A. M. Kidder & Co. v. Turner

• Decision Date: 17 October 1958
• Citation: 106 So.2d 905,71 A.L.R.2d 1083
• Parties: A. M. KIDDER & CO., a Delaware corporation, Appellant, v. Benjamin W. TURNER, Appellee.
• Court: Florida Supreme Court

Page 905

106 So.2d 905

71 A.L.R.2d 1083

A. M. KIDDER & CO., a Delaware corporation, Appellant, v. Benjamin W. TURNER, Appellee.

Supreme Court of Florida.

Oct. 17, 1958.

Rehearing Denied Dec. 16, 1958.

Paul C. Taylor and Hendricks & Hendricks, Miami, for appellant.

Starr W. Horton, Miami, for appellee.

HOBSON, Justice.

This is an appeal from a final judgment of the Circuit Court of Dade County, which judgment was predicated upon a verdict of a jury in an action by appellant against appellee.

The complaint alleged that on November 15, 1954, the appellee placed an 'open' order, effective until cancelled, to sell 25,000 shares of Riddle Airlines stock at $0.45 per share, through an agent of appellant stock brokerage firm. On March 30, 1955, appellant sold 12,500 shares at $0.45 and on March 31, 1955, 12,500 shares at $0.48. On April 5, 1955, appellant requested delivery but appellee failed and refused to deliver the stock. Sale of 2,500 shares was cancelled, but appellant purchased 22,500 shares at a cost of $70,259.74 for which it received $11,120.79, leaving $59,138.95 which it demanded from appellee.

Appellee's answer admitted placing an order to sell and not cancelling the same, but denied it was an 'open' order in effect until cancelled. He also admitted the sale, but denied he was immediately thereafter notified of it. Finally he admitted refusal to deliver the stock, but denied knowledge of appellant's purchases and denied liability for any loss.

The answer further asserted six affirmative defenses. Those pertinent to this appeal are: Appellant was estopped by its knowledge that another broker also was authorized to sell the stock; appellant, with knowledge that appellee was on an ocean cruise at the time of the sale, did not carry through on its attempt to contact him; and appellant was estopped by knowledge of appellee's inexperience in dealing with stockbrokers.

The record discloses that appellant, through its agent, a Mr. Delin, prior to the instant transaction, sold 100 shares of insurance stock for the appellee. Before the consummation of this sale Delin called the appellee to confirm his ownership of the 100 shares and appellee's continued desire to sell.

There was testimony that Mr. Delin called appellee's office several times during the week of March 28, 1955, which was immediately prior to the first sale of the Riddle stock. On each occasion he was advised that appellee was on an ocean cruise and would not return until April 5th. Prior to the first sale of the Riddle stock on March 30, 1955, Delin again telephoned appellee's office. During this conversation appellee's secretary advised Mr. Delin that appellee could be reached by ship to shore telephone if the matter was urgent.

The first issue raised is that the trial court erred in denying appellant's motion to strike appellee's affirmative defenses. This motion was not ruled on until after all the evidence had been presented and both parties rested.

The rule has been well stated that a motion to strike a defense should not be granted where the defense presents a bona fide question of fact. Meadows v. Edwards, Fla.1955, 82 So.2d 733, 735; Talarowski v. Pennsylvania Railroad Co., D.C.Del.1955, 135 F.Supp. 503; Wilkinson v. Feild, D.C.Ark.1952, 108 F.Supp. 541.

The record contains sufficient evidence to support the trial court's denial of appellant's motion to strike affirmative defenses.

With reference to the court's denial of appellant's motion for a directed verdict, the pivotal point is whether, as a matter of law, the agreement between the parties constituted an 'open' order 'good until cancelled' by the appellee. Appellant asserted that the appellee was bound to such agreement by virtue of the signature card signed by appellee on November 11, 1954, a November 18, 1954, confirmation letter sent to the appellee by appellant's agent Delin, and/or the notices printed on the confirmation slips which were mailed to appellee on at least four occasions.

The record discloses that the signature card merely requests the customer to affix his signature for identification purposes. It also authorizes the company to telephone the client at his home telephone number. The signature card makes no reference to the terms of any agreement between the parties.

The November 18th confirmation letter was sent by Mr. Delin to appellee acknowledging his order to sell the Riddle stock. Said letter also confirmed the understanding that the appellee was to pay appellant 2 1/2cents per share commission if the sale was consummated. However, this letter did not, either expressly or by implication, inform appellee that his order was an 'open' order or that it was an order 'good until cancelled'. Thus we see that neither the signature card nor the letter obligated the appellee to an 'open' order 'good until cancelled'.

With reference to the confirmation slips, evidence was introduced which disclosed that subsequent to November 15, 1954, and prior to March 30, 1955, appellee was mailed, at least, four monthly confirmation forms. These printed slips bore the following pertinent legends:

'We have The Following Orders From You Good Until Cancelled (Printed)

Sell (Printed)

25,000 Riddle Airline (Typed)

.45 less 2 1/2 cents (Typed)

If Not Correct, Please Advise Immediately (Printed)

Notice: Clients are cautioned to exercise great care to the end that all existing 'good until countermanded' orders are cancelled before entering new orders affecting the same. Please be advised that we are not responsible for losses or errors due to failure to comply with the above. (Printed in bold type.)

A. M. Kidder & Co.'

Appellee admitted receiving and reading at least one of these form notices.

It is the practice of brokers to print at the foot of confirmation slips, which they send their clients at regular intervals, the conditions upon which the customers' accounts are carried.

In cases such as the instant one, where the broker has not taken the precaution to obtain the customer's signature to an express agreement, the question arises whether the printed conditions on the confirmation slips constitute a contract between the parties predicated upon the customer's acceptance by acquiescence. Although such printed conditions may constitute a contract, whether they do or do not in a particular case is a question of fact for the jury. Thompson v. Baily, 1917, 220 N.Y. 471, 116 N.E. 387; Fisher v. Dinneen, 1932, 161 Md. 605, 158 A. 9; Keller v. Halsey, 1911, 202 N.Y. 588, 95 N.E. 634; Land Oberoesterreich v. Gude, 2 Cir., 1940, 109 F.2d 635.

In Meyer on Stock Brokers and Stock Exchanges, § 109, beginning at page 440, we find the following significant language:

'Lacking as it does the customer's express assent, and relying for his acceptance on his silence, the confirmation (slip) cannot be deemed to constitute his binding promise unless it is deemed an expression of his intention when viewed in the light of all the circumstances. In determining whether or not it constitutes a contractual obligation there must first be considered all arrangements and all communications, both oral and written, which have passed between the parties with respect to the subject matter covered by the printed conditions. * *'

and at page 441:

'If the parties have no understanding, the jury may consider all of the facts and circumstances relating to the customer's account and to the transactions in controversy. These facts and circumstances include the length of time the account has been open, the number of confirmations which the customer has received, the practice of the broker in actually making demands for margin or giving notices of...