Andrews v. Clark

Alvey, C. J., delivered the opinion of the Court. In this case the action was brought by the appellee against the appellants for the non-delivery of certain railroad stocks purchased by the defendants for the plaintiff ; and for money paid by the plaintiff to the use of the defendants, by the fraudulent procurement of the alleged agent of the defendants, and by the mistake of the plaintiff. The defendants are stock brokers, and while their principal house and place of business is in the City of New York, they have a branch house in the City of Baltimore, and the business is conducted in New York in the firm name of Peters, Schenck & Co., and in Baltimore as Andrews, Peters & Co., Andrews being the resident manager of the branch house in Baltimore. The firm are not members of the Stock Exchange in the City of Baltimore, but all their stock transactions are conducted through the Stock Exchange of the City'of New York.

Hence, orders given for the sale or purchase of stock by a customer in Baltimore is executed by the house in New York, the two houses being connected by private wire ; but stocks or bonds are received and delivered by the house in Baltimore and accounts are rendered and settled there with the customers dealing with the branch house. ⁴²⁶ The plaintiff, an old and long established dealer in jewelry and silver ware in the City of Baltimore, became a customer of the branch house of the defendants, and •dealt in stocks and other securities quite extensively from some time in May, 1884, to the end of the year 1885. During that period there were many purchases and sales for and on account of the plaintiff; and it seems to have been the regular course of dealing and method of conducting the business, that where accounts were active, that is to say, where debits and credits were frequent, the house furnished to the customer monthly statements of account, made up in New York and furnished to the Baltimore house for delivery, showing the state of the dealing, and the balances the one way or the other. These monthly statements were furnished for and delivered to the plaintiff, though with some irregularity during the latter part of the dealing. From the time of the commencement of the dealings between the plaintiff and the defendants to about the middle of December, 1885, the latter had in their employ a person by the name of Palmer, who was largely entrusted with the business of' the branch house, and with whom most of the dealings of the plaintiff were transacted.

It was out of the dealings with this agent that the present litigation has sprung, — the agent having perpetrated gross frauds in the course of that dealing. And the general question here is, who is to bear the consequences of the infidelity and fraud of such agent ? The action was brought on the 15th of' July, 1886 ; and it is in assumpsit on the common counts, with three special counts added ; the first of which special counts alleges that the defendants, in consideration of the sum of $18,000, to be paid to them by the plaintiff, agreed to purchase and deliver to the plaintiff, 200 shares of the common stock of the Chicago, Milwaukee and St. Paul ⁴²⁷ Railway Company ; and that the plaintiff paid to the defendants said purchase money, but the defendants have failed and refused to deliver the stock ; the second spe- . cial count alleges that the defendants, in consideration of the sum of $8,000, to be paid to them by the plaintiff, agreed to purchase and deliver to the plaintiff, 400 shares of the stock of the New York, Lake Erie and Western Railroad Company ; and that the plaintiff paid to the defendants said purchase money, but the defendants have failed and refused to deliver the stock ; and the third special count alleges that the defendants, in consideration of the sum of $8,100, to be paid to them by the plaintiff, agreed to purchase and deliver to the plaintiff 300 shares of the stock of the Missouri, Kansas and Texas Railroad Company ; and that the plaintiff paid to the defendants said purchase money, but the defendants have failed and refused to deliver said stock. To this declaration the defendants pleaded, 1st, That they never were indebted as alleged ; and, 2nd,-That they never promised as alleged.

The case was tried before the Judge, without the aid of a jury; and the Judge found, not a sjoecial verdict, but an itemized verdict in reference to the different subjects of claim, in this form : “It disallows all claim of plaintiff for or in reference to the Chicago, Milwaukee and St. Paul Railroad Company stock, mentioned in the narr., except as hereinafter mentioned. “ It allows the plaintiff for the value of 400 shares of New York, Lake Erie and Western Railroad Company stock, mentioned in the narr., with interest thereon from 11th of June, 1886.............................................$13,234 96 “It allows the plaintiff for the value of 100 shares of the Missouri, Kansas and Texas Railway Company stock, mentioned in the ⁴²⁸ Amount brought forward............013,234 96 narr., with interest thereon from 11th June, 1886..................................................... 3,286 12 “ It allows the plaintiff for the amount of the check for 04,318.31, given by him to defendants on the 18th of December, 1885, with interest from that date............................. 5,265 60 “It allows the plaintiff for the amount received by defendants, and applied by them to purchase of C., M.'& St. Paul Railroad Company stock, being 0125.31, with interest from June 13, 1885............. 166 81 021,954 09 “Less dividend on last named stock, paid by Palmer to plaintiff, on 30th of April, 1886, being 0500, with interest thereon from that date.......................................................... 590 33 021,363 16” And upon judgment being entered the defendants appealed. There was a large mass of evidence produced, some of which was conflicting as to material facts, and upon that evidence each party offered prayers, some of which are long enumerations of what were supposed to be the facts established by the evidence, each side stating the facts in their several prayers which were deemed essential to the support of the particular hypotheses desired to be maintained, and upon which the Court was asked to affirm certain legal propositions as the result of the finding of such facts. Some of the prayers offered by the plaintiff were accepted and affirmed by the Court, as furnishing correct rules to guide in considering and applying the facts of the case ; but all those offered by the defendants were rejected. ⁴²⁹ It is very difficult, in a case presented as this is, where the trial Court has considered the whole case at large and drawn its conclusions, made up of mixed law and fact, to review the judgment with reference only to the legal propositions involved ; for while on a special verdict or a case stated there is no difficulty in applying the law that will control the facts thus ascertained, in a case like the present, where the whole evidence and the law have been considered together, in a concrete form, there is always danger of doing injustice both to the Court below and to the party in whose favor it decides, by disturbing the finding, for some supposed misconception or misapplication of the law. Eor while the finding of the facts is exclusively with the Court below, the law applied, or that should have been applied, is alone the subject of review in this Court.

And therefore the very able discussions of the evidence, in the briefs of counsel in this case, avail nothing here, except as such review of the evidence may show the existence or non-existence of facts tending to support the hypotheses of the prayers granted or rejected by the Court. Of the prayers offered by the plaintiff, those numbered one, two, four, six and seven were granted, the others being rejected. The first of the plaintiff’s prayers relates to the New York, Lake Erie and Western Railroad Co. stock, mentioned in the second special count of the declaration, and in the verdict of the Court. The second prayer of the plaintiff, granted, relates to the Missouri, Kansas and Texas Railroad Co. stock, mentioned in the third special count of the declaration, and also in the verdict of the Court; and the seventh prayer of the plaintiff, granted, relates to the check for $4,318.31, referred to in the verdict of the Court.

The other granted prayers relate simply to the measure of damages. Many of the most important facts of the case are undisputed, and about which therefore there is no conten ⁴³⁰ tion. Among these are the facts that the stocks mentioned in the verdict of the Court, and for which allowances were made, were purchased by the defendants for the plaintiff, and were paid for by the plaintiff ; that the stocks were duly received by the defendants in Baltimore to be delivered to the plaintiff, but that they never were in fact delivered to him : That instead of the genuine certificates of the stocks purchased and received'by the defendants to be delivered to the plaintiff, raised or forged certificates were delivered to the plaintiff, at his place of business, on the 18th of December, 1885, by Palmer, professing to act for and in the name of the defendants, and at the same time claiming and receiving of the plaintiff the check for $4,378.31, as being the amount due the defendants from the plaintiff, for the stocks then professed to be delivered, when in fact there was nothing due from the plaintiff to the defendants whatever, as would appear from the statements of account then in the possession of the plaintiff. That some short time before December 18th, 1885, after repeated requests made by the plaintiff for the statement of his account with the defendants, Palmer furnished statements of the account dated respectively, November 1st and December 1st, 1885, which were afterwards and before the 18th of December,’ 1885, discovered to be false and simulated ; and that upon such discovery, correct copies or duplicates of the monthly statements of the account, which had been furnished by the New York house, to be delivered to the plaintiff, were requested by the plaintiff, and were forthwith furnished to him, and which he had in his possession on the 18th of December, 1885.

That in the statement as of November 1st, 1885, it appears that under date of October 5th, 1885, on the credit side, 100 shares of Missouri, Kansas and Texas Railroad Company stock are entered as “ delivered ; ” and in the statement of December 1st, 1885, it appears that under date of Novem ⁴³¹ ber 4th, 1885, on the credit side, 400 shares of New York, Lake Erie and Western Railroad Company stock are entered as “delivered.” And it is conceded that the stocks thus entered in the statements of account as “delivered ” had been paid for by the plaintiff; and he was, of course, entitled to the delivery of the stocks as of the dates of those entries. It is also among the undisputed facts, that on the 18th of December, 1885, Rhett, the clerk of the defendants, went to the store of the plaintiff and there delivered to the latter a statement of account, made up to the ITth of December, 1885, and at the same time delivered to the plaintiff 500 shares of Texas Pacific Railroad Company stock, for which the plaintiff receipted, and according to the showing of the account rendered, Rhett asked for and received of the plaintiff a check for $1194, as being in full of the amount due the defendants to that date. Immediately after Rhett left the store, Palmer appeared and delivered to the plaintiff a memorandum statement, not in the form of any prior statement that had been delivered, but quite different, and at the same time delivered the raised or forged certificates of stock ; and, according to the memorandum statement furnished of the amount due on the stocks, after deducting the amount of the check that had just previously been, given on t-he settlement with Rhett, Palmer made the amount due the defendants on account the sum of $4318.31, and for which the plaintiff then and there gave him the check for $4318.31, payable to the order of the defendants, and Palmer gave a receipt therefor as in settlement of account in full. It is conceded that this check obtained from the plaintiff, payable to the order of the defendants, was, on the 19th of December, 1885, indorsed for deposit to the credit of the account of the defendants in the banking house of Garrett & Sons, by Palmer, and that the defendants did in fact receive such credit, and ⁴³² the check was duly paid, and the amount thereof entered as a credit in the bank book of the defendants; but that the amount of the check was afterwards entered as a credit in the account of Morrison, a customer of the defendants, by Rhett, .the defendants’ clerk, under some impression made upon him that the credit belonged to that account, though in fact it did not.

It is not disputed that Palmer was in the employ of the defendants from the commencement of the dealing of the plaintiff with them to about the middle of December, 1885; and that his duties and powers comprehended the receiving of orders for the purchase and sale of stocks and securities; the transmission of such orders to the New York house, the receipt of securities and the delivery thereof to customers, and, occasionally, the delivery of monthly statements to those entitled to receive them; and especially were such duties performed by him in the transactions had by the plaintiff with the firm of the defendants. It is contended by the defendants that immediately, upon discovei’ing the fact of the false and simulated statements of account furnished the plaintiff by Palmer, they dismissed Palmer from their service, and that this was before the transaction of December 18th, 1885 ; but it is denied by the plaintiff that he had any knowledge whatever of the discharge of Palmer at the time of that transaction in regard to the stocks and the check, and not until some time thereafter. The certificates of stocks were put carefully away in a safe deposit by the plaintiff, and their raised and forged character was not discovered until some time in June, 1886, when they were taken to the offices of the railroad companies for transfer. Thereupon demand was made upon the defendants for the delivery of genuine certificates of stock, and that demand being refused, the action was brought.

If there was no other evidence in the case required to be considered than the facts enumerated in and made the ⁴³³ "basis of the first, second and seventh prayers of the plaintiff, we should hold without hesitation that those prayers are unobjectionable. But those prayers do not embrace all the facts of the case, and all of them conclude to the right of the plaintiff to recover, and thus exclude from consideration all other facts that might or could change or modify the conclusion to be