Coquard v. Weinstein

Hunt, J. A majority of the court are disposed to affirm the judgment of the district court solely upon the ground that the defendant’s order for the sale of the stock was to sell for $1.90 per share, and not to sell for any other lower price, and that for failure of any substantial proof tending to show that plaintiff, by the exercise of reasonable diligence, could have sold the 300 shares for said price of $1.90 per share, the motion for a nonsuit was properly sustained. The answer of the defendant expressly pleads that the highest market price was-$1.90 per share, and avers that plaintiff neglected to sell at said figure. The replication admits that the highest market [316] price at the time of the order to sell was as plaintiff pleads, but says it could not be obtained after defendant’s order to sell was received, although plaintiff tried to find purchasers at that figure. These pleadings raised a material issue, upon which the defendant assumed the burden of proof. The only direct evidence at all upon the fact that plaintiff could have sold at $1.90 per share, is in his letter of October 9th, wherein he says, “500 shares sold to-day at $1.90,” coupled with the admission that plaintiff was a broker on the stock market, and familiar with stock quotations. The division of our opinions consists in this: My learned .associates say that it is too strained an inference to conclude, ■even on a motion ■ for a nonsuit, that, because a broker knows of one sale of stock at the figure he was directed to sell at, he could have sold his client’s stock at an equally high price, and should be held liable for not doing so. They may be correct, but upon a motion for a nonsuit, I think, under all the facts ■of this case, as developed by the testimony and correspondence, "that probably defendant made a bare prima, facie case of negligence on plaintiff’s part. We have therefore determined to rest our affirmance of the case upon a ground on which we are ■thoroughly in accord, namely, that even if the plaintiff acted upon an erroneous construction .of the telegram, the defendant, by his conduct, discharged plaintiff from the legal consequences •of any such misconstruction. The broker appears to have acted honestly and in good faith throughout the whole transaction between himself and the defendant. He interpreted defendant’s telegram to sell for the highest market price at the date of its receipt, and acted accordingly. Thereafter the stock fell in price. Of this decline, and of the market price, the plaintiff repeatedly advised •defendant, by letters, at divers times between the time of defendant’s order to sell up to the close of the year 1891. The •defendant never again advised him to sell, but knowingly permitted him to retain the stock, under the belief that his authority to sell was limited to the highest market price at which [317] it could have been disposed of at the date of the receipt of the original order of sometime previous. We therefore have a case presented where the defendant contends that his telegram was a continuing order to sell, without limitation as to time or price, except that it be the highest when sale was made, while plaintiff argues that the order was to sell only for the price paid at the date of the receipt of the telegram, and that he had no authority to take less, and that he honestly so construed its directions. The most favorable view of the telegram, from defendant’s standpoint, is that it was fairly susceptible of two constructions. Its ambiguities gave rise to this litigation, for the plaintiff, in good faith, acted upon one construction, while defendant has sued him upon another. The want of precision on defendant’s part fixes the loss, if any, in such cases, upon the writer of the order, rather than upon his broker. (Courcier v. Ritter, 4 Wash. C. C. 549, Fed. Cas. No. 3,282.) Under the facts a further principle governs, which may be stated as follows : Where a principal gives to his agent telegraphic instructions, fairly susceptible of two materially different constructions, and the agent honestly acts upon an interpretation not intended by the principal, yet repeatedly advises the principal of his acts, and the principal well knows of such acts, and of the agent’s construction of the telegraphic instructions, but does not advise his agent of the erroneous construction of the instructions, if loss occurs to the principal by the agent’s acts under his construction of such instructions, the principal must be held to have accepted the agent’s construction, and cannot afterwards sue the agent for any loss which may have occurred by such acts of the agent. (De Tastett v. Crousillat, 2 Wash. C. C. 132, Fed. Cas. No. 3, 828; Mechem on Agency, §§ 315, 484, 954; Story on Agency, § 74; Vianna v. Barclay, 3 Cow. 281; Foster v. Rockwell, 104 Mass. 167; National Bank of Commerce of Boston v. Merchants’ National Bank of Memphis, 91 U. S. 92; Long v. Pool, 68 N. C. 479; Pickett v. Pearsons, 17 Vt. 471; Oil Co. v. Montague, 65 Iowa 67, 21 N. W. 184.) [318] The defendant should have dissented, during their correspondence, if the plaintiff had disregarded his instructions. Not having done so, his assent to the broker’s act in holding the stock must be presumed. The judgment is affirmed. Affirmed. Pemberton, C. J., and De Witt, J., concur.