Court Opinion

ID: 5461473
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:37:49.604055+00
Date Added: 2024-06-11T08:32:54.356744
License: Public Domain

Ingraham, J.
I concur with the court below, that this transaction is not to be considered a pledge of stocks for the payment of a sum of money advanced thereon, and requiring a notice of the time and place of selling the pledge, to "make the sale legal. This was a purchase by the defendants as agents for the plaintiff, with an advance of money by the defendants on the plaintiff’s account, upon the condition that the plaintiff should deposit a margin of ten per cent, and deposit a further margin when required by the defendants. Under such an agreement, the defendants had a right, upon the plaintiff’s failing to deposit a further margin when required so to do, to sell the stock and close the transaction. This right to sell arises from the previous violation of the contract on the part of the person for whom the stock was purchased, and who, by neglecting to perform on his part, terminated the obligation of the defendants to hold the stock any longer, and left them at liberty to sell the stock for their own protection. The notice which the law requires in the case of the sale of a pledge of stock as security for the pay*200ment of a sum of money advanced thereon is not required, in such a case.
But it is very clear from the terms of the contract, that * before the plaintiff could be placed in the wrong, and before he was called upon to deposit any additional margin, the defendants should give him notice that his margin was diminished, and that they required a further margin. It is also clear, and the defendants5 counsel admits, that it is equally necessary that a reasonable time to comply should be allowed, before the stock could he sold.
I had occasion to examine a similar question in Genet v. Howland, et al. (45 Barb. 560 ;) but in that case the stock was pledged as security for a note payable on demand, and a notice of intent to sell was held to be necessary. In that case, however, as well as in this, if a notice of any thing to be done was necessary, it was equally necessary that a reasonable time within which to do the act required should be given. Any other rule would he to render any notice useless.
In Milliken v. Dehon, (27 N. Y. Rep. 364,) Wright J. says : “ Two things must concur to put the plaintiff in default ; a decline in the market below the margin stipulated in the contract, and a demand that the plaintiff should make good such margin.’5 In that case the demand was to be complied with the next day, and that was held to be sufficient.
In the present case, a notice of not more than two hours was given between the demand of an increase of the margin and the receipt of an account of sales. In all probability, the time between the notice and the sale was much less, because, after the sale was made, the defendants had to return to his office, make the necessary entries, and account of sales, and send the same to the plaintiff. Ho proof is given when the sale was made. I do not intend to say if the plaintiff had been notified to deposit a further margin within two hours, or even less, that it would not have been sufficient, but under the circumstances of this case, I very much doubt whether we could hold, without further evidence, that rea*201sonable time for performance had been given. There is no proof of usage, and no proof of any facts from which the court can decide whether such reasonable time was allowed. To decide this point as matter of law, the facts should appear by which the court can say the party was able, within the time given, to do the act required, and therefore that the time was reasonable.
All the evidence on this subject is that furnished as to a former transaction between the same parties. In that case the same notice was given, and the defendants waited until the next morning, when the deposit was made, and it was perfectly satisfactory. A precisely similar request was made in this case, and without any notice that the party was required to act in any shorter time, I think the plaintiff had a right to suppose that the same course of dealing which had taken place on the former transaction, and was satisfactory to the defendants, was expected in the present case, and if the defendants required any shorter time, that they would have given notice accordingly.
But if it be conceded that the sale was prematurely made, I am of the opinion that the subsequent acts of the plaintiff amount to a ratification of the defendants’ acts, and that he cannot now object to it. For the purpose of this purchase, of stock, the defendants were the agents of the plaintiff, and when they sold the stock and rendered the account, it was the duty of the plaintiff to have dissented at once. Had the plaintiff so dissented, the defendants could have replaced the stock without' loss. They received information of the sale on the 20th May, and remained silent. In September he demanded an account of sales, which was sent to him, with a check for the balance due him. This check, payable to his own order, Vas indorsed by him, and the money drawn from the bank, and it was not till some months after, that this action was brought.
If the plaintiff did not intend to assent to this transaction of the defendants, he should at once have notified them *202thereof. In Bridenbeclcer v. Lowell, (32 Barb. 9,) Allen, J. says: “ The party not having dissented within a reasonable time, an assent to or ratification of the acts will be presumed. When the principals received a letter informing them of what the agent had done, in July, and they were silent until October, and then complained, they were considered to have waived any right of action.”
[New York General Term,
June 3, 1867.
Hor could the plaintiff avail himself of part of the transaction and then repudiate. He accepted payment of the balance on the account as rendered, This ratification as to a part is the ratification of the whole. (Story on Agency, 250.)
The plaintiff, however, claims that such acts are not a ratification, unless he had full knowledge of his rights. I do not understand such to be the rule, but that the party must have full knowledge of the facts and circumstances of the transaction. 'Such facts were all known to the plaintiff. The sale, the price, the balance due, and the circumstances attending the notice, were all within his knowledge, and with full knowledge of the transaction he demands an account of sales, and receives a check for the balance, which he indorses and collects. This amounts to a full ratification of the sale, and it is too late for him now to seek to set it aside.
Judgment should be affirmed, with costs.
Leonard, J.
I think the defendants expected the plaintiff to make the margin good before the meeting of the second board. The plaintiff evidently neglected this, and the defendants were not required to wait longer. • Perhaps evidence should have been given of these facts, which the court cannot be supposed to know. At all events, the ratification is clear, and I concur with Judge Ingraham, in his conclusion on that question. «
J. C. Smith, J. also concurred.
Judgment affirmed.
Ingraham, Leonard and J. C. Smith, Justices.]