Choate v. Bebee — 131 A.D. 535

Majority

p. 535

Rufus M. Choate, Appellant, v. George S. Bebee, Respondent.

Fourth Department,

March 3, 1909.

Headnote

Trial — cross-examination of defendant —change in ..capitalization and stock rating after contract for sale of stock.

Where, for a valuable consideration, the defendant agreed to transfer twenty-five shares of stock at a time when the total capital of the corporation Was $2,500, divided into §100 shares, and after a merger with another company the total stock became $50,000, divided into $10 shares, and the defendant in fulfillment of the. contract merely offered twenty-five shares of the. new stock, which was rejected'by the plaintiff, it is error to refuse to allow1 the' plaintiff to cross-examine the defendant to show the details of such change of stock and direct a verdict for the defendant. <

Appeal by the plaintiff, Biifus If. Choate, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the County of Erie on the 3d day of March, 1908, upon the verdict of a jury rendered by direction of the court, arid' also from an order entered in said clerk’s office on the same day.-denying the plaintiff’s motion for a new trial made upon the minutes.

Gordon F. Matthews, for the appellant.

Clinton T. Horton, for the respondent.

The judgment and order should be reversed and a new trial granted, with costs to the appellant to abide event.

The action was brought to recover damages for breach of a written contract for the sale or trade of stocks. The contract was made September 15, 1906, and provided in substance that theplaintiff should transfer to the defendant 297.shares of a certain gas company stock, and the defendant should pay therefor one dollar in cash and transfer to the plaintiff .twenty shares of a certain telephone company stock, the' exchange of stocks to take place on or before October 5, 1906.

The plaintiff transferred and delivered to the defendant the gas

p. 536

stock at the time the agreement was made. The telephone stock was then in $100 shares, and there were twenty-five shares ° in all, the total stock being $2,500. ' The defendant never transferred or delivered or offered to plaintiff twenty shares of that stock.

After the agreement Was made there seems to have been a merger of the company with another one or some change by which the total stock became $50,000 . and the shares $10 each. The defendant offered twenty shares of this new stock as a performance of the agreement on his part, claiming this was just as good and valuable as the twenty shares of the $100 stock. The plaintiff refused this offer; demanded the twenty shares of the $lb0, as it existed at the time the agreement was made, .and upon refusal by. defendant to comply with his demand plaintiff brought this action, claiming his damages were $2,000.

The court, upon this statement of facts, erred in directing a verdict for the defendant. The plaintiff met with some difficulty in proving these facts. By the evidence of the plaintiff and' his attorney as to talks with the defendant, however, it appeared that when the agreement was made the gas stock was $2,500, being twenty-five shares of $100 each, and plaintiff Was to have twenty of these twenty-five shares, and that afterwards, however, some change was made by increase of the capital stock or merger with some other company and the stock was $50,000 in shares of $10 each, and defendant wanted plaintiff to accept twenty shares of this $10 stock.

The plaintiff’s attorney by cross-examination of defendant, tried to show the details of this change of stock, but the court ruled out the evidence, and announced that the only question was whether there were two telephone companies of the same name or only one, and then directed the verdict.

We think the plaintiff should liave been permitted to cross-examine the defendant to develop the facts, wdiich were not within the plaintiff’s knowledge, and which he hoped tó bring out on such cross-examination.

There was some proof that the plaintiff’s attorney accepted for his client the twenty shares of $10 stock, hut the attorney testified that. lie. sent it back, and finally it was stipulated he should hold it

p. 537

till the trial. The damages were not very clearly established, but they can be shown on a new trial if the plaintiff is found entitled to recover in the case.

A new trial should be had.

All concurred.

Judgment and order reversed and new trial ordered, with costs to appellant to abide event.