Burnham v. Lawson

Lambert, J.: The defendants. are stockbrokers, and the plaintiff opened an account with' them in or before the year 1902. In 1903 the plaintiff called upon .'the defendants and had an interview with Mr. Sullivan, a member of the firm, in reference to his stock .transactions. There is a disjzute as to what occurred, but the jury might properly ñnd that the plaintiff arranged to have his transactions cared for during his absence on a vacation, and that he left with the defendants sufficient collateral to protect his account. The defendants sold out some of the plaintiff's holding’s and this action is brought to recover damages; • The principal question raised by this appeal is whether the sale having been made, the plaintiff ratified the same. The. leading transaction occurred on the 6th day of August, 1903. On that day there was a sharp decline in the market value of securities. The plaintiff' owed the defendants on account $40,485.60, "and the market value of his securities on that day reached $40,962. Under these circumstances the defendants--sold 200 shares of Union Pacific stock at sixty-nine and one-half, and-gave immediate notice of such sale to the plaintiff. He received the letter of notification on the following day at Front’s Heclc, Maine. The letter did not, however, state the price for which the stock was sold. It indicated - that there had bden something of a flurry in the market; that there had been failures, and that the sale was made “to protect your account, as this stock moves vez-y fast.” It contaizzed an expression of the’ opinion that the Union Pacific stock would go five to ten points lowez-, but nothing definite about the actual trazisaction, except that the stock in question had been sold. The plaintiff concedédly did not act upon this letter. He remained silent at Front’s Heck for a week or ten days, and then went to Hew London where he reznained a day azzd a half. While at this latter point the plaizztiff received notice of the sale on the eighth day of Augiist of the other securities’ which had been left in the hands of the . defendants. The next morning lie started for Hew York, arriving there on or about the seventeenth of August. He immediately complained to the defendants of his treatment, and this action was brought. - There is no serious question but that the plaintiff repudiated the [391] transactions of the eighth of August, or that he is entitled to recover damages for the same. It is insisted, however, by the appellants that as to the 200 shares of Union Pacific ^tock, there was a ratification of the sale, evidenced by the fact that the plaintiff .did not repudiate the same immediately upon being notified. We are of .the opinion, however, that this contention is not sound. Whatever may be the rule in cases where the rights of third persons are involved, as between the immediate,parties to the transaction, ratification implies a conscious and intended approval of the act done. It rests upon the actual and existing purpose to make such approval; and to meet this requirement it must be made with full knowledge of all the facts. (Glenn v. Garth, 133 N. Y. 18, 35.) In this case the plaintiff did not know the price which had been realized bn the sale. It was known by the defendants that he was in the State of Maine on a vacation, where he was not likely to be in communication with the stock 'market. If his version of the affair is accepted, as it has been by the jury, the plaintiff had arranged with his brokers for the protection of his holdings, and he had a right to assume that the transaction was within the spirit of his agreement with the defendants and for his benefit. It was not until the seventeenth or eighteenth day of August that the plaintiff actually knew all of the facts in reference to the sale of his Union Pacific stock occurring on the sixth day of that month. It is not seriously contended that he did not on that date repudiate the transaction, as well as those of the eighth of August. We are of the opinion .that these facts do not show an intention or. the part of -the ■ plaintiff, with a full knowledge of all the facts, .to ratify the wrongful sale of his stock on the sixth of August. Before one is called upon to ratify any unauthorized transaction which has been undertaken for him, he is entitled to have all the facts put before him, and then he is entitled to a reasonable time in which tc act before he can be compelled to take his position with regard to the transaction. (Hopkins v. Clark, 7 App. Div. 207, 213, and authority there cited.) The jury have found that the plaintiff did not, under the circumstances, ratify the act of the defendants in reference to the Union Pacific stock, and, were it not foi an error in the charge to the jury, fixing an erroneous measure of damages, the judgment would be sustained. [392] The learned court in its charge to the jury, and by its refusal to charge as requested, fixed the measure of damages as the “ difference between the prices at. which the defendants sold the stock and the highest market price reached by the stock down to a reasonable time after the plaintiff received notice of the sale, together with- interest on the difference.” That- is, the plaintiff was permitted to pick out tfie highest market price of these securities, at any time between the day of sale and a reasonable length of time after receiving notice"; whereas" the proper rule* a? stated by the court in Wright v. Bank of Metropolis (110 N. Y. 237, 249), is that the plaintiff is entitled “to the highest price reached within a reasonable time after the plaintiff has. learned of the convérsion of his stock within which he conld go in the market and repurchase it.” What is a reasonable-, time when thec facts are undisputed and different inferences cannot reasonably be drawn from the same facts is a question. of law. {Wright v. Banh of Metropolis, supra.) We are of opinion that the court did not err in holding that the thirty-first day of August in the samp year was not an -unreasonable extension of time within which the highest price' might he ascertained. It appears from the record that under this charge the jury must have fixed upon some prices which prevailed intermediate the sale and the notice to the plaintiff of such sale. These prices are in excess of any shown to have been offered after such notice, and this was clearly prejudicial to the appellants. For this reason the judgment appealed from should be reversed. , Patterson, P. J., and Laughlin, J., concurred