On defendant's appeal from the Essex County Circuit Court.
For the appellant, Philip J. Schotland.
For the respondent, Walter J. Bilder.
The opinion of the court was delivered by
PARKER, J. The suit was for the balance claimed by plaintiff corporation to be due it as the result of a series of stock transactions between the parties. Plaintiff is a dealer in corporate stock -- defendant-appellant was a customer. No stock was ever delivered into the physical possession of defendant, no payment on account was made, except in one instance presently to be noted; and there was no writing signed by the defendant, although the amount involved was in each of the three cases over $500. Comp. Stat., p. 4648, § 4. This provision of the Sales act, altered from the statute of frauds, was pleaded and relied on at the trial. Plaintiff claimed constructive delivery and acceptance as having
taken place, in that defendant requested plaintiff "to keep the stock for him." Later on, according to plaintiff's claim, defendant "resold" all the stock, except fifty shares, to plaintiff by several transactions on different dates and at lower prices, leaving a deficit for which the suit was brought. The fifty shares were delivered by plaintiff, pursuant to defendant's instructions, to a third party to whom the defendant had agreed to sell them, and plaintiff collected the proceeds and credited the same to defendant's account. All the stock was endorsed for transfer in blank but throughout the proceedings it remained in plaintiff's safe deposit box, except the fifty shares.
The trial judge denied a general motion to nonsuit, and also to direct a verdict for defendant, and on the point of constructive delivery instructed the jury as follows:
("Notwithstanding the fact that there was no actual manual delivery of this stock to the defendant, it is insisted that there was a constructive delivery to him of the stock, and that is permissible.) Where there is an offer of delivery, or where an offer of delivery is refused, and the person being charged with the delivery of the stock is told to retain that stock for the order of the person to whom it is sold, there has then become a constructive delivery of that stock, and the person who is ordered to hold it becomes the bailee or agent of the purchaser of the stock. That is exactly what the plaintiff claims there was in this case -- while there was not an actual delivery of the stock, it is claimed that the stock was at all times in shape for delivery; that at the time the stock was sold to the defendant, the defendant directed the plaintiff to hold the stock, and thereafter the plaintiff did continue to hold the stock, subject to the defendant's order, until it was actually sold.
"Now, if you believe, from the evidence in this case -- that is, the greater weight of the evidence in this case, because the burden of proof is upon the plaintiff to show by the greater weight of the evidence -- that there was a constructive delivery by the plaintiff to the defendant of this stock, and that the defendant by what he said at that time constituted the
plaintiff his bailee, his agent, for the purpose of holding that stock subject to his order -- if you believe that that is shown by the greater weight of the evidence in this case, then this case is taken out of the statute of frauds, and the mere fact that there was no order in writing for this stock does not prevent the plaintiff in this case from recovering the value of that stock, or the difference between the ...