Woltz v. E. F. Hutton & Co.

SHAW, J.

Action for the alleged conversion by defendants of certain oil stock owned by plaintiff.

Plaintiff had judgment, fro-m which defendants appeal.

It appears that at the times in question defendants were engaged in the business of stock brokers, having offices in. both the city of Los Angeles and the city of New York; that prior to August 7, 1919, they had, in acting for plaintiff, bought and sold stock for his account, as a result of which he on August 7th had on deposit with defendants the sum of $850, at which time he gave to defendants, at their Los Angeles office, a written order to buy for him fifty shares of Mexican Petroleum stock at the market price; that this order, containing a provsion that “it is understood and agreed that all purchases and sales made by us for you are subject to the rules, regulations and customs of the Exchange or Board of Trade where order is executed,” was given by plaintiff to defendants’ telephone operator, who immediately transmitted the same by wire to defendants’ New York office, which executed with the sellers, Carlisle, Mellick & Company, who were New York stock brokers, a contract for the purchase at $181 per share; that the execution of the order in accordance with his instructions was promptly reported to plaintiff; that later, on the same day, defendants’ manager, upon learning of the matter, notified plaintiff that the acceptance of the order was a mistake, for the reason that the margin deposited was insufficient to protect so large a deal, and demanded an additional deposit of $1,000, which plaintiff refused to make; that thereupon the manager told plaintiff they would sell the stock, and immediately, through defendants’ New York office, sold the fifty shares of Mexican Petroleum stock at the then market price of $171 per share, which sale was made to the brokers through whom the purchase was made, namely, Carlisle, Mel-lick & Company, notice of which fact was given to plaintiff on the morning of the following day; that the price of the stock continued to depreciate, reaching a price of $163 per

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share on August 21st, and thereafter the market price advanced to $264 per share on October 2, 1919.

Plaintiff, claiming that, as provided in section 3336 of the Civil Code, he had prosecuted his action with reasonable diligence, sought recovery of the difference between the value of the property at the date of the alleged conversion, to wit, August 7, 1919, and the highest market value thereof prior to the commencement of the action on December 19, 1919.