consider the damages limited by the price within the time specified and that the question of damages was for the jury. On appeal, in an opinion by Baron Parke, the damages were reduced to 450 pounds; namely, the difference between the market and contract price on the date that the stock should have been delivered to the plaintiff. The Court stated that the plaintiff might have gone into the market and bought other shares as soon as the contract was broken. That case obviously is on all fours with the case at bar.
In the District of Columbia there is an old case decided in 1820, Tayloe v. Turner, Fed.Cas. No. 13,770, 2 Cranch C.C. 203. That opinion reads as follows:
'Debt on bond conditioned to transfer stock of the Washington Bridge Company.
'The Court, * * * at the prayer of the plaintiff's counsel, instructed the jury that the rule of damages was the price of the stock on the day on which it ought to have been transferred according to the contract.'
Neither counsel nor the Court have been able to find any later case in the District of Columbia on this point, but the two cases to which I have referred, especially in the light of the basic general principles, establish the measure of damages to be applied in this case.
There is a dictum to the contrary in an Arizona case, Bank of Bisbee v. Graf, 12 Ariz. 156, 100 P. 452, in which the Court stated that counsel were agreed that the law was that upon the refusal or failure of the customer to deliver stock to the broker which the customer had ordered the broker to sell, it is the right and duty of the broker, within a reasonable time, to go into the market and purchase the stock, and the measure of damages is the increased price which the broker is compelled to pay. However, on analyzing the facts in that case, the breach took place on February 1, 1907, and the plaintiff bought other stock on the following day. Consequently, the facts do not support the broad dictum.
Plaintiffs' counsel have cited the case of Burhorn v. Lockwood, 71 App.Div. 301, 75 N.Y.S. 828, decided by an intermediate appellate court of the State of New York. That case is distinguishable not only on the facts but on principle as well. It involved a situation that is also presented in many other cases, of a broker who was holding stock for his customer and without authority sold that stock. In other words, he was guilty of a conversion. The rule, indeed, is that under those circumstances the customer may recover as damages the difference between the price at which the stock was wrongfully sold and the highest market price at which like stock was sold in the open market within a reasonable time thereafter. The principle on which this line of authorities is based is not applicable to a breach of contract to deliver stock; they involve a situation where an agent wrongfully converts his principal's stock.
It appears that in this case, as has been stated, the stock should have been delivered before the close of business on December 8, 1958. Consequently, it would have been reasonable and proper for the brokers to wait until the following day before buying in the stock for the account of the customer. The evidence shows that the price of the stock on December 9, that is, the price at which it was offered for sale, was $ 3 a share. Consequently, the market price of 1,000 shares on December 9, would have been $ 3,000.
The plaintiffs are entitled to recover the difference between the sum of $ 3,000 and the sum of $ 2,525, for which they sold the stock for the defendant's account. Accordingly, the Court will direct a verdict for the plaintiffs for the sum of $ 475.
There is also a side transaction. The plaintiffs purchased for the defendant's account, pursuant to his order, 50 shares of stock of the Union Trust Company. When the defendant committed the breach of his contract in respect to the Cominol Company stock, the plaintiffs sold the Union Trust Company stock for the account of the defendant and credited him with the proceeds. In the light of the ruling that the Court is making in respect to the plaintiffs' claim, the conclusion follows that the sale of the Union Trust Company stock was wrongful and unjustified. Accordingly, the Court will render a decree of specific performance directing delivery by the plaintiffs to the defendant of 50 shares of the capital stock of the Union Trust Company. That, of course, is not a jury issue, but this ruling will be included in the decree.
The Court will direct a verdict at this time in favor of the plaintiffs against the defendant for the sum of $ 475.
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