Emmons v. McCreery
| Decision Date | 14 March 1932 |
| Docket Number | 132 |
| Citation | 160 A. 722,307 Pa. 62 |
| Parties | Emmons v. McCreery et al., Appellants |
| Court | Pennsylvania Supreme Court |
Argued January 19, 1932
Appeal, No. 132, Jan. T., 1932, by defendants, from judgment of C.P. No. 1, Phila. Co., June T., 1930, No. 480, on verdict for plaintiff, in case of J. Grey Emmons v. Samuel McCreery et al., copartners, trading as Samuel McCreery & Co. Reversed.
Trespass for conversion of securities. Before SHULL, P.J., specially presiding.
The opinion of the Supreme Court states the facts.
Verdict and judgment for plaintiff for $12,725. Defendants appealed.
Errors assigned, inter alia, were admission of letter in evidence referred to in opinion of Supreme Court, and refusal of judgment for defendant n.o.v., quoting record seriatim.
The judgment of the court below is reversed, and is here entered for the defendant n.o.v.
Clarence E. Hall, of Orr, Hall & Williams, for appellants. -- Parol evidence contrary to the terms of the agreement is inadmissible, in the absence of fraud, accident or mistake Heller v. Heller, 3 Pa. D. & C. 246; Crelier v Mackey, 243 Pa. 363; Gianni v. Russell & Co., 281 Pa. 320; Chapin v. Iron Co., 145 Pa. 478.
The agreement of May 28, 1926, confers upon defendant the authority to sell without notice such securities as are in his hands, and the case thus falls clearly into the classification of an authority coupled with an interest: Blackstone v. Buttermore, 53 Pa. 266; Yerkes's App., 99 Pa. 401; Boyer v. Nesbitt, 227 Pa. 398; Union Ins. Co. v. Allegheny, 101 Pa. 250; Harvey v. Bank, 119 Pa. 212; Radich v. Hutchins, 95 U.S. 210.
There must be knowledge to establish a waiver: Diehl v. Ins. Co., 58 Pa. 443; Girard F. & M. Ins. Co., v. Hebard, 95 Pa. 51.
L. Stauffer Oliver, for appellee. -- That a broker may waive his right to sell without notice has clearly been established by the leading case of Rosenthal v. Brown, 247 N.Y. 479, 160 N.E. 291. See also Rea v. Transfer Co., 201 Pa. 273; Thomas v. Boyle, 265 Pa. 487; Cleveland v. Salwen, 292 Pa. 427.
As to the general duty of a stockbroker to demand margin, and also give the customer full and complete notice of the sale and intention to sell, see Pearson v. Kurtz, 280 Pa. 34; Berberich's Est., 257 Pa. 181; Conynham's App., 57 Pa. 474; Fitchthorne v. Barclay, 14 Pa. D. & C. 83.
Plaintiff made no attempt to prove, as appellants claim, a contemporaneous parol agreement contrary to the written card signed by plaintiff.
As the admissibility in evidence of a letter sent by the plaintiff and his counsel to defendants, setting forth plaintiff's case, written thirteen weeks after the alleged conversion, we cite: Glatfelter v. Mendels, 46 Pa.Super. 562; Crossgrove v. Himmelrich, 54 Pa. 203; Hershey v. Love, 278 Pa. 161.
Where a customer repudiates a certain transaction, and thereafter receives a statement of the account, which embraces the transaction complained of, the prior repudiation will be equally effective as would a protest concerning the statement itself.
A wrongdoer cannot compel the injured party to take action or make an election in regard to the wrong done: Berberich's Est., 257 Pa. 181.
It is conclusively settled in this State that a customer, who has been injured by the wrongful sale of a broker, may continue to deal with the broker for the purpose of putting his account in shape for removal to another broker, and is not obliged to close out his account immediately after the wrongful sale: Gervis v. Kay, 294 Pa. 518.
Correspondence is admissible, though phrases appear therein favoring the contention of the one presenting it, as in the case of the production of a letter necessary to show a demand for payment: Hershey v. Love, 278 Pa. 161; Holler v. Weiner, 15 Pa. 242.
This court has characterized brokers, who sell customers' securities without notice, as "wrongdoers," and has referred to such sales by them as "defendant's wrong" and as a "tort": Berberich's Est., 257 Pa. 181; Gervis v. Kay, 294 Pa. 518.
Before FRAZER, C.J., SIMPSON, KEPHART, SCHAFFER, MAXEY and DREW, JJ.
Emmons, appellee, recovered in the court below for the conversion of certain securities sold by McCreery & Company, appellants. Emmons, who had been trading with McCreery & Company, stockbrokers, for a number of years, had in 1926 signed an agreement, in substance as follows: "It is agreed between us . . . that all securities carried in the customer's [appellee's] account . . . are pledged as collateral security for any and all claims and demands that the broker may now or hereafter have against the customer, and, waiving all notice, the sale . . . of the above or any other securities in the customer's account, or that may be held by the broker, is hereby authorized . . . whenever it is deemed necessary by the brokers for their protection." It is clear from the terms of this agreement that he thereby unconditionally authorized the future sale of any or all securities from his account at any time without notice.
Appellee's account during October of 1929 was admittedly far below marginal requirements, and, on October 19th, 21st and 23d, he was notified to make payments or deposit additional collateral. He states that he talked to his broker on the evening of October 23d, and promised to deliver 1,000 shares Prudential Investors to the firm the following morning. At that time, Emmons notified his broker that he could not get the additional collateral shares until noon. He did deliver some of these shares to them at about 11:45, but not in the amount promised. The market having receded continually during the day, the broker, at 12:15, sold, without notice, some shares of Emmon's stock which they held as collateral. It is conceded at the time of this sale Emmons owed $100,000, and after the sale he made settlement for that entire amount, without protest or any notice at that time that he had any claim on account of the alleged unlawful sale of stock. It was not until over two months later that he questioned the broker's action. He then sent a letter to McCreery wherein he demanded payment of his supposed loss and therein stated facts setting forth a complete cause of action for that loss.
The court below admitted this letter in its entirety and without qualification as substantive proof of plaintiff's claim. It was objected to as a self-serving declaration, and its admission is here assigned as error: Glatfelter v. Mendels, 46 Pa.Super. 562, is relied on as authority in support of its admission. This is a novel way to seek to sustain a cause of action. If such a letter is admissible without qualifications, a suitor could have his attorney send in letter form to his adversary a statement of facts, true or untrue, setting forth a complete claim, and, on receipt of an answer, have the letter admitted in evidence as substantive proof of the claim, or, in case of failure to reply, also admit the letter. See Wigmore, section 1073.
The rule that self-serving declarations, made by a party to an action before suit is brought, whether verbal or written, are inadmissible when offered on behalf of the party who made them, is established by an unbroken line of decisions: Craig v. Craig, 5 Rawle 91; Fraley v. Bishpham, 10 Pa. 320; Beach v. Wheeler, 24 Pa. 212; Cleven v. Hilberry, 116 Pa. 431; Dempsey v. Dobson, 174 Pa. 122; Kann v. Bennett, 223 Pa. 36. In Dempsey v. Dobson, supra, it was said: We have repeatedly held that a paragraph of a statement of claim denied in the affidavit of defense is not admissible in evidence, that the plaintiff, by competent evidence, must prove his case to sustain his statement; but here we have a letter, which, if competent according to the ruling of the court below, would step in and render the above rules meaningless. The letter was clearly a self-serving declaration and should not have been admitted. The case referred to in the Superior Court and the case on which that case relied as authority, Crossgrove v. Himmelrich, 54 Pa. 203, 208, do not sustain appellee's contention; the letters were there admitted to show demands and nothing more. The letter in the case at bar was competent only to show a demand, and it should not have been read to the jury; the mere fact of the demand alone should have been stated. See Chapin v. Cambria Iron Co., 145 Pa. 478.
Appellee was permitted to show as against the written contract that at the time he signed the power "he believed," "he was led to believe," from what was stated to him "that it was distinctly understood that they would not sell any shares of his stock without giving him plenty of notice to put up collateral." He never stated this belief to the other party. These conclusions would not only have had the effect of varying the terms of the writing, but would have entirely negatived the contract, since permission to sell without notice was the most important element in it. We have repeatedly held that in the absence of fraud accident or mistake a contract cannot be varied by parol evidence: Crelier v. Mackey, 243 Pa. 363, 366; Gianni v. Russell, 281 Pa. 320; First Nat. Bank of Hooversville v. Sagerson, 283 Pa. 406; and Int. Fuel Serv. Corp. v. Stearns, 304 Pa. 157. This evidence was inadmissible to vary or...
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