Gallagher v. Jones

• Decision Date: 21 January 1889
• Citation: 129 U.S. 193,9 S.Ct. 335,32 L.Ed. 658
• Parties: GALLAGHER v. JONES. * * State Report Title: Galigher v. Jones
• Court: U.S. Supreme Court

9 S.Ct. 335

129 U.S. 193

32 L.Ed. 658

GALLAGHER v. JONES. *

* State Report Title: Galigher v. Jones

January 21, 1889.

John R. McBride, for appellant.

C. W. Bennett, for appellee.

BRADLEY, J.

This is a suit brought by Jones, a stock-broker, against his customer for the balance of account alleged to be due to the plaintiff arising out of advances of money, and purchases and sales made, and commissions. The complaint or declaration states 'that between the 15th day of January, 1877, and 15th day of January, 1879, the plaintiff, as a stock-broker, at the special instance and request of the defendant, paid and advanced on an open account current, to and for the use of the defendant, divers sums of money, and also earned at the defendant's request, and became entitled to, divers commissions as a broker, for all of which monthly accounts were rendered, and balances struck, and, by agreement, interest charged monthly on balances; and that on the 1st day of March, 1879, there was due and unpaid from defendant to plaintiff the sum of $6,232.30, no part of which has been paid.' Judgment is demanded for this sum, with interest and costs.

Gallagher, the defendant below, in his answer, affer denying any indebtedness to the plaintiff, states that the plaintiff is a banker at Salt Lake City, and that the defendant has had for two years past an account with him as such, and that 'the plaintiff, at the defendant's request, and as his agent, boughtor caused to be bought at the Mining Stock Exchange Board, in San Francisco, Cal., certain mining stocks for and on account of this defendant, and at various times thereafter in the years 1877 and 1878, on the order and at the direction of this defendant, and as his agent aforesaid, bought and sold mining and other stocks up to about the date of the complaint; that at divers times during and between the dates above specified this defendant paid into said plaintiff's bank sums of money on account of said purchases, and to the credit thereof, and which was so applied by plaintiff on defendant's order. And defendant denies that at the date of the complaint the sum of five thousand dollars, or any sum, was due the plaintiff on said account, or on any account, for loans or advances from plaintiff to defendant. Defendant further alleges that it was distinctly agreed between the plaintiff and this defendant in the business that said purchases of stock by the plaintiff were made on defendant's credit, and that said stocks were bought and were to be held subject to defendant's order at all times, this defendant agreeing to pay said plaintiff commissions for his services as agent, and an agreed rate of interest on any advances he might make, and at no time had the plaintiff any authority to either buy or sell stocks on defendant's account, except by his order.'

The defendant then set up the following counter-claims, to-wit: (1) That on the 13th day of November, 1878, being at Virginia City, he ordered the plaintiff, (at Salt Lake City,) by telegraphic dispatch, to sell certain mining stocks then in his hands as defendant's agent, to-wit: 320 shares of 'Justice' stock, worth $9 per share; 50 shares of 'Alta' stock, worth $8 per share; 200 shares of 'Tip Top' stcok, worth $1.60 per share; and to invest the proceeds in 'North Bonanza' stock,—another mining stock on the same board, which the defendant had been investigating. That the plaintiff received this dispatch in ample time to make the transaction, as directed, on that day, but refused and neglected to do so; and that the defedant relied on its being done, and agreed with another party to sell the stock he had ordered purchased. That the plaintiff did not give notice to the defendant of his refusal to comply with said order until several days afterwards, and then by letter. That afterwards, and without any orders so to do, the plaintiff sold the 'Alta' stock at $7.75 per share; the 'Justice' at $4.40 per share; and the 'Tip Top' at $1.25 per share; making a net loss to defendant of $1,200; and that the 'North Bonanza' stock was not worth more than $2 per share on that day, and within five days thereafter it advanced to $5.60 per share, which the defendant would have realized if the plaintiff had complied with his order,—whereby the defendant lost the sum of $6,125. (2) The defendant further alleged that in the same month of November, 1878, the plaintiff, as defendant's agent, held for him 600 shares of mining stock known as 'Challenge' stock; and without his consent, on the 27th and 29th of said November, sold the same for his (the plaintiff's) own use, to the damage of the defendant of $2,850. (3) That on the 22d day of November, 1877, the plaintiff held for the defendant, as his agent, as aforesaid, 50 shares of mining stock known as 'Ophir' stock, worth at that date $37.50 per share, and on that day pretended to defendant that he had sold said stock for defendant, and so reported to him, when in fact he had not sold said stock, but continued to hold the same, and afterwards sold it for $100 per share, the advance amounting to $3,125, which is justly due from the plaintiff to the defendant.

The case being at issue, was tried by a jury, and resulted in a verdict of $5,412.50 for the defendant. This verdict was set aside, (1 Pac. Rep. 15,) and a new trial awarded, and the case was next tried by a referee appointed by the court. He duly reported his findings of fact and law, upon which the court gave judgment for the plaintiff for the sum of $7,028. The substance of the findings of fact was: That the plaintiff was a banker in Salt Lake City; that during the years 1878 and 1879 he bought and sold mining stocks for the defendant upon defendant's order and request, and made the advances necessary for the purchases, and was to receive commissions on the purchases and sales, and interest on the advances, and to hold the stocks purcahsed for defendant in his own name as collateral security for any balance due to him. With regard to the first defense set up by the defendant the referee found that on the 13th of November, 1878, the plaintiff held of stocks purchased for defendant, among others, 320 shares of 'Justice,' then worth $9 per share; 50 of 'Alta,' worth $18 per share; and 200 of 'Tip Top,' worth $1.60 per share; and that on that day the defendant, being at Virginia City, ordered plaintiff by telegram to turn his said stocks, without limit, into 'North Bonanza' at limit of $2.75. That the plaintiff received said telegram at Salt Lake City on the same day in time to have sold the stocks ordered sold, and to have purcahsed the North Bonanza, which was then selling for $2 and $2.50 per share. That the plaintiff failed and refused to obey the directions given in the telegram, and failed to notify the defendant of his refusal until the 15th of November, when he notified him by letter written on the 13th, and received by defendant on the 15th. That within a few davs the price of North Bonanza advanced to $5 and $5.50 per share, having reached $3.50 on the 16th of November, and before the 23d receded to a point below what it was on the 13th. The defendant, at the time of sending his telegram to the plaintiff, was owing him more than $4,000 for advances, commissions, and interest, over and above the market value of the stocks then held by him for the defendant. As a conclusion of law, and under the decision of the supreme court of the territory, given upon setting aside the verdict rendered on the first trial, the referee disallowed this counterclaim, holding, in conformity with the view of the court, that the plaintiff was not bound to comply with the defendant's directions about the stock, and not bound to give him any prompter notice than he...