Russell v. Bond & Goodwin, Inc.
| Decision Date | 11 September 1931 |
| Citation | 177 N.E. 627,276 Mass. 458 |
| Parties | RUSSELL v. BOND & GOODWIN, Inc. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Report from Superior Court, Suffolk County; J. D. McLaughlin, Judge.
Action by C. Junior Russell against Bond & Goodwin, Inc., with trustee process. On report from the superior court.
Judgment for defendant.
Robert E. Marshall, of Worcester, for plaintiff.
Ropes, Gray, Boyden & Perkins, of Boston (E. R. Dewing and E. B. Conway, both of Boston, of counsel), for defendant.
This is an action of contract or tort brought in the superior court to recover from the defendant, a corporation engaged in the business of selling investment securities, the proceeds, with interest, of a check for $3,120 signed by the plaintiff and collected by the defendant. The case was heard on an agreed statement of facts by a judge, sitting without jury, who found for the plaintiff in the sum of $3,336.84 and ordered judgment therefor. The case is reported to this court at the request of the parties upon their agreement ‘that if upon the facts stated * * * the plaintiff was entitled to a finding * * * there should be judgment in the amount of $3336.84 and costs; otherwise judgment to be entered for the defendant.’
The plaintiff was not entited to a finding upon the facts stated.
The plaintiff requested one Glass, the ‘statistical manager’ of a trust company, to buy for him fifteen shares of a certain corporate stock. Glass ordered fifty-five shares of this stock from the defendant, but did not inform the defendant that he was ordering any of it for the plaintiff and the defendant charged the fifty-five shares to the account of Glass. The plaintiff did not know that Glass had ordered more than fifteen shares. Upon receiving a statement from the defendant of the amount due for the fifty-five shares Glass notified the plaintiff that he had secured the stock. The plaintiff then delivered to Glass his check in blank and instructed Glass to fill in the name of the person or corporation from which he had ordered the stock and the amount which was due for the fifteen shares and have the stock certificate sent to the plaintiff. Glass filled in the name of the defendant as payee and the amount due the defendant for fifteen shares and forwarded the check to the defendant with a letter in which he stated that the check was ‘in payment of fifteen shares' of the stock in question, that they represented part of the fifty-five shares purchased and that as the could not ‘handle all of this' himself he had sold fifteen shares to the plaintiff. By this letter Glass requested the defendant to register the fifteen shares in the name of the plaintiff and to send a receipted bill therefor and a new bill for the forty shares unpaid for. The defendant credited this check to the account of Glass, but did not have any shares of stock registered in the name of the plaintiff and continued to hold the fifty-five shares as collateral security for the general account of Glass. The defendant acknowledged the receipt of the check and letter and sent to Glass a statement showing the balance due on the purchase of fifty-five shares.
After the transaction above described the plaintiff endeavored to ascertain from Glass why he had not received the fifteen shares of stock, but was unable to obtain any information. Glass, however, by letter, inquired of the defendant why a certificate of fifteen shares had not been received by the plaintiff and was informed by letter that the transfer had not been made because payment for the other shares had not been received. Thereafter the plaintiff wrote to the defendant, stating that he had bought fifteen shares of the stock in question from the defendant through Glass and that his check in payment therefor had been sent to the defendant, and requesting that the certificate be sent to him. The defendant replied by letter that it had no record of any transaction with him and inclosed a copy of its letter to Glass. The plaintiff then, for the first time, learned that Glass had ordered more than fifteen shares. He wrote to the defendant calling attention to the fact that the check was his check, and not that of Glass, and that the stock was purchased for him and was to be delivered to him, and requesting delivery of fifteen shares of stock. The defendant made no reply and did not offer to deliver the stock or to return the proceeds of the check.
The parties agreed that ‘it is a custom of the investment security trade that a brokerage concern selling securities retains all securities in a specific sale or order as collateral security for the payment of the amount due to said concern on such sale or order, refraining from transferring any part or the whole of the same until the entire sale or order is paid for.’
There was no contract between the plaintiff and the defendant for the purchase and sale of any shares of the stock in question. The contract originally made between Glass and the defendant was an indivisible contract for the purchase by Glass and the sale by the defendant of fifty-five shares. Glass had no power as agent of the plaintiff to bind him by such a contract. The plaintiff, therefore, had no right thereunder as against the defendant before the transmission of his check to the defendant by Glass, as an inclosure, in the letter requesting that fifteen shares be registered in the name of the plaintiff.
By transmitting the check to the defendant, with the accompanying letter, Glass purported to make a payment on account of his contract to buy fifty-five shares of stock and not to make an independent offer to buy fifteen shares. Under the contract payment by Glass for fifty-five shares and delivery by the defendant of that number of shares were concurrent conditions. We need not consider whether the custom of brokers selling securities to retain all securities in a specific sale as collateral security for the amount due on such sale until the purchase price is fully paid was an unexpressed term of the contract between Glass and the defendant (see Barrie v. Quinby, 206 Mass. 259, 264-265, 92 N. E. 451), for even apart from such a custom the defendant was not bound to make part delivery upon receipt of part payment. Since the contract was indivisible Glass had no right, without the assent of the defendant, to have the payment applied to...
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Leonard v. Woodward
...G.L.(Ter.Ed.) c. 107, § 75; Liberty Trust Co. v. Tilton, 217 Mass. 462, 463, 105 N.E. 605, L.R.A.1915B, 144;Russell v. Bond & Goodwin, Inc., 276 Mass. 458, 463, 177 N.E. 627;Karlsberg v. Frank, 282 Mass. 94, 95, 184 N.E. 387. Evidence that the plaintiff's intestate and Emery ‘understood’ th......
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Elbar Realty, Inc. v. City Bank & Trust Co.
...(although an 'investigation * * * would have shown * * * [fraud, the holder was] not bound to make' one); Russell v. Bond & Goodwin Inc., 276 Mass. 458, 463-464, 177 N.E. 627, 629 ('Suspicion * * * was not the equivalent of knowledge which would show bad faith'); Standard Acceptance Corp. v......
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Leonard v. Woodward
...may be a holder in due course, G.L. (Ter. Ed.) c. 107, Section 75. Liberty Trust Co. v. Tilton, 217 Mass. 462 , 463. Russell v. Bond & Goodwin Inc. 276 Mass. 458, 463. Karlsberg v. Frank, 282 Mass. 94 , 95. Evidence that the plaintiff's intestate and Emery "understood" that the defendant wo......
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Proctor v. Norris
...had a right to it (McLaughlin v. Paine Furniture Co., 245 Mass. 377, 139 N. E. 542, and cases cited; see, also, Russell v. Bond & Goodwin, Inc., 276 Mass. 458, 177 N. E. 627); from those in which the person taking a corporate check in payment of the private debt of the treasurer was not the......