This case involves a question as to the measure of damages upon a sale of stock, which the defendants purchased and agreed to carry for the plaintiff until instructions were given by him to sell, or for a period of six months. A guaranty was given to the defendants by another party against loss, and the defendants, upon being notified by the guarantor that he withdrew his guaranty, gave notice thereof to the plaintiff that, unless he placed a margin in their hands at a time named upon the next day, they would close out the stock at that time. This not being done the stock was sold. It may be assumed that the sale was unauthorized, and the main question presented relates to the rule of damages. The testimony shows that for thirty days after the sale this stock could have been purchased in the market for the price at which it was sold or for a less sum, and the court held that only nominal damages could be recovered, and directed a verdict accordingly.
In Baker v. Drake (53 N.Y. 211; 13 Am. Rep. 507), it was held in this court that where a broker purchases stock upon a margin for a customer and makes an unauthorized sale of the same the principal has a right to disaffirm the sale and to require the broker to replace the stock, and upon failure or refusal to do this the remedy of the principal is to replace it himself, and the advance in the market price, from the time of the sale up to a reasonable time to replace it after notice of the sale, affords complete indemnity, and is the proper measure of damages.
If this rule be applicable to the facts presented in the case at bar, then no error was committed by the judge in his direction to the jury. It is urged, however, by the counsel for the appellant that as the plaintiff had supplied the defendants with an acceptable guaranty, his rights were the same as if he *Page 371 had paid the purchase-money in full, and that in such case the rule stated does not apply. In the case cited it is laid down that where the stocks have been paid for and are owned by the person for whom they are purchased different considerations would arise (53 N.Y. 217), and that it is unreasonable to require him to pay it the second time, and, therefore, all fluctuations in price should be at the risk of the vendor who refuses to deliver, while retaining the purchase-money. (Id. 223.) In the case at bar it does not appear that the plaintiff had paid any money on account of the purchase of the stock, or that the withdrawal of the guaranty, or the arrangement between the plaintiff and the guarantor was founded upon any payment made by the plaintiff to the guarantor. As it stands he had not parted with any money on account of the stock, and hence did not occupy the position of one who had absolutely paid the purchase-price of the stock, and is not brought within the exception referred to in the opinion in the case cited. It cannot, therefore, be said that the case is one where the consideration has been paid; nor does the fact that a guaranty was given change the rule of damages or entitle the plaintiff to the application of a different rule than the one upon which the decision was based.
The plaintiff not having paid or become liable to pay any money on account of the guaranty, the question considered is settled by the case cited. (See also S.C., reported in 66 N.Y. 523; andGruman v. Smith, 81 id. 25.) There was, we think, no error on the trial in refusing the application of the appellant's counsel to permit the question, as to what constituted a reasonable time, to go to the jury. The plaintiff had ample time to replace the stock, if he had concluded to do so, before it advanced beyond the price paid for it. It did not reach such price until some time after notice of the sale, and as it is apparent that the plaintiff had a reasonable time within which to purchase the stock after notice of the sale, there was no question for the jury in this respect.
The judgment should be affirmed.
All concur.
Judgment affirmed. *Page 372