Zimmermann v. Weber

Houghton, J.: The plaintiffs are stockbrokers, and the jury found that the defendant directed them to sell for him twenty-five shares of stock of the Consolidated National Bank which he owned at the price of $160 per share. When the market price reached that figure, the plaintiffs sold such number of shares of stock and notified the defendant that they had made such sale, and requested him to pro [429] duce such stock for delivery to their customer. Between the time of the giving of the order to sell and the time when the plaintiffs sold, the defendant had sold his stock to other parties and did not have it on hand to deliver, and refused to furnish the stock to enable the plaintiffs to carry out their bargain. The person with whom the plaintiffs had bargained to sell having demanded delivery from the plaintiffs, and the stock not being forthcoming, went into the market and bought the twenty-five shares at $180 per share and demanded that plaintiffs make him good for the difference between the price which they liad agreed to sell and price which he was obliged to pay. This the plaintiffs did, and brought this action against the defendant to recover the amount of their loss. The learned trial court held under the facts proved that they had no right of action against the defendant except for their commissions in selling the twenty-five shares, which amounted to $3.12, but, for the purpose of determining whether they had that right or not, he submitted to the jury the question as to whether or not the defendant authorized the plaintiffs to sell his twenty-five shares of stock at $160 per share, and the jury by their verdict found that he so authorized them. The verdict found by the jury established that the plaintiffs acted entirely within the authority given to them by the defendant in bargaining to sell twenty-five shares of the stock in question at $160 per share. The plaintiffs bargained with the purchaser in their own name, as they had the right to do if they chose, and the purchaser properly looked to them to carry out their contract with him. The failure of the plaintiffs to carry out their contract resulted from the default of the defendant in carrying out his and in failing to furnish the stock which he had authorized them to sell for him. The market price rose, and on failure of the plaintiffs to deliver, the plaintiffs’ purchaser had the right to go into the market and buy the stock at the market price, and to hold the plaintiffs, who were the only persons he knew in the contract, foi his damage. The plaintiffs were justified in settling with the purchaser with whom they had bargained for the loss which he had sustained, and being authorized by the defendant to do what they did, it was incumbent upon the defendant to save them from the damage which they sustained. An agent may demand reimbursement from his principal for expenses or damages incurred by him in the proper con [430] duct of his agency. (Story Agency, §§ 339, 340; Howe v. Buffalo, N. Y. & Erie R. R. Co., 37 N. Y. 297; Brown v. Mechanics & Traders’ Bank, 16 App. Div. 207;. Bibb v. Allen, 149 U. S. 481,) In pursuance of the authority given by the defendant the plaintiffs were justified in making the contract for the sale of the shares of stock at the price stipulated by the defendant and in becoming personally responsible for the' delivery of the samé at the price agreed upon. Having become personally responsible, and suffered loss thereby, the defendant should make them good. The plaintiffs are not debarred from recovery because they gave notice to the defendant that they themselves would go ■ into the market and purchase the stock on the twenty-eighth of June unless he furnished the same for delivery by them before that date. The purchaser from the plaintiffs, as he had a right to do, the time for delivery having passed, went into the market prior to that date and himself purchased the stock bn account of the plaintiffs and demanded his damage. Whether the purchaser did in fact purchase at the market price, or what the market price was, was a question of proof. The testimony is not wholly satisfactory on that point, but there was sufficient evidence to raise the question discussed. It might be that the jierson with whom the plaintiffs had bargained to sell purchased at too high a price, because he paid more than the market price, as the defendant claims. But whatever the damage which the plaintiffs suffered might have been the defendant was responsible therefor, It follows that the judgment and order must be reversed and a new trial granted, with costs to the appellants to abide the event. Ingraham, McLaughlin and Scott, J J.-, concurred.