Greene v. Corey

Sheldon, J. The plaintiff claimed that he had put certain amounts of money into the hands of the defendants upon their promise to buy and sell for him upon a margin such property and securities as he should from time to time direct, his money to be a margin for the protection of the defendants; but that the defendants, though pretending to have made these purchases and sales, and to have applied properly the plaintiff’s money as margins thereon, had not done so, and were bound to account to him for the amounts of his payments. While some other matters were nominally at any rate in issue, the real dispute between the parties was whether or not the defendants had made the purchases and sales which they were directed to make, and whether or not the plaintiff was bound by the terms of several releases which he had given to the defendants at the end of some successive months. There was no question that the plaintiff had made to the defend — 546 — ants the payments which he claimed, or that these were to be used by the defendants as margins upon purchases and sales which, though to be made upon margins, were yet to be real transactions. The case had been sent to an auditor and his reports were put in evidence, except that the judge excluded two paragraphs of the first report, which stated certain rulings of 'law that had been asked for by the defendants and the rulings which he made thereon. In our opinion these paragraphs, not being findings of fact and not being evidence for the jury, were not strictly to be regarded as parts of the report. The reading of them to the jury would have created a danger that the jury might have confused these rulings with those made by the judge, which alone were to govern them. The discretion of the judge was wisely exercised in excluding them. Beach & Clarridge Co. v. American Steam Gauge & Valve Manuf. Co. 208 Mass. 121, 124. Fisher v. Doe, 204 Mass. 34, 40. Briggs v. Gilman, 127 Mass. 530, 531. So too the defendants’ request numbered “ A ” could not have been given. Any mistake that had been made by the auditor on questions of law was to be corrected by proper instructions to the jury. Tobin v. Kells, 207 Mass. 304, 309, 310. Hunneman v. Phelps, 199 Mass. 15. Picard v. Beers, 195 Mass. 419. For another reason also this request was properly refused. The defendants’ contention was that the auditor had erred in ruling that the burden was upon the defendants to show that they had used the money which the plaintiff had put into their hands in the manner authorized by their agreement with him, &emdash; that is, that they had executed or caused to be executed his orders for purchases and sales. They claim that this was clearly erroneous. We consider that it was correct. That was the effect of the decision in Fiske v. Doucette, 206 Mass. 275, 282; and it was the point decided in Lonergan v. Peck, 136 Mass. 361. The plaintiff’s testimony as to his knowledge about the defendants’ having purchased the stocks which he had ordered and his intention that the defendants should make such purchases was competent. It tended to show the materiality of the false representations which, as he claimed, had been made to him and had induced him to sign the releases on which the defendants relied. The mere order of evidence was in the discretion of the judge and — 547 — is not to "be reviewed by us. The plaintiff’s testimony that he received no money when he signed these releases was competent for like reasons. We see no ground on which the amount of the commission and profit received by the defendants from the plaintiff was material to the issues on trial. It was properly excluded. The fourteenth interrogatory in the deposition of Leavitt was rightly excluded. Enough appeared to show that the answer to this question was merely a matter of opinion, an inference drawn correctly or incorrectly by the witness from facts which were themselves in evidence. The defendants’ counsel in their brief have confused this with the eleventh interrogatory, which appears to have gone in without objection. The fifteenth, sixteenth and seventeenth cross-interrogatories and the answers thereto were competent upon the issue whether the purchases and sales in question had been actually made and whether the stocks bought were ready and available to be delivered to the plaintiff through the defendants if he had paid the balances due from him and called for the certificates. It was for the judge to decide whether Mr. FitzGerald was qualified to testify to the law of New York. The witness testified that he.had made a special study of the subject. We cannot say that the action of the judge was clearly wrong. Teele v. Boston, 165 Mass. 88, 89. Rowland v. Westport, 172 Mass. 878. The seventh and eighth requests for instructions could not have been given as asked for. The facts therein stated might all have been true, and yet the New York brokers might not have had under their control certificates to a sufficient amount which might rightly have been delivered to a particular customer. If these requests contained a correct and sufficient statement of the law, a broker who had undertaken to purchase and claimed that he had purchased on a margin a hundred shares of a particular stock for each one of a hundred different customers, and who was bound to deliver upon demand and full payment that number of shares to each customer, would conclusively establish against each customer the exact fulfilment of his obligation by proof that he had in bis possession or under his immediate control barely more than a hundred shares of that — 548 — stock; and that would be so, although each one of his hundred customers should simultaneously make the same claim against him that is made in this case. If all transactions were real, it well might be that sales and purchases of stocks made and concluded through the clearing house of a stock exchange by many different brokers with each other for many different customers would result in leaving each broker in possession of the shares which he had purchased, and in the delivery of all which had been sold. But the very fact that a broker is not left in the possession of all the shares that he has undertaken to buy is of itself evidence tending to show that all of his pretended purchases have not really been made, that some of the deliveries that he should have seen to it that he received have not been made to him, either through the clearing house or otherwise. It is not that purchases and sales cannot be properly set off against each other; it is rather that the set-off cannot be a real one unless the opposite transactions that are so set off are themselves real ones, have really been made and carried out. The reasoning of the opinion in Fiske v. Doucette, 206 Mass. 275, is applicable. The broker, to put himself right in such a case as the one now before us, must show that he has under his control, free from the just demands of other customers and available for delivery to the particular customer whose case is in question, the stocks of which that customer upon payment will be entitled to demand delivery. This is the doctrine declared in Fiske v. Doucette, ubi supra, and we adhere to it. This was in substance the rule that was given to the jury; and the defendants have no ground of exception thereto. The ninth request could not have been given. The defendants agreed to make purchases and sales for the plaintiff. That was the agreement as stated in the first letters interchanged between these parties; and we find nothing in their subsequent correspondence to vary this. Their agreement was that they would themselves carry out the transactions, not that they would rely upon a promise by another to do so or upon an assurance by another that he had done so. Under such circumstances, if they chose to accept the promise or assurance of another, they did so at their own risk. They had agreed to act themselves, and they reported to the plaintiff that they had done so; they — 549 — received his money on the faith of this promise and of these reports. They cannot shift their responsibility on another. The tenth request could not have been given. If the minds of these parties never met and there was no agreement between them, the defendants were not justified in using the plaintiff’s money at all, and must account to him for it. The thirteenth request was really immaterial; for the plaintiff was permitted to recover only upon upon the ground that there had been no actual making of the purchases and sales ordered by him. It could not have been given in any event without adding the qualification that the certificates should have been immediately available and under the control of the defendants upon payment of the full price thereof. The eleventh, twelfth, fourteenth and twentieth requests, and the one numbered 1 c are sufficiently covered by what has been said. The eighteenth request would have been misleading. The burden was on the defendants to account, as we already have pointed out. It cannot be said that it appeared that either the defendants or their New York agents had on hand certificates to the amount therein stated. The sixteenth and seventeenth requests refer to the effect of the releases given by the plaintiff to the defendants. The plaintiff could not be relieved from the binding effect of these unless he showed that they were procured from him by fraud. Assuming that the defendants’ misrepresentations as to the character and legal effect of these releases and as to their reasons for desiring to have the releases given to them were not of themselves sufficient to entitle the plaintiff to avoid the releases, yet the instructions requested could not have, been given. There was ample evidence to justify a finding that he was induced to sign the releases by representations, which have been found to be false and fraudulent, that the defendants had actually made the purchases and sales which they reported to him, and that the accounts which they rendered to him were the correct accounts of real and not merely fictitious transactions. It is not worth while to recapitulate this evidence. It is the same evidence upon which it was found that no such purchases and sales had been made, although upon the issue of fraud the burden of course was on the plaintiff. — 550 — We have been carefully through the voluminous record, and cannot find that any of the defendants’ rights have been infringed. Exceptions overruled.