Waters v. Marrin

Charles P. Daly, Chief Justice. The facts of this case, as established by the evidence, are correctly stated in the opinion of Judge MoAdam, and I agree in his conclusion upon the facts. There is no ground in the evidence for the argument upon the appeal that this was part of a continuous trans [448] action- of debits and credits for the purchase and sale of stock. The evidence shows it to have been a distinct and independent transaction. The defendant Marrin testified that there had been ten or twelve transactions previous to this ..during the course of the year, nearly all of which it was necessary to carry out on the San Francisco Exchange. The plaintiff Waters testified that he may have had an interest in one other transaction in his name through the defendants; that he did not remember how many transactions of that kind he had, and that they were cash transactions. Further than this there is nothing to show what these transactions were, or that they were in any way connected with this one, or that they and this transaction were parts of a general running account of debits and credits. ■ The case of McBurney v. Martin (6 Robt. 502), cited by the appellant, is distinguishable from the present case. There the plaintiff’s assignee had no stock to sell. He merely employed the defendant, a broker, to sell 2,500 shares of a certain stock as a speculation, the broker agreeing to borrow that amount of the stock to enable him to make a delivery, and to continue borrowing it until directed by the employer to buy a like amount, that the stock borrowed might be returned to the lender, and the employer putting into the broker’s hands, he being responsible for the return of the stock, a certain sum of money to secure him against any loss that might arise in the meanwhile by an appreciation or fluctuation in the market value of the stock. The broker borrowed the stock, sold it and received the purchase money, which the employer agreed that he might retain as collateral security against any loss by an appreciation of the stock between the time of the sale of it and the time the broker was directed to buy a like amount to be restored to the lender. The ground relied upon as showing that this transaction was not one entered into by the broker in a fiduciary capacity was, that he had the right to retain the money deposited with him to protect an interest which he had of his own, he being personably liable for the amount of stock that was used in the speculation, which [449] made the transaction, as the court thought, one in which credit appeared to have been given to the pecuniary responsibility of the broker as the recipient of the money deposited with him, rather than any trust or confidence placed in his personal character. In the present case, on the contrary, the plaintiffs owned the stock, which they employed the defendants to sell, and which they delivered to the defendants as their agents on the day when the-plaintiffs received notice from the defendants that it had been sold. The fact that there was no market for it here, that it had to be sold in San Francisco, and a corresponding amount of the stock borrowed there by the defendants or their agent to enable them to make a delivery, did not change the fiduciary character of. the transaction. The borrowing of the stock, that delivery might be made immediately at the place of sale, was, as the evidence shows, customary in the business, and involved no interest on the part of the brokers, as in the case cited, which they had to protect, for they received the plaintiffs’ stock here-before the money came into their hands upon the sale in San Francisco, and having received the plaintiffs’ stock and' that money, it was a breach of the trust reposed in them not to pay it over to the plaintiffs, but.to use it for their own purposes, and when the plaintiffs demanded it, to meet the demand by the statement that they had failed in business. The judgment of the court below should be affirmed* Larbemore, J. The complaint avers and the plaintiffs testified that they employed the defendants as brokers to sell upon commission 500 shares of the.capital stock of theFairfax Mining Company, which they did, received the proceeds thereof, for which they have not accounted after demand made, and for the amount thus received, less- the-commissions upon such sale, a judgment was sought. The defendants, in their separate answers, admit the-sale-of 500 shares of such stock, that they had not accounted [450] for the proceeds thereof, and testified to a general credit and running account in this and similar matters between the parties. The question in dispute is whether or not the defendants received such proceeds in a fiduciary capacity. They insist that the transaction involved in this litigation, as well as several previous dealings between them and the plaintiffs, were based and proceeded upon mutual business credit and a general running account, in which the defendants acted as principals, using their own credit for the benefit of the plaintiffs, who “ well knew the customs and manners of said business.” On the contnuy, the plaintiffs proved that the transaction in question was special in character, and claimed that a fiduciary relation was established by the evidence. Throughout the trial the main question involved was itihat of a fiduciary relation between the parties, and the defendants should have asked the court to submit that fact to ithe jury by a specific request; this they failed to do. The request that it go to the jury was not sufficiently specific to render the exception available (O’Neil v. James, 43 N. Y. 84; White v. Meyer, 7 Daly 430). E'er this reason I concur with the Chief Justice that the judgment appealed from should be affirmed. Beach, .J., concurred. Judgment affirmed.