E. A. Pierce & Co. v. Aronoff

60 S.W.2d 796, 1933 Tex. App. LEXIS 736
CourtCourt of Appeals of Texas
DecidedMay 4, 1933
DocketNo. 2824
StatusPublished
Cited by1 cases

This text of 60 S.W.2d 796 (E. A. Pierce & Co. v. Aronoff) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E. A. Pierce & Co. v. Aronoff, 60 S.W.2d 796, 1933 Tex. App. LEXIS 736 (Tex. Ct. App. 1933).

Opinions

HIGGINS, Justice.

E. A. Pierce & Co. are brokers upon the New York stock exchange and have a branch office in the city of Dallas. E. O. Cartwright was connected with the Dallas office and represented Pierce & Co. in executing an order given by appellee, Aronoff, for the purchase of 200 shares of Fox Theatre “A” stock, out of which transaction the present controversy arose. For some time prior to such purchase Aronoff had been a customer of Pierce & Co., which held certain securities belonging to Aronoff to secure the payment of any indebtedness incurred by him. These securities were some Wheeling Steel bonds, 200 shares of Pierce Petroleum stock, 50 shares of American Sugar Refining Company stock, and 200 shares of Fox Theatre “A” stock. On January 7, 1929, Pierce & Co. purchased 200 shares more of Fox Theatre “A” stock, and charged the purchase price to Aronoff’s account. Aronoff refused to accept the stock and pay therefor.

Prior thereto Aronoff, on June 28, 1928, had, in writing, agreed with Pierce & Co. that all transactions were subject to the rules, regulations, and customs of the exchange or market where executed, and that Pierce & Co., whenever deemed by it necessary for its protection, might sell any hypothecated securities without notice, in order to close out Aronoff’s account.

This suit was brought by Aronoff against E. A. Pierce & Co., a partnership, and the individuals composing the same. Briefly stated the allegations of the petition are to the following effect:

On January 5, 1929, and for some months prior thereto, plaintiff was a customer of defendants, buying and selling various securities through them. On said date he had on deposit with defendants, as collateral to secure any balance which might be due by him to defendants, the Wheeling Steel bonds, American Sugar Refining Company stock, and 200 shares of Fox Theatre “A” stock, above mentioned, and on April 24, 1929, he also had on deposit the 200 shares of Pierce Petroleum stock above mentioned.

On or about the 7th or Sth of January, 1929, defendant, without authority from plaintiff, purchased and charged to his account 200 shares of Fox Theatre “A” stock, at $36.87½ per share, debiting defendant’s account therefor with $7,405, which included $30 commission, and mailed a notice of such purchase to plaintiff, which he received January 14, 1929. On receipt of such notice plaintiff immediately notified defendants that he had not authorized such purchase and refused to accept the stock or ratify the charge against his account. Notwithstanding such notice defendants continued to maintain said debit of $7,405 against plaintiff and charged him interest thereon until April 23, 1929, when, without notice to or authorization from plaintiff, the defendants sold said 200 shares of Fox stock as on account of plaintiff for $29.12½ per share, crediting plaintiff’s account with $5,787, and on April 24, 1929, sold plaintiff’s Wheeling Steel bonds, crediting-plaintiff’s account with the proceeds thereof in the sum of $2,590.13, and on demand of plaintiff refused to surrender to him the above-mentioned American Sugar Refining stock, Pierce Petroleum Company stock, and the 200 shares of Fox Theatre “A” stock, which latter stock was purchased by plaintiff on December 31, 1928, and on January 5, 1929, unless and until plaintiff would pay to defendants the sum of $4,58S.84 claimed by defendants as the balance due by plaintiff. Said balance included the purchase price of the 200 shares of Fox Theatre “A” stock wrongfully purchased for plaintiff’s account on January S, 1929, plus the commission and interest to April 24, 1929.

On April 24th, when defendants demanded payment of said $4,588.84, and on April 25, 1929, when plaintiff paid said sum to defendants, his true indebtedness to defendants did not exceed $2,572.94, but, because of the then threatened sale by defendants of plaintiff’s securities above mentioned, plaintiff was compelled to and did on April 25, 1929, pay. under protest, said $4,588.84 in order to secure delivery to him of his remaining stock in the hands of defendant and belonging to him.

Plaintiff never at any time ordered, claimed, or authorized the purchase or sale of the disputed 200 shares of Fox Theatre “A” stock. Plaintiff did not at any time authorize or become liable to incur sale by defendants of his Wheeling’ Steel bonds in liquidation of his indebtedness to defendants.

Plaintiff set up further that, because of the unauthorized and unlawful acts and conversion of Ms property by defendants and extortion from him of said excess payment, made because of the duress on his property, and threatened sale thereof, he had been damaged in the sum of $2,133.38. This sum is composed of the following items:. $198.03, representing interest charged on the debit item of $7,405; the sum of $1,618 representing the difference between the debit item of $7,405 and the credit 'item of $5,787; the sum of $199.87, representing the difference between the sale price of the Wheeling Steel bonds, which sale price was $2,590.12, and [798]*798the sum of $2,790, the value of said bonds, at the date of the alleged conversion thereof; and the sum of $117.48, interest on said amounts.

The prayer was for judgment for the plaintiff’s damages as above indicated.

Defendants answered by general denial and special plea setting up the following: The agreement of June 28, 1928, above mentioned. Subsequent to January 8, 1929, plaintiff confirmed the purchase of the 200 shares of Fox Theatre “A” stock which he complained of and thereafter closed out his account and authorized defendants to do the things complained of. That he authorized one Lomax to act as his agent to close out his account and paid defendants the sum of $4,588.84 to cover the balance due defendants, and requested defendants to have issued in plaintiff’s name, and forwarded to the Republic National Bank at Dallas, the 50 shares of American Sugar Refining stock, 200 shares of Fox Theatre “A” stock, and 200 shares of Pierce Petroleum. Plaintiff authorized the sale complained of through his agent Lomax and confirmed the acts of his agent at the time the same was made. Defendants relied upon the act of said agent in closing out plaintiff’s account and on the acts and instructions of plaintiff in ordering the sale made, and plaintiff at all times recognized the validity of said transactions. That on or about January 8, 1929, plaintiff called defendants and placed an open order to purchase for his account 200 shares of Fox The-atre “A” stock*, which order was executed in accordance with the agreement between them and in accordance with the universal and notorious custom among brokers in Dallas, New York City, and elsewhere. Defendants used all the care and diligence required of them, and executed the order in the usual and customary way. Plaintiff was experienced in trading stocks, and knew, or should have known, the universal and notorious custom and manner of handling the purchase and sale of stocks, and knew the order would be executed in the manner it was executed, and knew the account would be handled in accordance with the custom among brokers at the points mentioned. After the stock had been purchased plaintiff told defendants the same should not be charged to his account; that he. had ordered it purchased for one Paul Berwald. Defendants informed plaintiff the stock had been purchased in accordance with the universal custom existing among brokers, and plaintiff agreed to keep the stock and put up any additional margin defendants might require.

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Bluebook (online)
60 S.W.2d 796, 1933 Tex. App. LEXIS 736, Counsel Stack Legal Research, https://law.counselstack.com/opinion/e-a-pierce-co-v-aronoff-texapp-1933.