Monroe v. Peck

3 Daly 128

• Court: New York Court of Common Pleas
• Decided: December 15, 1869
• Status: Published

Opinion

Daly, F. J.

The agreement, as proved by the two witnesses which the plaintiff' called, and by the defendant, was, that if the plaintiff would purchase the stock and hold it for thirty days, the defendant, in the language of the plaintiff’s witness. Gregory, would pay all loss, and divide the profits. The plaintiff adds, “he was to insure me against loss or decline y ” but that by the word decline he meant loss, appears from the previous part of his testimony, in which he says, “ he,” the defendant, “ would insure me against loss, to pay the difference in the decline;” as well as from the two witnesses whom the plaintiff called, and who heard what was said. How, no loss was, or could be, sustained by the plaintiff, until the stock was actually sold, which was long after the thirty days; and what that loss was is not disclosed, as the judge, for what reason does not appear, would not allow the defendant to show what the stock was finally sold for. The plaintiff has recovered upon the hypothesis that his loss was the market value of the stock at the expiration of the thirty days, though he did not sell it at that time, nor until a long time afterwards; and that, by not selling it then, but holding it, he was to be regarded as holding it after the thirty days at his own future risk. This view of the rights of the parties cannot, in my judgment, be sustained. He had the right to sell it when the thirty days were up, and close the transaction; but he did not do so. It is to be assumed that he deferred the sale of it in the expectation that it would rise beyond what was paid for it; for if sold at the end of thirty days, he would be indemnified against loss, but gain nothing by the transaction. By the construction given to the contract by the defendant, the plaintiff would have everything to gain and nothing to lose, unless thstock went below the market price of it at the expiration of the thirty days. If the defendant’s liability was fixed by the market value of it at the time, and it should afterwards sell for anything beyond that, the plaintiff would gain the whole of it. He could incur no risk, except by its further depreciation; and that risk he might be very willing to run, in the expectation that it would rise, with the advantage of having the exclusive benefit of that rise. The more just construction therefore is, in my judgment, to hold that the transaction was not closed until the stock was sold ; that no loss was incurred until it was actually sold ; that if it was, at the time of sale, sold for less than it could have been sold for at the end of the thirty days, the defendant was not answerable for that excess, as it would have arisen from the plaintiff’s neglect to bring the transaction to a close at the end of the thirty days; and if it sold for more than had been paid for it, then there was no loss, but a profit, which, by the terms of the contract, was to be equally divided'. If the plaintiff desired to bring the transaction to a close at the end of the thirty days, he should have sold the stock at once, or else notified the defendant that he desired, for his, the plaintiff’s benefit, to hold it longer, in expectation of a rise; and if the defendant assented, he would be regarded as taking the risk of its rising or falling thereafter, until he notified the plaintiff to sell. The plaintiff did not do this. Without consulting the defendant, he kept the transaction open; and if, as the testimony would lead me to infer, the stock had risen when it was actually sold, so as to involve an actual loss only of $150, instead of $346, the amount for which judgment was given; the $150 was the amount for which the defendant was answerable, as the ultimate result of the mercantile adventure, and I therefore think that the judgment should be reversed.

Judgment reversed.