Harris v. Friedman

• Decision Date: 01 June 1923
• Citation: 139 N.E. 788,245 Mass. 479
• Parties: HARRIS et al. v. FRIEDMAN et al. FRIEDMAN v. HARRIS et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

245 Mass. 479

139 N.E. 788

HARRIS et al.

v.FRIEDMAN et al.

FRIEDMAN

v.HARRIS et al.

Supreme Judicial Court of Massachusetts, Suffolk.

June 1, 1923.

Report from Superior Court, Suffolk County; Marcus Morton, Judge.

Cross-actions on contract by George B. Harris and others against Simon Friedman and trustee, and by Simon Friedman against George B. Harris and others, tried together before a jury. Verdict ordered for plaintiffs in the first case, and for defendants in the second case, on the auditor's report, and cases reported to the Supreme Judicial Court. Judgment directed in each case on the verdict.

R. G. Dodge and H. K. Rising, both of Boston, for Blake bros. & co.

William Reed Bigelow and Samuel Markell, both of Boston, for Friedman.

DE COURCY, J.

The plaintiffs in the first case, constituting the firm of Blake Bros. & Co., stockbrokers (herein referred to as the plaintiffs), seek to recover from their customer, Friedman (referred to hereafter as the defendant), the balance alleged to be due on his margin account with them. In the crossaction Friedman sues to recover from the brokers a sum representing the securities and cash he had deposited with them, on the ground that they had failed to make actual purchases and sales on his orders, and to carry the securities for him in accordance with their alleged contract. The cases were tried together. The only evidence introduced in the superior court was the auditor's report; and verdicts were ordered in each case for the brokers, in accordance with the auditor's findings.

The auditor found:

‘When Friedman employed the brokers to make purchases and sales as above set forth, there was nothing said between him and the brokers other than his request to them to make such purchases and sales.’

His report further states:

‘There were 46 different orders for the purchase or sale of stocks given by Friedman to the brokers. I find that all orders for the purchase of stocks so given by Friedman were duly executed by the brokers, and certificates for the stocks purchased were duly received by the brokers. I find that all orders for sales of stocks given by Friedman to the brokers were executed by the brokers, and the certificates of stocks delivered by the brokers in pursuance of such sales were, with the exceptions hereinafter noted, either the identical certificates which had been purchased by them for Friedman's account or certificates into which such certificates originally purchased had been converted.’

In case of dividend-paying stocks, if dividend days were approaching, new certificates in the name of the brokers were obtained through the transfer offices.

‘The said identical certificates purchased or the certificates into which some of them had been transferred, as above stated, from the time of purchase to the time of sale were always within the actual possession or control of the brokers.’

When, in the ordinary course of business, some of the certificates were pledged with banks, it was always under agreements giving the brokers the right to withdraw them by substituting other collateral. And the auditor expressly finds that the brokers--

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