440, with interest from April 12, 1878, claimed to be due to the plaintiff from the defendant as the balance upon an account for money deposited with the latter. A draft for such money was drawn by James E. Ostrander, the treasurer of the plaintiff, upon the defendant, and payment was refused. We do not understand but that the amount claimed would be due and owing by the defendant to the plaintiff, were it not for the counter-claim insisted upon herein by the defendant, which consists of money which the defendant claims to have paid to the Germania National Bank of New Orleans, and connected with the sale of 144 shares of the stock of the Crescent City Railroad Company, and which sale of such stock was made under substantially the following circumstances: Henry J. Budington, who was a resident of Kingston, Ulster county, state of New York, was the owner of 194 shares of said stock at the time of his death, which occurred at the city of New Orleans, February 29, 1876. On the 29th day of May, 1876, H. Joseph Budington, the son of the deceased, was duly appointed administrator of the goods, chattels, and credits of the deceased, and as such administrator he took possession of the personal property of the deceased, including the certificates for the said 194 shares of stock. He delivered such certificates of stock, with a power of attorney executed by him as such administrator, authorizing a transfer thereof, to James E. Ostrander, who was the treasurer of the plaintiff, with instructions to Ostrander to send such certificates and power of attorney to the corresponding bank of the plaintiff in the city of New York, requesting such bank to cause the 194 shares of stock to be sold. James E. Ostrander undertook to perform such service, and in *168the manner found by the trial court, as follows, as appears at folio 243 of case: “Seventeenth. Upon December 6,1877, the defendant received a letter written upon plaintiff’s letter heading, and signed by * J. E. Ostrander, Treas.’ Mr. Ostrander was then the treasurer of the plaintiff. This letter contained said certificates of 194 shares óf the capital stock of the Crescent City Railroad Company of Hew Orleans, and also a power of attorney to transfer the stock, signed by the said Budington, as administrator of Henry J. Budington, in whose name the shares stood, together with a certificate of the appointment of the said H. Joseph Budington as administrator by the surrogate of Ulster county. The letter requested that the defendant would send • all this to your correspondent in Hew Orleans, and order the same sold at a price not less than twenty dollars per share.’ ” The defendant received such certificates of stock, with the power of attorney, and transmitted them to the Germania Hational Bank of Hew Orleans, with instructions to sell such stock. The last-named bank placed the certificates in the hands of Reynes & Villere, who were members of the stock exchange, directing them to sell the stock for the best price attainable, not less than twenty dollars a share. They sold 144 shares of the stock at twenty dollars a share, to a person by the name of Willoz. Written memoranda of sale were exchanged, and nothing further was done at the time, and no time was fixed for the delivery of the stock. The Crescent City Railroad Company refused to transfer the stock, upon the alleged ground that there existed a contest between the administrator and the heirs of Henry J. Budington in regard to the ownership of the stock. We do not discover in the evidence any foundation for such pretense on the part of the railroad company. The Germania Hational Bank endeavored to persuade the railroad company to make the transfer, but took no steps to compel such transfer, nor does it appear that such bank even notified the plaintiff or the defendant of such refusal on the part of the railroad company. The transfer not having been effected, the purchaser of the 144 shares of stock claimed damages to the amount of $10 a share, which demand not being complied with, the matter was submitted'to arbitration under what was assumed to be the regulations of the stock exchange; and there was awarded to Willoz the sum of $1,440 as his damages on account of such failure to make delivery of the stock, which sum the Germania Hational Bank paid, without previously notifying either the plaintiff or defendant of the arbitration, or of the award made by the arbitrators, so as to enable the parties interested to take such steps as they might deem necessary to protect their rights. The defendant herein repaid to the Germania Hational Bank the money which was paid by ■ it to Willoz, without previously advising the plaintiff or Budington of its intention to make such payment. Certainly the facts disclose a course of conduct most extraordinary in regard to the attempted sale of the stock. The certificates of stock were subsequently returned to the defendant, and the same were thereafter sent to the plaintiff. The trial court has found in regard to such proceedings the following: “Fifteenth. That no legal steps whatever were taken by either Willoz, Reynes, the Germania Hational Bank, or the defendant to compel the transfer of the stock by the Crescent City Railroad Company to Willoz. Sixteenth. That no opportunity was afforded the plaintiff to compel the transfer of the stock by the Crescent City Railroad Company to Willoz. Seventeenth. That the Crescent City Railroad Company stated that they refused to transfer the stock because they said there was some trouble between the administrator and the heirs of Henry J. Budington, and at the time application was made to them to transfer the stock there existed a contest between the stockholders of the road with reference to securing or controlling the management of the road. Eighteenth. That there was no rule of the Hew Orleans Stock Exchange governing all the questions of the dispute which arose between Willoz and Reynes. nineteenth. That the matter in dispute between Willoz and Reynes was referred to the arbi*169tration committee of the New Orleans Stock Exchange without the knowledge, consent, or privity of the plaintiff. Twentieth. That the arbitration committee of the New Orleans Stock Exchange, finding no rule of that exchange under which they could decide the matter in dispute between Willoz and Reynes, arbitrarily, and without the knowledge, privity, or consent of the plaintiff, the defendant, or the Germania Rational Bank, consulted the rules of other stock exchanges in other cities of the country, and claimed to have adopted a rule of the Rew York Stock Exchange. Twenty-First. That there is no proof that there is or was any rule of the Rew York Stock Exchange of the character claimed to have existed by the members of the arbitration committee of the Rew Orleans Stock Exchange, and under which they made their award. Twenty-Second. That the plaintiff was not informed of the refusal by the Crescent City Railroad Company to transfer the stock until after the award of the arbitration committee of the Rew Orleans Stock Exchange, and the payment of the amount awarded by that committee, by the Germania Rational Bank, to Reynes.”
The sale of the 144 shares of stock was, I think, a violation of the instruction contained in the letter addressed to the defendant, and which constituted the only authority to make the sale of the stock. The direction was to sell all of the shares of stock, being 194 in number, and at a price not less than $20 a share, and no discretion was conferred to sell a lesser number. Thus it appears that the agency related to but one subject-matter, and authorized the performance of but one act, in the manner expressly stated in the letter of instruction, which was free from uncertainty or ambiguity, and was restrictive in its character, and by its terms, fairly construed, directed the sale of the stock in one parcel or block, and at a price not less than $20 per share. It is a fair presumption that the owner of the stock did not desire to sell a portion of the stock, and to retain the residue, and I think such intention is inferable from the letter of instruction and the accompanying circumstances. It does not appear that any effort was made to sell the residue of the stock. This controversy is not between the plaintiff and the purchaser of the stock, but between the plaintiff and the defendant, to which the instruction was given to sell the stock, and which therefore presumably acted with a knowledge of the nature and extent of the authority conferred upon it. I am unable to accept the theory that in the absence of an express direction not to sell a lesser number than 194 shares, the agent possessed an implied authority to sell as many shares, and in such parcels, as was deemed expedient, as the practical effect of such doctrine would seem to be to allow an agent to substitute for an express direction an implied' authority. Suppose an agent should be •directed to sell a farm, at not less than a fixed price per acre, would the agent be authorized to divide the farm and sell a portion thereof, without the knowledge or consent of the owner? I think not. And to my mind the sale of the ;Stock in the manner it was made seems equally, if not more, objectionable. The clear duty of the agent was to offer the entire stock, (194 shares,) and, if a purchaser could not be obtained for the same, that fact should have been ■communicated to the plaintiff, and direction obtained to sell the same in parcels or to return the scrip. Such course seems reasonable. The agency created was special, and not general, and consequently the instructions should have been strictly followed. In Paley, Ag. (3d Amer. Ed.) 201, the author says: “But a special agent, who is employed about one specific act, or certain specific acts, only, does not bind his employer, unless his authority be strictly pursued; for it is the business of the party dealing with him to examine his authority.” See, also, Skinner v. Dayton, 5 Johns. Ch. 351, 365; Bickford v. Menier, 107 N. Y. 490, 14 N. E. Rep. 438. Chief Justice Ruger, after citing the remark of Judge Comstock in Mechanics' Bank v. New York, etc., R. Co., 13 N. Y. 632, that “underlying the whole subject there is this fundamental proposition, that a principal is bound only by the authorized acts of *170his agent,” proceeds to enunciate the following proposition: “It would seem-to be the general rule that no acts of an agent can be resorted to, to establish a power, not included within the terms of bis commission, except those which are brought to the knowledge of his principals, and are approved or acquiesced in by them.”
Applying that doctrine to the facts of this case, and bearing in mind that the defendant’s claim is for money which the defendant advanced to the Ger-mania National Bank, and that the authority for such advance depended solely upon the power conferred by the letter of instruction to the defendant, which derives no enlargement or support from any reasonable presumption or implication, which in some cases, and under other circumstances, courts-have indulged in favor of bona fide purchasers of personal property, I am unable to discover by what authority the defendant paid to the Germania National Bank for the plaintiff the said sum of $1,440, without first informing the plaintiff of its intention to make such payment, and receiving its assent thereto. The inquiry here involves simply a question of authority, and not of expediency, and consequently it is immaterial whether or not, through the fluctuations of the stock market, the failure to perfect the sale of the 144-shares of stock proved pecuniarily advantageous to the estate of Henry J. Budington. That estate is not represented in this action, and should not be-confounded, it seems to me, in determining the rights of the parties hereto. The plaintiff in this action, not being the owner of the stock, could not be benefited by any advance in price, and consequently that consideration cannot have even an equitable bearing in favor of defendant against the plaintiff herein. The pertinent inquiry is whether the defendant has established, a legal right to withhold from the plaintiff its money upon the pretext insisted upon. The defendant’s claim must rest upon the theory of money paid for the plaintiff at its request, and the facts negative the idea- of any such request, or even acquiescence by the plaintiff in such payment. It appears-that the. instruction to sell the stock was transmitted by the defendant to the Germania National Bank, and therefore both banks acted with knowledge-thereof, and should have followed the instructions contained in the letter, or have asked a modification thereof, as there was abundant opportunity to-do so.
Furthermore, I think the view taken by the learned trial court in regard-to the binding force of the arbitration proceeding, so far at least as the rights of the plaintiff and the Budington estate are concerned, was justified by the-facts established and the law applicable thereto. Neither was heard, or even notified, of the proceeding, and, so far as the evidence seems to disclose, the method by which the damages were adjusted was without precedent, and calculated to work injustice to the owner of the stock. In effect, the plaintiff was called upon to pay $1,440 without being chargeable with any wrongful act, or even a breach of duty, to satisfy the speculative demand of Willoz,. the purchaser of a portion of the stock, awarded to him by such an extraordinary proceeding. The defendant paid the money voluntarily, with a knowledge of all the facts, and without notifying the plaintiff of its intention to make such payment, and now seeks to compel the plaintiff to reimburse it for the money advanced in direct violation of the instruction of the plaintiff and Budington. I am convinced that the decision of the trial court was correct,, and that the judgment should be affirmed, with costs.