Klein v. Munson
| Decision Date | 09 July 1930 |
| Citation | 151 A. 177,111 Conn. 709 |
| Court | Connecticut Supreme Court |
| Parties | KLEIN v. MUNSON. |
Appeal from City Court of New Haven; Walter M. Pickett, Acting Judge.
Action by Arthur Klein against H. E. Munson to recover damages for breach of contract for sale of stock. Judgment for defendant and plaintiff appeals.
Error and judgment reversed, with directions.
David M. Reilly and Samuel M. Silver, both of New Haven, for appellant.
Walter J. Walsh and John J. Sullivan, Jr., both of New Haven, for appellee.
Argued before WHEELER, C.J., and MALTBIE, HAINES, HINMAN, and BANKS JJ.
The decision turns upon a comparatively simple point. What was the contract made by the plaintiff with the defendant, a stockbroker, in the sale to the plaintiff of the two hundred shares of stock ordered by him from the defendant at the solicitation of defendant's agent?
The order of the plaintiff was that payment for and delivery of the stock was to be by " sight draft against payment" upon delivery of the stock to the Mechanics' Bank in New Haven within a reasonable time. A sight draft is a bill of exchange for the immediate collection of money. " Against payment" meant for collection. The agreement called for the delivery by the defendant to the Mechanics' Bank of this stock, sight drafts attached to the same for collection; it was the duty of the bank to collect the draft from the plaintiff drawee, and, upon his payment of the draft, to deliver to him the certificates for this stock. In the collection of this draft and the delivery of the stock, the bank would be acting as the agent of the drawer of the draft, the defendant. The trial court was mistaken in holding that the bank would be the agent of the plaintiff throughout this transaction. Gleason v. Thayer, 87 Conn. 248, 250, 87 A. 790, Ann.Cas. 1915B, 1069; Blue Ribbon Garage v. Baldwin, 91 Conn. 674, 679, 101 A. 83.
The defendant was bound to deliver the stock to the bank as required by the contract. General Statutes, § § 4707, 4709. Since the defendant by the contract agreed to designate the bank as its agent for collection of the draft, the custom of the bank in making collection of drafts became a necessary part of its contract. New York, N.H. & H. R. Co. v. First National Bank, 105 Conn. 33, 38, 40, 134 A. 223, 225. Its custom was to notify the drawee that the bank held for collection a draft drawn upon him. Such notification would give the drawee the opportunity to examine the draft, verify its amount, and inspect the certificates of stock to see if they were in due form and represented the correct number of shares, before paying the draft. The plaintiff was entitled under his contract to receive such a notice and to have such a presentment made to him before he paid the draft. In the absence of a specific provision controlling the matter, the drawee of a draft payable at sight is entitled to notice and demand. Randolph on Commercial Paper (2d Ed.) vol. 2, § 1070.
The defendant stockbroker must be presumed to have known the meaning of the contract he had made with the plaintiff; that he did understand it is apparent from his two written orders to his brokers, Winslow, Day & Stoddard, from whom he purchased this stock, which recite in each order that they were to " deliver to order of Mechanics Bank account of Arthur Klein draft attached" at a stated price per share 100 shares of a designated stock. Instead of carrying out these written instructions, these brokers on two occasions sent certificates for 100 shares of this stock to the bank for the plaintiff's account, and attached to these a delivery slip, receipt, and a bill or invoice. The officer of the bank to whom the messenger presented these refused to accept the stock and pay for it, as the plaintiff had not so instructed the bank to do. The plaintiff did not know that the defendant had purchased this stock from these brokers, nor did he know that they had attempted to make delivery of it to the bank. The failure of the brokers to comply with the instructions of their customer, the defendant, in making delivery of the stock, was a manifest breach of their duty under their contract with the defendant and, as a consequence of their failure, the defendant breached his contract with the plaintiff. Had the brokers carried out the defendant's instructions, the bank would in due course...
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IN RE MIDDLETOWN PACKING COMPANY
...property of the debtor. In the collection of the sight draft, the bank was acting as agent of M & G and not of the debtor. Klein v. Munson, 111 Conn. 709, 151 A. 177. There is no basis for arguing that because the bank may ultimately be held liable to M & G for its own negligence in failing......
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Rabe v. Danaher
...The delivery of the stock certificates to the bank, sight drafts attached, was a delivery to the plaintiffs' own agent. Klein v. Munson, 111 Conn. 709, 151 A. 177. The plaintiffs retained actual possession and control of the stock certificates and a lien for the price, and the defendant at ......
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Staff v. Hawkins.
...389, 200 A. 334. The plaintiff claims, however, that the exhibits made a part of the finding contradict it and control. Klein v. Munson, 111 Conn. 709, 714, 151 A. 177. They consisted of two maps, one filed by each party, and an abstract of title admitted by consent ‘in lieu of deeds referr......
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Utley v. Nolan.
...correctness of the trial court's ruling on the demurrer. See Cleveland Co. v. Chittenden, 81 Conn. 667, 668, 71 A. 935; Klein v. Munson, 111 Conn. 709, 714, 151 A. 177. The defense of the Statute of Frauds was properly raised by demurrer. DiBlasi v. DiBlasi, 114 Conn. 539, 542, 159 A. 477. ......