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Cassatt v. First National Bank of West New York

Decided: October 16, 1933.

ROBERT K. CASSATT ET AL., PLAINTIFFS-APPELLANTS,
v.
THE FIRST NATIONAL BANK OF WEST NEW YORK, DEFENDANT-RESPONDENT



On appeal from the Supreme Court.

For the appellants, George W. C. McCarter.

For the respondent, Hirschberg & Nashel (C. W. Tooke, of the New York bar, on the brief).

Campbell

The opinion of the court was delivered by

CAMPBELL, CHANCELLOR. This is an appeal from a judgment of nonsuit in an action where the plaintiffs below, stock brokers, sought to recover from the defendant, a national bank, the purchase price and their commissions, in a transaction involving the purchase, by the plaintiffs, of one hundred shares of the common stock of the Baldwin Locomotive Works,

when, as and if issued, and two hundred shares of the common stock of the Crocker-Wheeler Company, when, as and if issued.

The complaint declares three distinct causes of action under six counts:

1. That the bank ordered the purchase of said stock for its own account.

2. That the bank ordered the purchase for an undisclosed principal.

3. That the bank is indebted to plaintiffs for stock sold and delivered and is likewise indebted to them for moneys laid out and expended for the purchase of such stock.

The answer was a general denial with separate defenses of the statute of frauds and that the transaction was ultra vires and therefore void.

The plaintiffs produced as a witness one Seaver, who, at the time of the transactions in question, was the manager of their Newark office.

He, at first, testified as to the Baldwin Locomotive Works stock transaction that he received the order for the purchase from Daniel Daume, the assistant cashier of the defendant, bank, and that such order was to buy the stock for the bank's account. Later he said that in a subsequent conversation with Daniel Daume he was told by the latter that the Baldwin stock was for him. On cross-examination he testified that he knew that Daniel Daume had a personal account with the plaintiffs, but that when the order to purchase was given he had not directed that such purchase should be made for him and upon his account, although said this witness, "I might have known that the stock was for him at the time of purchase." "This particular conversation was to buy one hundred shares of Baldwin Locomotive. My question is, 'into whose name or into whose account shall I put the stock?' in other words, on the ticket that I write out, I have to put the name of an account. * * * And he said, 'the First National Bank of West New York,' * * * I believe I asked him, 'is it for you?' and he said, 'yes.'" The witness further

said that he did not look to Mr. Daume for payment although he knew that the purchase was being made for him.

It is apparent to us, therefore, giving to this proof full credence, and it was all the proof that there was, that although the original order for this stock purchase was for the account of the bank, it was known to plaintiffs' office manager before the purchase of the stock was actually made that the order was for Daume, who had a personal trading account with the plaintiffs.

As to the Crocker-Wheeler stock purchase this same witness, upon direct examination, testified that such business was transacted with a Mr. Deyerberg, the cashier of the defendant, bank, that such transaction was by telephone, and although it does not definitely appear exactly what that order was it was one to buy at a price good until canceled; that such order was held for some days and then canceled "and there was no order existing for a number of days;" that at a later date, not fixed, there was a conversation between the witness and Charles Daume, a brother of Daniel Daume, assistant cashier of the bank, and that following this the witness was given instructions by the cashier, Dyerberg, to execute the order to purchase and the witness testified that, at some time, not fixed, Deyerberg had told him that one hundred shares of this stock was for him and the remaining one hundred shares for a customer of the bank, Charles Daume. On cross-examination the witness testified that at the time the original order for purchase was made he did not know that one hundred shares was for Deyerberg but that he understood that some of the stock was for Charles Daume and this he knew at the time of the purchase of the stock and subsequent to such purchase that one hundred shares was for Deyerberg. He further testified that he could not recollect "whether the name on the original order was the First National Bank or Mr. Charles Daume." Still later he testified that either at the time of receiving the order or at the time of purchase he "knew that Mr. Charles Daume was to get one hundred shares and that Mr. Deyerberg was to get the other one hundred shares." And then immediately, upon redirect examination

he testified that upon receiving the order to purchase he was directed by Mr. Deyerberg "to put the two hundred shares of Crocker-Wheeler stock into the bank's account."

Here again it appears to us that giving this proof full credit the situation was that the plaintiffs' manager knew that the purchase was for Charles Daume and Herman T. Deyerberg, although the latter directed the transaction to be made through the bank's account.

The nonsuit seems to have been granted upon the ground, generally, that the transaction as portrayed by the proofs, was ...


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