Ingraham v. Taylor

Pardee, J. In effect the claim of the plaintiff is that, between the 27th day of April and the 30th day of August, 1887, the defendants, stock brokers, made several contracts to purchase and carry for him on a margin account certain stocks; that he paid to them on that account more than five thousand dollars; and that they did not purchase any stocks but converted the money to their own use. His suit is for the recovery of the money so paid. The defendants reply in effect that they purchased, between the days mentioned, sundry stocks for and at the request of the plaintiff on margin, and that the stocks depreciated to the extent of his account, and that the plaintiff paid the money on that account. Upon the finding, on April 27th, 1887, and on divers days between that day and the 26th day of August following, the defendants, at Hartford, where they carried on their business, made several agreements with the plaintiff to buy and hold specified stocks for him on a margin account; he to pay, as required, sufficient money to protect them from loss. By such contracts the plaintiff bought the right to demand at his option as to time the delivery of shares at the price of the day of the agreement; ‘the defendants, in consideration of his payments upon margins, assumed the risk of an undertaking to deliver shares upon demand at that price. He secured the possibility of profit if within an indefinite time the selected stock should rise in price, without being [510] compelled to furnish the capital necessary for the purchase of it. Such contract does not import that the defendants obligated themselves to furnish the capital necessary for the payment of the full price of the shares upon the day of the contract as upon the taking of a certificate thereof, and allow the plaintiff to lock up that capital, indefinitely as to time, at his option, without interest, when the profits of the transactions'were all to him and the losses in part possibly to them. Nor is it of the essence of the contract that they should acquire possession of a certificate of the shares on the dajr of its date. He designedly made the day of demand uncertain; and inasmuch as each share is the equal of any other in the same corporation, and the shares of the corporation specified were in the market on every day, the possession of a certificate bearing a particular date is not required; only that they should be able to deliver it upon demand, at the price of the day of the contract. The contract required the plaintiff to put Iris margin money at the hazard of their ability to respond in the event of a rise in the price of shares; required him to furnish all capital necessary for the speculation ; secured to him all profits; and denied to them any advantage other than the customary commission. As has been said, the money paid by him to them was the consideration for their risk in agreeing to become responsible for specified shares during an indefinite period at the price of the day of contract, and as they did assume such risk, and the shares did depreciate to the full extent of the margins paid to them, they performed their contract and earned and exhausted the margins. For, while the plaintiff continued in the exercise of his right to rest upon margins, before he had put an end to his period of uncertainty, and before he had asked for or was willing to receive any certificate, he ordered the sale of specified shares if they should reach a fixed point in depreciation. These were sold upon such order; and such sale is legally equivalent to a delivery of a certificate therefor to him. And certificates for the remaining shares were delivered [511] upon bis order. He has thus had everything which his contract secured to him—unlimited opportunity for speculation, and certificates upon demand at the price of the day of his contract. And as the shares depreciated the contract has never been anything but a burden to him. He has failed to prove that any act or omission to act upon the part of the defendants has worked any injury to him. The Superior Court is advised to render judgment for the defendants. In this opinion the other judges concurred.