Miller v. Stieglitz

• Decision Date: 12 April 1934
• Docket Number: No. 87.,87.
• Parties: MILLER v. STIEGLITZ et al.
• Court: New Jersey Supreme Court

172 A. 57

MILLER

v. STIEGLITZ et al.

No. 87.

Court of Errors and Appeals of New Jersey.

April 12, 1934.

Appeal from Supreme Court.

Action by Julia B. Lowy Miller against Albert Stieglitz and others, doing business under the name of Halle & Stieglitz. From a judgment on a directed verdict, plaintiff appeals.

Reversed.

See, also, 109 N. J. Law, 138, 160 A. 543; 168 A. 839, 11 N. J. Misc. 927.

Samuel Press, of Newark, for appellant.

Nathaniel Weltchek, of Elizabeth, for respondents.

HEHER, Justice.

Plaintiff sued to recover the sum paid the defendant stockbrokerage firm as the purchase price of 33 1/3 undelivered shares of the common capital stock of the Tung-Sol Lamp Works, Inc. A verdict was directed for defendants, and this ruling is assigned as error.

The trial judge based his action upon plaintiff's testimony that she accepted 33 1/3 shares of preferred stock of the above-named corporation, in lieu of the undelivered common stock. But he manifestly misconceived the situation. While this seems to be the fact, it did not, for the reasons to be stated, dispose of the claim asserted.

There was evidence tending to establish the following matters of fact:

Plaintiff's account with defendants was in the name of her husband, Herman Miller, now deceased. Defendants were aware that it was her account. She testified that it was opened in her husband's name at the insistence of defendants. The parties stipulated that the "trial proceed upon the theory that the account * * * belonged to her." On June 13, 1929, plaintiff ordered 100 shares of Tung-Sol common stock. Defendants knew that the order came from plaintiff, and understood that the certificate was to be issued in her name, and delivered to her husband. On July 3, 1920, defendants acquired stock of the Tung-Sol Corporation, and proceeded to execute plaintiff's order. Certificates for 66 2/3 shares of common stock of the corporation, and 33 1/3 shares of its preferred, issued in the name of plaintiff, were delivered to her husband, and the price thereof charged to her account, which, at the time, had a credit balance in excess of the purchase price. The preferred stock, so defendants claimed, was the property of another, and was delivered to plaintiff by mistake.

At this point there is a marked divergence in the evidence. Plaintiff testified that, shortly after the delivery of these certificates, she called defendants' attention to the error, and insisted upon a delivery in compliance with her contract, but was persuaded by defendants to retain the preferred stock in lieu of the undelivered common. Defendants maintain that in October, 1929, they demanded a return of the preferred stock certificate. This demand was made upon plaintiff's husband. It is conceded that the demand was not accompanied by a tender of the certificate for the undelivered common stock, and that no tender thereof was made until April, 1931, during the trial of an action instituted against defendants by plaintiff's husband, to recover the sum charged to plaintiff's account with defendants, standing in his name, representing the price of 33 1/3 shares of Tung-Sol preferred stock purchased by defendants in the open market, after the alleged refusal of plaintiff's husband to return the preferred stock said to have been delivered by mistake. The certificate then tendered was dated December 30, 1930, and was issued in the name of plaintiff's husband. The tender was rejected, and the certificate was deposited with the clerk of the court below, where it now reposes.

A member of the defendant brokerage firm, called as a witness by plaintiff, testified: "The reason that this certificate is dated December 30, 1930, is that at this time, (after) repeated efforts and requests on our part for the return of 33% preferred, which was delivered in error, we finally notified Mr. Miller that unless the stock was returned to us on a certain date we would purchase 33% for his account, which we did. Then in order to clear up the account we had transferred to Mr. Miller's name 33% shares of common stock, which we had in our possession at all times awaiting the return of the 33% shares of preferred, and that is the reason for the discrepancy in this certificate." This witness further testified that the error in the delivery of the stock to plaintiff was discovered in August, 1929, but he did not call it to Mr. Miller's attention until October, 1929, when its return was demanded. And, in passing, it should be observed that there was evidence tending to contradict the statement of the witness that these undelivered shares of common stock were in defendants' possession from the time of the delivery of the abovementioned certificates to her, and were retained by defendants awaiting the return of the preferred stock certificate.

The trial judge, in concluding that plaintiff had no right of action, in view of her own testimony that she accepted the preferred shares in lieu of the undelivered common stock, overlooked the fact that she had paid for both the preferred and common stock, and the circumstance that, if her testimony be accepted, she was not required to retain and pay for the two classes of stock. If she had agreed to accept the preferred in lieu of the common stock, it is obvious that she was not obliged to accept and pay the price of the undelivered shares of the latter class. And yet this, in effect, was the trial judge's ruling. She had paid for both classes of stock. Her account concededly had been charged with the price of each.

Moreover, there was evidence tending to establish a default on the part of defendants in the performance of the contract in...