Court Opinion

ID: 6234362
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:29:04.502332+00
Date Added: 2024-06-11T08:57:59.740361
License: Public Domain

The opinion of the court was delivered, by
Williams, J.
There is no evidence that the defendants accepted the delivery of the stock by Markoe & Brother, on the condition that Wister’s indebtedness to them should be deducted from the proceeds of sale. No such agreement or understanding can be fairly inferred from the language of the despatch, in pursuance of which the stock was delivered, or from the previous communications between the parties. On the contrary, the whole correspondence shows that the stock was delivered without any such condition, on the defendants’ promise to pay over the net balance of the proceeds of sale. No other interpretation can be given to the words: “ We will give you net balance to-morrow in Philadelphia.” As applied to the proceeds of the sale of stock, the phrase “ net balance” means, in commercial usage, the balance of the proceeds after deducting the expenses incident to the sale. And without doubt it was understood in this sense by Markoe & Brother, and the defendants intended that it should be. If the order for the delivery of the stock had been addressed to Wister there might be some ground for the contention that by “net balance” the defendants meant the balance of his account after crediting the proceeds of the stock. 'But as it was addressed to Markoe & Brother, how, in the face of their refusal to allow the defendants to retain Wister’s indebtedness out of the proceeds of sale, can it be seriously urged that the defendants meant the net balance of the proceeds after deducting his indebtedness ? There is nothing in the language or in the attendant circumstances to warrant any such *75interpretation of the defendants’ promise. It is clear that the stock was delivered to them with the understanding that they would pay over the net proceeds of sale in accordance with its plain meaning. And if so, the court below was clearly right in refusing to affirm the defendants’ fourth and fifth points. However correct in the abstract, there was nothing in the evidence to which they were applicable.
Nor was there any error in rejecting the offer to show that it is the custom of stockbrokers, when dealing with stockbrokers in other cities, to put all the transactions between them into one account, and to remit or draw for the general balance. Such a custom, if proved, would have constituted no defence to the plaintiff’s action. Admitting its existence, the defendants had no right to credit Wister’s account with the proceeds of the stock. He was not the owner of it, and he had no title or claim to its proceeds. The defendants did not receive the stock from him, and they were not bound to account to him for the price for which.it was sold. Besides it does not appear that they did credit him with the proceeds, and no offer was made to show that any such credit was given. It is clear then, that whether the custom was known to the plaintiffs or not, this case is not within its operation. And if so, evidence of its existence would not help the defendants, and was, therefore, rightly rejected. But if the defendants had received the stock from Wister — knowing as they did that it belonged to the plaintiffs — they would have had no right to apply the proceeds arising from its sale to the payment of Wister’s indebtedness. If there is a custom among stockbrokers, when dealing with others, to appropriate money belonging to the principal to the payment of his broker’s indebtedness, the sooner it is abolished the better: Malus usus est ábolendus. A custom so iniquitous can never obtain the force or sanction of law, and the marvel is that it should be set up as a defence to this action.
The only question which remains to be considered — if question it can be called — is whether Wister or the plaintiffs are entitled to maintain the action. If the right of action follows the title to the proceeds of the stock there can be no doubt that the action is properly brought by the plaintiffs. They were the owners of the stock, and as such, entitled to its proceeds, and as they have not parted with their right to demand and receive them, there can be no question as to their right to maintain the action. It is wholly immaterial that the stock was sold on the orders of Wister, if, as we have seen, the defendants were not bound to account to him for the proceeds, and he had no right to demand and receive them. Without such right it is clear that he has no title to maintain the action. The authorities cited by the counsel for the plaintiffs in error have no application to this case; and if they had, it is not the law of Pennsylvania that the owner of property, which has *76been sold by one agent on the orders of another, cannot maintain an action against the seller for the proceeds of sale which he has received and unjustly withholds. The other assignments were abandoned on the argument and need not be noticed.
Judgment affirmed.