Opinion
Argued February 2, 1891
Decided February 24, 1891
Geo. B. Wellington for appellant.
J.K. Long for respondent.
Ogden, Calder Co. undertook upon a sufficient consideration by way of commissions paid and margins furnished and to be furnished by the defendant, to carry the shares and sell them as directed or deliver to him certificates for them on payment of their purchase-price. This promise the plaintiff admits that his assignors broke by refusing to sell three hundred shares for $111 each on the 15th of August, 1887, as directed, and in permitting Work, Strong Co. to sell them in October following for $97 each on account of an indebtedness owing them by Ogden, Calder Co.
The referee allowed the defendant as damages for the breach of this promise $14 per share, the difference between the price at which they should have been sold August fifteenth and the price at which they were sold in October.
The general rule for determining the amount of damages recoverable for the violation of a contract or the breach of a duty, is that the injured party is entitled to such as are the natural (or to be apprehended) direct and immediate results of the breach. ( Griffin v. Colver, 16 N.Y. 489; Hamilton v. McPherson, 28 id. 72; Hadley v. Baxendale, 9 Exch. 341; May. Dam. 10.)
This rule is subject to the qualification that if the person injured thereafter negligently suffers his loss to be enhanced, the increase so occasioned cannot be recovered from the person who first violated his contract or duty and in some cases it is incumbent on the person damnified to take such active measures as he reasonably may to minimize the damages naturally flowing from the breach. ( Hamilton v. McPherson, 28 N.Y. 72; Johnson v. Meeker, 96 id. 93-97; 1 Suth. Dam. 148; 1 Sedg. Dam. [7th ed.] 56; May. Dam. 86.)
These rules are not questioned by the learned counsel for the plaintiff nor does he deny that the damages recovered were the natural, direct and immediate result of the failure of Ogden, Calder Co. to sell the shares on the fifteenth of August as directed and of their assignee's permitting them to be sold in October following but he contends that the defendant was not entitled to this measure of damages because when he learned on the twenty-eighth day of August that his instructions to sell had not been executed, he did not notify Ogden, Calder Co. that he abandoned all claim to the shares and held them responsible for their value, and cites as authority for his position Whelan v. Lynch (65 Barb. 326; 60 N.Y. 469).
In the case cited the plaintiff consigned wool to the defendant for sale, and on the 26th of October, 1864, directed its sale at the market rate which instruction the defendant disregarded, and on the twenty-fourth of April following the plaintiff gave the defendant this notice: "In as much as you failed to sell my wool when you received orders to do so, you can do with it as you please; I withdraw from the matter and look to you."
In April, 1867, an action was begun to recover the value of the wool (it not having then been sold) and it was held that its market-price when the order to sell was given or in a reasonable time thereafter for effecting a sale was the measure of damages. In that case the plaintiff sought to recover the full value of the wool, the title to which was originally in him, and not the difference between the price on the different dates.
In the case at bar the defendant never held the legal title to this stock, and there was no way in which he could sell it, except through his brokers, without paying its purchase-price, taking the certificates and then selling them, which he was under no obligation to do for the protection of his defaulting agents. The shares were held by Work, Strong Co. as security for any indebtedness of Ogden, Calder Co. to them, and the latter firm had the legal right to sell the shares at any time after August fifteenth, and before the former firm exercised their right to sell them for their own security. Had the defendant's agents exercised their right they would have avoided the loss occasioned by the further decline. This is not a case of the failure of an agent to obey a direction to sell shares or chattels, the legal title to which is then, and, after notice of the agent's neglect to sell, remains in the principal, in which case the latter should either sell the property within a reasonable time or permit his agent to sell so as to render the loss as slight as possible.
The learned referee adopted the correct rule of damages. It appears from the plaintiff's bill of particulars and from the evidence that October 1, 1887, the defendant was credited by Ogden, Calder Co. with $750 dividends received on five hundred Manhattan shares, three-fifths of which ($450), it is said by counsel, arose from the shares in dispute, and it is urged that if the plaintiff is chargeable with the shares at $111 each as of August 16, 1887, he is entitled to all dividends thereafter declared. This is quite apparent, but the difficulty of correcting the supposed error in this court is in the rule which forbids it to look into the evidence for errors or reasons (not pointed out by a request or an exception) for modifying or reversing a judgment, and the referee not having found that this credit arose in part from a dividend on the disputed shares, and not having been asked so to find, the alleged error, if any there be, cannot be here corrected. For the same reason we cannot modify the judgment by allowing the plaintiff $56.25, which he asserts should be allowed him as the usual commissions for selling the shares if he is to be charged with their value.
The judgment should be affirmed, with costs.
All concur.
Judgment affirmed.