Majority
p. 88CHATTERTON v. FISK. N. Y. Supreme Court, First Department; Special Term, 1876.
Headnote
Gold Contbacts.—Pleading.Id an action on a contract at the Gold Exchange, for the sale of coin to the defendant under the rules of the Exchange, which required sales to be settled the next day, and through the clearing department of the Gold Exchange Bank, the complaint must allege a tender or offer of performance to the defendant. Readiness is not enough.
The omission of such allegation is not dispensed with, by averring that the bank suspended in consequence of the enormous business
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with it of defendants; nor by averring that the broker who bought for defendants gave plaintiff notice of his inability to perform, without anything to show his authority to bind defendants by such notice.
Demurrer to complaint.
George H. Chatterton sued Lucy D. Fisk, as executrix, &c., of James Fisk, Jr., deceased, Jay Gould, Henry N. Smith, Henry H. Martin, and James B. Beach, for damages for breach of an alleged contract to purchase gold.
The allegations of the complaint were in substance:
1. That the deceased and the other defendants had associated to purchase a large amount of gold coin for speculative purposes, and accordingly employed, among others, one Albert Speyers, a gold broker, and member of the New York Gold Exchange, to buy large quantities on their account at said exchange, and subject to its customs, rules, and by-laws.
3. That there then were rules of the Gold Exchange requiring that, unless otherwise expressed, all contracts for gold should be settled through the clearing department of the New York Gold Exchange Bank, and all sales at its board should be settled for the next day.
3. That in pursuance of defendant’s orders, said Speyers, on September 33, 1869, as their agent, purchased from plaintiff, and plaintiff sold to him under the rules of said exchange, one hundred and seventy thousand dollars gold, at the rate of one dollar and a half currency for each dollar, to be settled for the following day, which was the market price at that time and place; and that plaintiff thereupon made arrangements, and was ready and prepared to make delivery thereof, through the clearing department of the Gold Exchange Bank on the following day.
4. That by reason of the multifarious and enormous gold transactions of the defendants, and not
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otherwise, said clearing department was unable to effect a clearance of their contracts, maturing on the 24th, although said plaintiff had duly performed all the conditions of his contract, in providing said clearing house with all the customary and necessary means to clear with, and deliver said gold to, the defendants.
5. That on said 24th, Speyers had notified the officers of the said bank, of his inability to fulfill any of his contracts at that time unsettled, and also notified the plaintiff of his inability to fulfill his contract with him; that in consequence of such inability, and of a like failure on the part of other brokers of defendants, and the immense number of said contracts, said G-old Exchange Bank, and said Gold Exchange were compelled to suspend business on that day, and did not resume business until Oct. 10, and the price of gold fell to 130, and thereafter to 106 1-4.
6. That during the time of such suspension, plaintiff was ready and willing to fulfill his contracts with defendant through the agency of said clearing department, but defendants were, and continued in default, whereby,
7. Plaintiff suffered great loss, was prevented from realizing profits on said sale, and making a like contract with others, to his damage, fifty thousand dollars.
The defendants, Gould and Smith, demurred, upon the ground that the complaint did not state facts sufficient to constitute a cause of action.
Thomas G. Shearman (Shearman & Sterling, attorneys) for demurrer.
I. This was an agreement for purchase and sale, with mutual covenants, upon which neither could recover without showing his readiness and willingness to perform upon his part, together with an offer to make such performance, or facts excusing such offer (Dunham v. Pettee, 8 N. Y. 508 ; Lester v. Jewett, 11 Id. 453).
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II. There is no allegation of tender or offer of performance on the part of the plaintiff, nor any excuse for the omission.
III. The allegation that plaintiff was ready and prepared to make delivery through the clearing department of the Gold Exchange Bank, is insufficient. 1. It is not alleged that plaintiff gave notice to defendant of his readiness or willingness thus to perform. Nor, 2, that he, plaintiff, made demand either upon defendants or the clearing department. Nor, 3, that he gave any notice to the bank or to its clearing department, of his readiness to perform. 4. It is not pretended that on or after Oct. 10th, plaintiff made any offer or demand.
IY. The allegation that plaintiff ‘ ‘ duly performed, ’ ’ &c., is insufficient. 1. It is limited to those conditions which required him to provide the clearing house with customary and necessary means to clear. No such conditions have been previously stated, and no one can tell what these customary and necessary means were. A deposit of the gold with the clearing house for account of the defendants, cannot be meant, for plaintiff was not called upon to perform until defendants should have manifested their readiness to perform upon their part. 2. It being alleged that the bank had broken down from inability to do the work put upon it, plaintiff was bound either to find some other channel of communication with the defendants, or else to wait until the bank should resume.
Y. There is no allegation that defendants were unable, or refused, or were asked to perform, nor even that they were not ready and willing to perform through the Gold Exchange Bank.
YI. No facts are stated to hold defendants responsible for the break down of the bank. Defendants are not responsible for the incapacity of the bank, simply because they favored it with an unprecedented
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amount of business. Both plaintiff and defendants seem to have agreed upon a common agent which had not capacity sufficient for the work put upon it. One party is no more to blame for this than the other.
VII. Plaintiff is not helped by the allegation that Speyers, the broker, notified the bank and plaintiff of his inability, because it is not alleged that the contract was made in Speyers’ own name. On the contrary it is alleged that >he bought as agent for the defendants. Therefore, he was under no obligation to fulfill these contracts, and plaintiff had no right to look to Speyers for performance; and there is no hint that defendants gave any notice of their inability to fulfill, nor that they authorized Speyers to do so, nor even that he claimed to act as their agent in doing so.
VIII. The allegation that “said defendants were and continued in default,” is a mere legal conclusion and an entire nullity.
James V. Wright, opposed.
The demurrer is well taken, for these reasons:—1. The complaint does not aver that the plaintiff tendered or offered performance of the contract on their part to the defendants or to their alleged agent, Speyers.
2. The averment in the complaint that the plaintiffs were ready, &c., is not sufficient (Dunham Mann, 8 N. Y. 508 ; Parker v. Parmele, 20 Johns. 130 ; Lester v. Jewett, 11 N. Y. 453 ).
3. The allegation as to the inability to effect clearances through the Gold Exchange Bank, in consequence of the enormous business of the defendants with the bank on the day in question, does not excuse an offer of performance on plaintiff’s part, nor does the fact that the bank was unable to do the business tendered to it, put the defendants in default.
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4. The notification from Speyers as to Ms inability to carry out the contract, does not appear to me to relieve the plaintiffs from offering to perform (cases supra).
Judgment for defendants on demurrer, with leave to plaintiff to amend on payment of costs.
Cases cited
- Dunham v. Pettee 8 N. Y. 508 p. 90, p. 92
- Parker v. Parmele 20 Johns. 130 p. 92
- Lester v. Jewett 11 N. Y. 453 p. 92