Libaire v. Feinstein

Noonan, J. The motion to strike out the separate defense of the Statute of Frauds (Pers. Prop. Law, § 85, as added by Laws of 1911, chap. 571) is granted. The complaint shows that the plaintiffs are stockbrokers and that they purchased certain stock for the defendant at his request at a certain price. In making the purchase the plaintiffs advanced their own money. The defendant failed, to make payment to the plaintiffs of the money advanced and was notified by the plaintiffs that on a certain day the stock would be sold for his account. The stock was sold on the day specified and in this action the plaintiffs are seeking to recover the difference between the purchase price of the stock and the price at which it was sold, plus commissions, and the cost of the transfer stamps. It is quite evident that the dealings between the parties did not constitute a sale of the stock by the plaintiffs to the defendant. The plaintiffs in buying the stock at the defendant’s request were acting as his agent, (Markham v. Jaudon, 41 N. Y. 235, 240.) Having purchased the stock the plaintiffs assumed the new relationship of a creditor of the defendant and thereupon became pledgees of the stock for the money advanced. (Content v. Banner, 184 N. Y. 121, 124; Mullen v. Quinlan & Co., 195 id. 109, 115.) The Statute of Frauds has no application to such a transaction since none of the elements of a sale are present. (2 Dos Passos Stock Brokers [2d ed.], 883, 889, 890; Rogers v. Gould, 6 Hun, 229.) The cases of Tompkins v. Sheehan (158 N. Y. 617) and Kellner v. Kener (104 Misc. 254; affd., 190 App. Div. 927; affd., 234 N. Y. 521), cited by the defendant, are not in point. In those cases stock was sold by one party to another and the court held that the Statute of Frauds was applicable to the sale. Order filed.