Billingslea v. Smith

Bryan, J., delivered the opinion of the Court. Smith and Pride brought suit against Charles Billingslea in the Circuit Court for Carroll County. The declaration contained the common counts for goods sold, for work done, for money lent, for money paid by plaintiffs for defendant at his request, for money received by defendant for the use of the plaintiffs, and for money found to he due on accounts stated. The following ⁵⁰⁷ account was filed with the declaration, verified by the affidavit of the plaintiff, Smith.

Bal to., Nov. 12th, ’90. Dr. Chas. Billingslea, In ac. with Smith & Pride. 1890. Nov. 5.

To 100 C. Gas Stock, 310 bo’t at 42]..... $ 4,225.00 'By cash on same......... 500.00 --- $ 3,775.00 £< To 100 N. Pac. Stock, 312 bo’t at 74i-...... § 7,425.00 By cash on same......... 500.00 ---§ 6,925.00 ££ To 200 N. Pac. Stock, 314 bo’t at 73.......... $14,600.00 By cash on same........ 800.00 ---- $13,800.00 §24,450.00 Ints. from Nov. 5th to 12th 28.50' §24,478.50 Credits. Nov. 12.

By 100 C. Gas, 310 sold out at 39............. $ 3,900.00 ££ By 100 N. Pac., 312 sold out at 56.......... 5,600.00 ££ By 200 N. Pac., 311 sold out at 56. 11,200.00 $20,700.00 Due S. & P $ 3,778.50 E. & O. E. ⁵⁰⁸ On the trial the plaintiff Smith testified to the partnership between himself and Pride as stock brokers in Baltimore, and that in October, 1890, the firm had a transaction with defendant in respect to the buying of stock for him, and that he told defendant where he bought stocks in New York, and of whom he bought stocks; and notice having been given to defendant to produce an original paper which witness had sent by mail to defendant, and defendant failing to produce it without giving any reason, the plaintiff offered in evidence the following paper: S. & P. PL Pride & Co., Brokers, will receive no business except with the understanding that the actual delivery of property bought or sold is, in all cases, intended, agreed and understood. Deliveries in grain and provisions made in accordance with the rules of the Chicago Board of Trade. Baltimore, Md., Sept. 5, 1890. 18 No. 100. H. Pride, Broker, Telephone 289-3. 11 South Street, (up stairs.) Smith & Pride, Stock Brokers.

Has Bought for Account and Risk of— Amount. Month. Article. Price.

Margins. Exhaust. 25. Mop. — 7P4. — 10’4. This order filled by New York Stock and Produce • Clearing House Company, 18 Broadway, New York, and the witness gave evidence that this paper was a Jac simile in every respect of the one sent to defendant, except that said paper contained the accounts of stocks bought as shown in the account filed with the declara ⁵⁰⁹ tion, and that said paper was sent to the defendant on or about November 5th, 1890.

The witness further testified that on November 5th, 1890, he received by telephone in Baltimore from Westminster an order to buy the stocks above mentioned, and on the same day purchased them by means of a telegram from Baltimore to-the New York Stock and Produce Clearing House Company, 18 Broadway, New York, and purchased the same through said company, and that it was the universal custom among the brokers in Baltimore to buy and sell stocks through New York brokers for their customers,, and that it is the universal custom among brokers to sell out stocks when the customer does not keep -up the margin. A number of letters were then offered in evidence in reference to the dealings between the parties to-this suit all of them written by the plaintiffs, except, one. The testimony of Smith is further stated in the bill of exceptions as follows: “The said witness then proved that Harvey Pride, one of said partners, stated to-the defendant in the presence of said witness, the terms-of the contract between the plaintiffs and the said New York Stock and Produce Clearing House Company, and notified defendant that he would be charged with interest after 1st November, 1890, on the full price of stock bought; that said Pride stated to defendant the terms on which said stock would be bought a month or two before the transaction in the stocks in question; that the-plaintiffs and defendant had several transactions before that of the 5th of November, 1890; that the stocks in question were purchased on the 5th of November, 1890,. as before stated, through telephone in the office of William B. Thomas in Westminster to the office of the plaintiffs in Baltimore. The plaintiffs then offered to read in evidence an original entry made by plaintiffs, on a paper called a (scratch sheet ’ kept by them to prove that the stocks in question were purchased on the ⁵¹⁰ 5th of November, 1890, and to prove an order from the defendant to purchase the same on said day; but the defendant objected to said proof offered and the Court admitted the same for the purpose of refreshing the memory of the witness, the witness having proved that this paper called ‘scratch sheet’ contained original entries of transactions made by him at the very time of the transactions, and he knew it to be correct, and upon looking at it remembered the transactions with the defendant here in question, independent of the paper.” The witness then testified that he recollected the defendant’s order to buy the stocks mentioned in the account filed with the declaration; that defendant gave the order through telephone, that he mailed to the defendant on the evening of November 5th, 1890, the fac simile of the paper above mentioned marked “S. &P. ” which contained a statement of these purchases; and that he received from the defendant payments of money on November 7th, 8th and 10th, that this transaction was “closed out” on November 12th at the Stock Exchange in the City of New York, by the sales of the said stocks on an order from plaintiffs by telegraph to the New York Stock and Produce Clearing House Company to sell the stocks; and that on the same day they deposited for the defendant thirty-seven hundred dollars in the Franklin Bank of Baltimore to the credit of the said Clearing House Company.

The contract was not produced which was testified to have been made by the plaintiffs and the New York Company, and whose contents, according to Smith’s testimony, were stated by Pride to the defendant. A copy of this agreement was offered in evidence by plaintiffs under a commission to take testimony, but it was ruled out by the Court. For the purpose of illustrating our views, this copy is here inserted: ⁵¹¹ “Hew York Stock and Produce Clearing House Company, Limited. Capital, $100,000, (Pull Paid.) “Memorandum of Agreement. “Made this seventh day of July, 1891, between the Platt, G-reulicli Company, party of the first part, and Smith & Pride, Baltimore, Md., party of the second part. “Witnesseth, that the said parties do mutually agree as follows: “1.

That the following are the terms and conditions upon which all contracts between them shall be had, unless others shall be agreed upon in writing. “2. That all property sold by either party to the other is to be delivered as hereinafter stated on payment of the contract price. “3. Thatif the advance or decline in the market price of any property beyond the contract price equals or exceeds the cash credits of the party of the second part with the party of the first part, the party of the first part shall thereupon be at liberty to close and terminate the contract as to that property, and any credits the party of the second part may have with the party of the first part may be applied by the party of the first part to any indebtedness of the party of the second part to the party of the first part, and the party of the first part may close and terminate any or all other contracts and apply the payments or deposits and profits to the payment of any such indebtedness. “4. That the place of delivery of grain and provisions is Chicago, at such houses as the party of the first part may elect, and of all other property the office of the party of the first part in New York City. “5.

That Chicago Warehouse receipts for grain and provisions, and Hational Trust Co. Pipe Line Cer ⁵¹² tificates for oil, may be delivered in lieu of the property represented by them. “6. That the party of the second part has and shall have no authority to act as the agent of the party of the t first part, and he shall in no way hold himself out or represent himself to be the agent of the party of the first part. [Seal.] L. J. GrREULICH, President. Smith & Pride.” A number of letters from defendant to plaintiffs were offered in evidence by plaintiffs dated from October 21st, 1890, to November 17th, 1890. The witness, Smith, further testified that on the night of the eleventh of November he telephoned to Wm.

JB. Thomas at Westminster to give notice to persons who had stock transactions with Smith & Pi-ide, that he “would give them until next morning at ten o’clock to put up margins, and that plaintiffs would sell out the stocks next morning if margins were not put up, and that plaintiffs would deliver stocks to any broker in New York if purchasers would pay what was due on them, and that no check came from defendant. Defendant in his testimony stated that he was present in the office of Mr. Thomas when the telephoning took place; but he denied that anything was said about delivery of stocks. Evidence was given that plaintiffs had deposited in the Franklin Bank of Baltimore different sums of money to the credit of the New York Company from November 6th to November 11th in the year 1890, aggregating eight thousand seven hundred and forty-six dollars and seventy-three cents; the deposits on November lltli amounting to five thousand dollars.

The plaintiffs offered in evidence testimony taken under a commission which will he "more particularly noticed hereafter. This evidence showed that the New York Produce Clearing House Company ⁵¹³ on November 5tli, 1890, purchased for Smith & Pride the stock mentioned in the account filed with the declaration, at the prices named, aud that on November 12th, it sold them at prices named in same account; that when stock was sold Smith & Pride deposited in Franklin Bank of Baltimore balance due to New York Company; that the stocks were held by the New York Company, but never delivered to Smith & Pride, and that there was a decline below the price at which they were purchased. It was also stated in this testimony as follows: “Said stocks were not delivered to said plaintiffs, but after holding the said stocks for several days we gave them notice by telegram, and subsequently by letter, that said stocks were ready to be delivered to them, and that they would be held or delivered to any broker or person in New York whom they might name, upon the understanding that they were to pay six per cent, interest upon the full cost of the stock, less partial payments.” The defendant testified that he did not deal with the plaintiffs for the actual purchase of stocks for delivery, and that it was understood between them that no stocks were to be bought or delivered, but that they were dealing in the rise and fall of market prices; if the prices advanced he was to receive the difference, if there was a decline in prices, he was to pay the loss; that no shares of stock were ever delivered or proposed to be delivered to him by the plaintiffs. There was other evidence tending to prove the same facts.

Thirty-one exceptions were taken to the rulings of the Court on the evidence. The first exception was taken to the evidence that Smith told defendant that he bought stocks in New York, and that he told him from whom he bought them. Other exceptions were taken to evidence that plaintiffs bought stocks from or through the New York Company. It may be sufficient to say in regard to all these objections that if the plaintiffs were employed ⁵¹⁴ to buy certain stocks for defendant, they necessarily had a discretion as to the place where, and the. person from whom they should purchase them; provided they exercised their discretion in good faith for the interest of their principal.

Other exceptions were taken to the admission of the letters of the parties concerning these stock transactions; the letters of plaintiffs which were admitted in evidence being principally statements of ■ accounts and demands for margins, and the letters of defendant enclosing checks and referring to margins. Notice was given to defendant to produce the letters sent to him by plaintiffs, and on failure to produce them, proved copies were admitted in evidence; the Court refused to admit any of plaintiffs’ letters except those written from November 5th to November 11th inclusive. An exception was taken to the admission of an original entry made by the plaintiffs. The Court admitted it for the purpose of refreshing the memory of the witness who made the entry, he testifying that he made the entry at the time of the transaction, and that he knew it to be correct, and that upon looking at it. he remembered the transaction in question independently of the paper.

A similar exception was taken to testimony taken under the commission. The witness was asked what transactions he had with plaintiffs between the fifth and twelfth of November, 1890. He answered as follows: ilI am only able to state them by refreshing my memory from entries made at the time in our books and which I know to be correct. I know that these purchases were made by telegrams, the bulk of our business being done that way.

It has been so long since the purchase and sale was made, that it is now impossible for me to state whether I or some other officer of the corporation made all the purchases or sales, but the records on our books were made at the time the transactions occurred and in the regular course of our business, and I know that the pur ⁵¹⁵ •chases and sales were correctly entered on the records at the time they were made. I will furnish you with a statement.” We think that the law on this subjeet is correctly stated in 1 Greenleaf on Evidence, section 436, as follows: “Though a witness can testify only to such facts as