Opinion
Argued June 23, 1875
Decided September 21, 1875
Samuel Hand for the appellant. S.P. Nash for the respondents.
The decision of this case mainly depends upon the construction to be placed upon the power of attorney executed by the plaintiff to her husband and the extent of the authority which it conferred upon him. This power of attorney was full and explicit, conferring ample authority upon the attorney to perform all acts which were necessary to be done in the transaction of the business intrusted to his charge. The attorney, thereby, was vested with the right to buy, sell and transfer in his discretion gold, stocks, etc., and to draw, execute and deliver "all orders, checks or other instruments in writing which shall or may in his discretion be necessary," etc., in the transaction of the business, which was the purchase and sale of stocks on speculation. It involved the necessity of employing a broker, for the purpose of buying and selling, the pledge of securities purchased, and a right of the broker to protect himself against losses or risks, according to the usual manner and custom in similar cases. ( Horton v. Morgan, 19 N.Y., 170.) The right to this protection would necessarily depend upon the magnitude, hazzard and character of the speculations within the custom stated.
As brokers, the defendants, pursuant to the directions of the plaintiff's agent, made large and extensive purchases in their own name, upon which they advanced the entire cost, amounting to hundreds of thousands of dollars beyond the amount (some $60,000) which the plaintiff's agent had deposited with them, and held on to the securities as a margin. All of these acts they were perfectly justified in doing, and they were clearly within the scope of their recognized power and authority.
The paper executed by the agent of the plaintiff upon the eighteenth of September authorized the defendants to sell, at their discretion, at public or private sale, without any notice whatever, the stocks or gold which they might be carrying for the plaintiff, whenever the margin should fall below five per cent. This paper was also within the meaning of the agent's authority, by virtue of the power of attorney. The exercise of the power to sell without notice was not conferred upon the defendants absolutely, but depended upon the fall of the stocks below five per cent, first, and the exercise of their discretion after they had so fallen. The discretion was to refrain from selling in case they did fall as provided. The right conferred was direct and positive, and could be carried into operation as soon as the time fixed had arrived, and the stocks had fallen in the market below five per cent. The defendants, as creditors, with a lien upon securities, had originally, without the writing, an undoubted right to sell after demand and notice, and as brokers were only bound to sell when instructions were given to that effect. This did not require the exercise of their judgment in making a sale, while the instrument in question imposed upon them a greater responsibility and the plaintiff thereby derived the benefit of that which, under ordinary circumstances she had no legal right to demand. This was not adverse to the plaintiff's interest, in violation of her rights, or in contravention of the power of attorney executed to her husband.
The authorities cited by the learned counsel for the plaintiff, to uphold the doctrine that the plaintiff's attorney, under the power executed by her, could not delegate the exercise of discretion without express authority to do so, have no application to a case of the character of the one now considered. As we have seen, the power of attorney gave ample authority to execute all instruments which might be deemed necessary in the performance of the duty which it imposed. To say that this was limited to instruments of such a nature as orders and checks, is to give it a restricted interpretation, not warranted by the instrument itself or by the authorities.
Perry v. Nott (2 De Gex, F. J., 38); Esdaile v. Nauze, (1 Y. C., 394), which are cited, do not decide the question now raised. In both of them no such words were incorporated in the power of attorney, and these cases were disposed of upon a different ground. Nor does Atwood v. Manning (7 B. C., 278), aid the plaintiff. The case at bar has no analogy to one where it is entirely apparent that the attorney has gone beyond the letter and intention of his instructions. (See Nixon v. Hyserott, 5 J.R., 58; Rossiter v. Rossiter, 8 Wend., 494; Mills v. Carnly, 1 Bosw., 159.) The power exercised in each of the cases cited was not required to enable the attorney to carry out the purposes intended, nor within the meaning of the instrument conferring the appointment.
The power of attorney here conferred upon the attorney full authority to substitute another in his place, and the substitute appointed was vested with the same authority as the attorney himself. Nor can it be doubted that the attorney had ample power to direct the sale of the stocks when he deemed it proper, and if he had at any time so directed, and the sale had been made, that it would have been valid. This was what was actually authorized by the instrument of September eighteenth, with a qualification, however, that no sale was to be made of the stocks, if, in accordance with the best judgment of the defendants, it was inexpedient to sell. Both parties were interested in their disposal; the plaintiff to insure a profit and the defendants to protect themselves from losses, were authorized, when it was prudent for the benefit of either the plaintiff or themselves, to dispose of the stocks.
It is said that the power to buy and sell gave no power to pledge on a margin; and, if the authority was valid to sell without notice, it did not enable the defendants to acquire a debt or a claim against the plaintiff. The result of a loss beyond the moneys deposited upon any lawful sale or sales, necessarily, would be to make the plaintiff liable for the deficiency; and there is no sufficient reason why she should not pay the same. As the counter-claim arose out of the same transaction, it was a proper subject for recovery in this action by the defendants.
There was no error in the charge of the judge if the views already expressed are correct; nor in refusing to charge as requested in the fifth, sixth and seventh propositions of the plaintiff's counsel, which it is now claimed should have been charged. The charge of the judge to the effect that the instrument of September eighteenth conferred the same authority which the attorney possessed on the defendants, and gave them authority to deal, in their discretion, the same as he might do, was in pursuance of the authority actually given, and in accordance with sound principles, as is already manifest.
Although the judge had stated, in admitting the paper referred to as evidence, that there was ample authority in the power of attorney to delegate whatever discretionary power the attorney possessed to the defendants, it must be borne in mind that the instrument in question did not, as seems to be supposed, expressly delegate any discretion of the attorney to the defendants. It authorized them to sell "at their discretion," without delegating the discretion of the attorney. If these words had been omitted the power to sell would have still been in the discretion of the defendants, precisely as much as they were with the language employed. They could not have lawfully sold without exercising their discretion; and as they were bound to do this in the discharge of the duty assumed under the instrument any way, the language cited is not important. With or without it the fair and intelligible import of the authority which was conferred, when taken in connection with the circumstances of the case, was, that in the exercise of a sound judgment they had a right to protect themselves against losses by a sale, after the stocks had fallen on their hands, and that they were not bound to incur further risks. This they had a right to do upon demand or notice; and the instrument in question waived the right to such demand or notice.
The charge of the judge, that the defendants had a right to sell when the market rendered it prudent, either for the benefit or protection of their principal, or for their own protection, and that if the market was such that a prudent and careful man would have deemed it expedient to sell, the sale was justifiable, was as favorable to the defendants as the facts in the case demanded.
For the reasons already given, the requests to charge were properly refused. They were covered by the charge which had been previously made. The judge had fairly submitted to the jury whether a sale was justifiable, and whether it was proper in the exercise of a sound discretion. This included good faith, and which covers all which was required of the defendants. ( Marfield v. Goodhue, 3 Comst., 62-73.) The principle that one who undertakes to act for another in any matter cannot in the same matter act for himself, has no application to a case like the present. If it had, it would preclude the defendants from taking any action whatever in reference to a sale, as, from their peculiar relations as brokers, purchasing and holding stock, paid for mainly out of their own funds, they must, necessarily, in making sales, act for the protection of their own interest. The authorities cited on this point have no application to any such case. It is also worthy of observation, in this connection, that although there was evidence to show that the fall in the price of some of the securities was occasioned by a panic, and not from any want of actual value, yet there was reason to apprehend still further depreciation; and if apprehensive of the effect of such a state of affairs, it was for the jury to say whether the sale was made in the exercise of that sound judgment and discretion with which the defendants were invested. It may also be remarked that the evidence tends to show that the next day after the sale the stocks were still lower, and an offer was made to replace them at a cost less than they sold for, which was refused.
The objection that a sale at the board of brokers was not within the defendants' authority was not well taken. The sale was made in accordance with the custom in such cases, and was clearly justified. ( Milliken v. Delson, 27 N.Y., 364.)
The objection to the question put to the witness Chittenden is generally to the form of the question. It is not fairly to be assumed that the answer could have affected the result, and furnishes no sufficient ground for a new trial.
No exceptions were taken which authorize a reversal of the judgment, and a new trial must be denied, and the judgment affirmed.
All concur.
Judgment affirmed.