Opinion
Argued June 5, 1872
Decided June 11, 1872
Francis C. Barlow for the appellant. D. Pratt for the respondents.
The verdict was given for the plaintiffs, subject to the opinion of the Court at General Term, without objection by either party.
It was virtually assented to by both that there were no controverted facts to be passed upon by the jury. But as no specific facts were found by the jury or expressly conceded by the parties, it was necessary for the purpose of an appeal to this court that a concise statement of facts should be prepared under the direction of the Supreme Court, with the questions or conclusions of law thereon. (Code, § 333.) Such statement was prepared and made a part of the record, and the facts presented in that statement are the only facts that can be considered upon this appeal.
The decision of the court below was based upon such facts, and their judgment can only be reversed upon the same state of facts. This court cannot by resorting to the evidence correct, reform or vary that statement. If it is defective in any respect, it must be sent back to the Supreme Court for correction, as was done in Smith v. Grant, reported upon an application for a resettlement of the statement. (17 How. P.R., 381.) But upon a careful examination of the evidence, it is palpable that the statement is full and accurate, and that no material fact which was either proved or conceded upon the trial has been omitted.
The fact that the defendant, from some time in December, 1867, had no actual personal interest in the stock account which had been carried on in his name for the joint account of himself and Sampson, is not material. As Sampson's interest before was latent, so the transfer of the whole interest by the defendant to Sampson was a private transaction between the two, and the ostensible ownership, liability and interest was the same as before. The defendant quoad Travers and the plaintiffs occupied the same positions and was subject to the same liabilities as before the transfer to Sampson.
So far as Travers was concerned, the purchases and sales were by and for account of the defendant.
He was the responsible dealer, liable for the purchases, and entitled to the proceeds of the sales. Moneys paid to the broker went to his credit, and subject to the claims of the broker were subject to his draft. The plaintiffs' money and stocks went into the same general account with his assent, and while the plaintiffs were bound to indemnify him against loss, the money paid in as a margin by the plaintiffs or received upon the sale of stocks bought for them, was passed to the credit of the defendant on his account with Travers, and was so much money had and received by him. The defendant has had the benefit of it, and it is immaterial whether it is still to his credit with his banker or broker, subject to his draft, or has been actually withdrawn by him, or whether it is held by the broker in satisfaction of a balance due upon other dealings entering into the same general account, that is, for a general balance upon the whole account.
The liability of the defendant to Travers, for the result of Sampson's operations in his name and upon credit, is indisputable. As between Sampson and the defendant, it may well be the former is the responsible party in respect to the stocks purchased and sold on his order, but as between the defendant and third persons, the defendant is a principal, and liable as such.
The defendant loses nothing by his agency for the plaintiffs. On the contrary, a balance is due the latter on account, and for that balance they have no claim on Travers, for by the assent of all, the defendant is the client and dealer with him, the party in the transactions and account. Sampson is not liable, for he acted as the agent of the defendant, and plaintiffs dealt with the defendant through him.
If it should be held that when the true relation between Sampson and the defendant became known to the plaintiffs, they might have sought relief against him, they were not bound to do so.
The money of the plaintiffs has gone to relieve the defendant from his liability to Travers incurred through the agency of Sampson.
If commercial gentlemen, who are supposed to know the perils of the stock exchange, encourage their confidential clerks to enter upon a course of speculations upon their credit and in their name, they have no right to complain of the result or shirk the responsibilities of the transactions.
So far as appears, there is nothing to impeach the integrity of Sampson. He has acted with the full knowledge and assent of his principal, and he has only done as others have done before him, erred in judgment.
The defendant, upon the uncontroverted facts, having the money of the plaintiffs in his hands and under his control as much as if it had gone into his general bank account and been used in his business as occasion required, in answer to the request of the plaintiffs that they should be paid, says in substance: "It is true I had your money, but I was in form and name a principal, but in fact a surety for a friend in the purchase and sale of other stocks, and upon those transactions there was a loss, and I have taken your money to indemnify myself against that loss." This is the substance of the defence set up, concisely stated.
It is simply an attempt to transfer his suretyship for Sampson, at a time when it has become onerous and expensive, to the plaintiffs.
I know of no legal process by which it can be accomplished without their consent.
The judgment must be affirmed.
All concur. Judgment affirmed.