Rathborne v. Hatch (90 A.D. 151, 1904)

Ingraham, J.:

• The complaint alleges that between the 1st day of January, 1899, and the 10th day of March, 1900, the firm of C. L. Rathborne & Co., at the request of the defendant, and upon his promise to pay them for their services in his behalf, bought and sold for and on his account at various times 900 shares of the capital stock of the Northern Pacific Railway Company and 200 shares of the capital stock of the Chicago, Burlington and Quincy Railroad Company and that said firm of C. L. Rathborne & Co. paid out and advanced, for and on behalf of the defendant on such transactions had with him as aforesaid, and upon his promise to repay the same with interest, at various times large amounts of money, which, together with the commissions earned for services performed upon such transactions, amounted, with interest, upon the 9th day of March, 1900, to the sum of $17,155.78, for which the plaintiff demands judgment.

The answer, after a denial of any knowledge or information sufficient to form a belief as to each and every allegation in the complaint contained, except demand and non-payment, alleges that prior to the times alleged in the complaint the said firm of C, L. Rathborne & Co. entered into an agreement with the defendant, wherein and whereby O. L. Rathborne & Co. agreed, without deposit or margin of the defendant, to deal in for defendant shares of the capital stock of companies whose shares were dealt in on the New York Stock Exchange, the same to be thereafter delivered or received by the defendant, and that thereafter the defendant authorized said firm to sell short, to be thereafter delivered for defendant, certain stock, to wit, 900 shares of the capital stock of the Northern Pacific Railway Company and 200 shares of the capital stock of the Chicago, Burlington and Quincy Railroad Company; and further alleges that the plaintiff or said firm, “ without the consent, authority or knowledge of defendant and without notice of their intention so to do, and without demand upon defendant for 900 shares of said capital stock of said Northern Pacific Railway Company and 200 shares of the capital stock of the Chicago, Burlington and Quincy Railroad Company, purchased or claimed 'to have purchased 900 shares of said capital stock of said Northern Pacific Railway Company and 200 shares of said capital stock of the Chicago, Burlington and Quincy Railroad Company, at a price much higher than the prices at which said alleged firm of Q. L. Rathborne & Company had sold short said 900 shares of said capita,! stock of said Northern Pacific Railway Company and 200 shares of the capital stock of said Chicago, Burlington and Quincy Railroad Company,” and thereafter notified the defendant that they delivered 900 shares of the said stock to the purchaser to whom they had sold said stock short, and such purchase and delivery were without the consent, knowledge or authority of the defendant and without previous notice 1 of their intention so to do to the defendant, and without a previous demand upon the defendant for said shares of stock. The answer further alleges as a counterclaim that by virtue of the violation of their agreement by said C. L, Rathborne & Co. the defendant sustained damage in the sum of about $16,000.

The case came on for trial at Trial Term. A jury was waived, whereupon the court found that in or about the month of November, 1898, the defendant employed the firm of C. L. Rathborne & Co. to sell for his account and risk 900 shares of the capital stock of the Northern Pacific Railway Company and 200 shares of the capital stock of the Chicago, Burlington and Quincy Railroad Company, representing at such time that he had the aforesaid shares of stock in his possession and would upon demand deliver the same to the said firm, and agreed to pay said firm for their services in that behalf the usual commissions; that “ thereafter the said firm of C. L. Rathborne & Company in pursuance of such employment sold for the account and risk of the defendant nine hundred shares of the capital stock of the Northern Pacific Railway Company and two hundred shares of the capital stock of the Chicago, Burlington and Quincy Railroad Company, and after such sale was made as aforesaid, repeatedly called upon the defendant to deliver said shares of stock and repeatedly warned him that in case of his failure to so deliver such shares that said firm would buy said stock and close out the account, and that said defendant having failed to deliver such stock in pursuance of his agreement so to do, said firm purchased said stock and paid therefor for the account of the defendant and closed out his account and notified defendant thereof; ” that “ in and by the above mentioned transactions the said firm of O. L. Rathborne