Cameron v. Durkheim — 55 N.Y. 425

Majority

p. 425

Roderick W. Cameron, Respondent, v. Franz Durkheim et al., Appellants.

Headnote

In an action against gold brokers for breach of duty, it appeared that defendants sold a large quantity of gold “ short” for plaintiff, and, in accordance with the custom, borrowed gold to deliver; an extraordinary rise taking place in gold, defendants called upon plaintiff to furnish immediately additional margin. Defendants, as witnesses, testified in substance that to this demand plaintiff replied that he could furnish no more margin, that he was ruined, and defendants must take care of themselves. It appeared that one of the usual methods of closing the transaction upon a short sale, in case of failure to furnish margins, was to effect a settlement with the lender, and defendants testified that such a settlement was made. Held, that the statement testified to, if made, authorized the defendants to make a settlement which would be deemed prudent and judicious, under the circumstances, and that the evidence required the submission to the jury of the question as to whether the authority was given, and, if so, whether the settlement was made in good faith and was a discreet and judicious exercise of the power conferred.

Defendants offered to show declarations of plaintiff to a third person, upon the day of the demand, of his inability to furnish more margin, which evidence was rejected. Plaintiff having, as a witness, denied the making of the statement to defendants and also having denied the

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making of such declarations, evidence thereof was again offered and rejected. Held, error; that the evidence was proper when first offered, as tending to corroborate defendants’ evidence, and, when subsequently-offered, as tending to impeach plaintiff’s credibility.

(Argued December 11, 1873;

decided January 20, 1874.)

Appeal from judgment of the General Term of the Court of-Common Pleas for the city and county of Hew York, affirming a judgment in favor of plaintiff, entered on a verdict of a jury, and affirming an order at Special Term denying motion for a new trial.

This was an action against defendants, as gold brokers, for an alleged breach of duty.

The complaint alleged, in substance, that the defendants, prior to the 24th of September, 1869, had made various short sales of gold for account of the plaintiff, which on that day amounted to $404,000; and that the proceeds of these sales and moneys paid on margin to defendants amounted to $564,217.65; that on the 25th September, 1869, plaintiff requested defendants to buy in this gold; that they could have bought it on that day for $525,200, and that, had they done so, there would have been left in their hands a balance of $38,764.55, which sum, with interest, plaintiff claimed to recover.

It was admitted that the sales made by defendants were' short sales; that the plaintiff did not have the gold to deliver ; that the defendants, in the usual and customary way, borrowed the gold and made the deliveries. Evidence was given tending to show that, by the custom in such case, the borrower is obliged to pay the lender its market value in cash; and whenever, and as often as gold advances, whether before or after the gold is returnable, the borrower is obliged to pay the lender enough, with the previous payment, to reach the market-price; and if the price of gold declines, the. lender pays back to the borrower whatever 'is necessary to reduce the amount in the hands of the lender to the reduced market value of the gold. These payments are repeated at- each fluctuation in the price of gold, where it exceeds one-half of

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one per cent, so that the gold may be kept at the market-price at all times of the day; and this course of dealing until the transaction is closed, either by a return of the gold to the lender, or, if the borrower fail to return it, by a purchase of the gold by the lender for account of the borrower, or by what is called a settlement with the lender of the gold, by which the price is agreed upon, which shall not exceed the market price.

Evidence was also given showing that, according to the custom, it is the business of the broker to borrow the gold for the short sale, and to keep the loan alive until the transaction is closed; and that it is the duty of the principal to furnish the broker with the necessary money and margins to keep the loan alive, and also to furnish the gold to enable the broker to return what was borrowed; and in case of failure so to do, the broker is authorized to close the transaction by a purchase of the necessary gold at the market rate, or by a settlement with the lender of the gold at a price to be agreed upon—not to exceed the market rate.

It was proved that, on the 23d of September, 1869, gold stood at 140-J- in the morning, and subsequently rose to 141£; at which time the moneys furnished by the plaintiff, and that realized by the sale, were sufficient only to bring the gold up to 140. Defendant, Cox, told Street, the confidential clerk of plaintiff (the latter being absent from the city), about eleven o’clock a.m. of the twenty-third, that the defendants were borrowing gold to make the deliveries, and must have money; Street said he had none; that in a subsequent interview of the same day, Street said plaintiff would be home next day, and give the defendants money; that subsequently, on the same day, defendants made a written call upon plaintiff for $7,481.05, which was made on the basis that gold was 141-?f. Street was unable to pay the money; he took to the defendants’ office some railroad securities and handed them to a clerk, with a letter which stated that the plaintiff would give a check for them the next day.

On the 24th of September, 1869, gold opened at 150, and

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continued to advance steadily and rapidly until about 11.30, when it reached 162|-; at 12.15 it stood at 136, and soon after declined to 133.

The defendants, Cox & Kerneys, testified to several interviews with plaintiff on the twenty-fourth, the first of which, as they testified, occurred about 9.30 a. m., in which a demand was made of plaintff for additional margin, to which he replied: “ I cannot give it to you; I have no money; I cannot put up any more margin; this ruins me, I hope "it will not ruin you; you must take care of yourselves.”

At another conversation, about 10.30 a. m., defendants stated that if plaintiff could not put up a margin or return any gold, they would be obliged to settle with the parties from whom the gold was borrowed; to which plaintiff replied: “ You must do the best you can, you must take care of yourselves.” Defendants demanded a margin to bring the gold up to the market-price, which they required to be, paid immediately ; the amount was stated at about $80,000. Defendants .testified that they called upon the party of whom the gold was borrowed, who offered to settle at 150; that they reported this offer to plaintiff, who replied, substantially, as before, that defendants must take care of themselves, that he could do nothing for them; that defendants did thereupon settle at 150.

Plaintiff denied these conversations, testifying that his first interview with defendants on the twenty-fourth was near eleven a. m. ; that the prior interviews testified to by defendants never took place; he denied making the alleged statements as to his being ruined and as to his inability to pay margins; he also denied any authority to settle, but, on the contrary, that he told them he would hold them responsible if they settled; and testified that he heard nothing about a settlement having been made until in the afternoon when gold declined to 135, and testified substantially that he had money and credit sufficient to raise the margins. The testimony of a witness, William Fellows, for defendants had been taken de bene esse. He testified to an inter

p. 429

view with plaintiff on the morning of the twenty-fourth, when plaintiff stated in substance that he had not the money and could not make good the margins to carry the gold. Defendants offered to read this evidence upon the trial ; it was objected to and excluded; defendants’ counsel excepted. On the cross-examination of plaintiff he denied having made such statements to Fellows; subsequently the evidence of Fellows was again offered and rejected.

The court charged in substance that the case depended upon the question whether the plaintiff consented to the settlement made by the defendants.

If there was no such consent by the plaintiff to that settlement, then he was entitled to a verdict. He then laid down the following legal propositions.:

It was the defendants’ duty to demand payment of the exact sum claimed to be due at the time of the demand, and it was not a sufficient demand to demand about so much, or enough to bring the gold tip to some particular price, assumed to be the market price for the moment, whether in fact it happened to be the market price or not.

It was not a lawfxxl demand to demand instant payment of the sum demanded, but a reasonable túne for compliance should have been given and allowed as the time within which the money must be paid, and, till the expiration of sxxclx reasonable time, no debt became due and payable, and the plaintiff was not in default.

What- is a l'easonable time is usually a question of law ; and in the absence of a special contract, defining what shall be considei’ed a reasonable time, the party who is to make the payment or perform the obligation is entitled, at least, to the usual bank hours of the day within which to comply.

If an unlawful demand is made, it is void, and is in law no demand; and the statement of the party upon whom it is made, that he is unable to comply with the demand, that he is unable to pay the money then, or his general statement that he will be unable to pay the money demanded, does not

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prejudice him, or give the party making the demand any right to treat the party upon whom it is made as in default.

If the demand is a lawful demand of performance within some specified reasonable time, and the party upon whom it is made, in reply to the demand, says he will not be able to comply at the time specified, this gives to the party making the demand no right to treat the party upon whom it is made as in default, before.the expiration of the reasonable time specified. Until the expiration of that ti me. the party upon whom the demand is made is not legally in default.

The demand in this case, for the immediate payment of a sum' sufficient to bring the gold up to the supposed market-price at the time of the demand, was not a legal demand ; and if, in answer to such a demand, the plaintiff did say, “ I can’t give you the money; you must take care of yourselves,” his legal rights were not thereby prejudiced, and he was not in default.

If the demand was legal, in respect to the amount demanded, it was the duty of the defendants to allow and grant a reasonable time for performance, and until the expiration of such reasonable time the plaintiff was not in default; and a general statement that he would not be able to pay, and that the defendants “ must take care of themselves,” would not hasten the period of his default, or justify the plaintiff in buying in the .gold before the expiration of such reasonable time; and a reasonable time, in the absence of a special contract to the contrary, would include the banking hours of the day.

i Where no time for the performance of an obligation is named in the contract, the law supplies the omission, and provides that it shall be done in a reasonable time. A usage not to allow such reasonable time, but to exact immediate performance, and to treat the party as in default, in case of failure to immediately comply with the demand for immediate performance, is an unlawful usage.

If the plaintiff was in default to the defendants by reason of his failure to pay them money on demand, by way, of

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additional margin, or to supply them with gold sufficient to enable them to return the amount they had borrowed for him, the defendants had no legal right, as against the plaintiff, to make a private agreement with the parties of whom they had borrowed the gold as to the price at which the gold should be returned or settled, and no such agreement was, or is, binding upon the plaintiff. It was the duty of the defendants to buy-the gold for the plaintiff’s account at the gold exchange, in the open market, in the usual way in which gold is bought and sold, and any usage to the contrary is unlawful.

Even if the plaintiff was in default to the defendants, and if in consequence of such default they had a right to buy the gold for the plaintiff’s account, inasmuch as they did not buy the gold in such a way in the open market as they were lawfully bound in such case to do, and in such a manner as to bind the plaintiff, the defendants had not executed their agency at the time they were directed by the plaintiff to purchase the gold, and were then bound to obey the plaintiff’s instructions and purchase the gold.

To each of which propositions defendants’ counsel excepted.

Defendants’ counsel requested the court to charge as follows, among other things:

If the jury believe that the plaintiff told defendants, or either of them, that he was ruined, and that they must take care of themselves, this authorized the defendants to make the settlement which Osborn & Cammaek testified to.

The court refused so to charge, and the defendants’ counsel excepted.

That, in that event, the questions raised by plaintiff as to the validity of the demand made by defendants, and as to the reasonableness of the time to comply therewith, are of no moment.

The jury found a verdict for plaintiff for §36,586.02.

p. 432

John E. Burrill for the appellants.

Plaintiff’s statement authorized defendants to settle in any of the usual or customary modes. (Pollen v. Le Roy, 48 N. Y., 549 ; Milliken v. Dehon, 27 id., 373 ; Conklin v. King, 10 id., 546 ; Walls v. Bailey, 49 id., 473; Knowlton v. Fitch, Ct. of Apps.; Hanks v. Drake, 49 Barb., 189 , 192; Story on Agency, 60, 96-189, 199; Mollet v. Robinson, 5 L. R. [Eng. C. P.], 646; Humphrey v. Dale, 7 El. & B., 265 ; Taylor v. Stray, 2 C. B., 175 ,197; Duncan v. Hill, 6 L. R. [Eng. Exch.], 260 ; Pollock v. Stables, 12 Q. B., 765; Sutton v. Tatham, 10 Ad. & El., 27 ; Maxted v. Paine, 6 E. L. R. [Ex.], 132; 4 id., 203 .) The court erred in charging that defendants had no right to fix the price of the gold by agreement with the lenders. (Lush v. Druse, 4 Wend., 314 ; Terry v. McNeil, 58 Barb., 241 ; Clicquot Champagne, 3 Wall., 115 .) The law of pledge does not apply to this case. Knowlton v. Fitch, Ct. of Apps.; Sterling v. Jaudon, 48 Barb., 459 .) Markham v. Jaudon ( 41 N. Y., 235 ) does not overrule any of the cases relating to short sales.- (Knowlton v. Fitch, Ct. of Apps.; Sterling v. Jaudon, 48 Barb., 450 ; Pollen v. Le Roy, 40 N. Y., 549 ; Milliken v. Dehon, 27 id., 373; Mansfield v. Goodhue, 3 id., 62; Blanchmore v. Thomas, 28 id., 67, 70; Parkin v. Branchen, 22 Pick., 40 ; Brown v. McGrau, 14 Pet., 479 .) Under the contract defendants were not bound to make a demand for any precise sum. (Knowlton v. Fitch, Ct. of Apps.; Sterling v. Jaudon, 48 Barb., 450 ; Wheeler v. Garcia, 40 N. Y., 586 .) What is reasonable time is a question of fact dependent upon the peculiar circumstances of the case. (Conger v. Hudson R. Co., 6 Duer, 378 ; Green v. Haine, 1 Hilt., 254; Dininory v. N. Y. & N. H. R. R. Co., 49 N. Y., 548 ,551; Zinn v. N. J. Stbt. Co., id., 445; Markham v. Jaudon, 41 id., 245, 250, 255 ; Wadsworth v. Alcott, 6 id., 64; Esterley v. Cole, 3 id., 502; Stewart v. Carrity, 8 M. & W., 160; 2 Pars. on Con., 535-546; 1 id., 54-61 ; Story on Agency, 98, 249; Walls v. Bailey, 49 N. Y., 473 .) Plaintiff’s response that he had no money relieved defendants from making a demand for the exact sum. (Clark v. Crandall, 3 Barb., 614 ;

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Wheeler v. Garcia, 40 N. Y., 584 , 586; 5 Robt., 14; Burtis v. Thompson, 25 N. Y., 246 ; Bunge v. Koop, 48 id., 225 ; S. C., 5 Rob., 283 ; 2 Pars. on Con. [5th ed.J, 665; Story on Sales, 453; King v. Fitch, 1 Keyes, 432, 437; Mitchell v. 29 Barb., 223 ; Kacher v. Waverly, 50 id., 85; Hotaling v. Hotaling, 47 id., 170; Bochen v. Wmsburgh. Ins. Co., 35 N. Y., 131 ; Vaupell v. Woodward, 2 Sandf. Ch., 145 .) Defendants were authorized, on notice to plaintiff and neglect on his part to furnish more margin, to make the settlement they did. (Knowlton v. Fitch, Ct. of Apps.; Sterling v. Jaudon, 48 Barb., 450 ; Walls v. Bailey, 49 N. Y., 473 ; Pollock v. Stables, 12 Q. B., 765; Lienard v. Dresslar, 3 F. & F., 212; Sutton v. Tatham, 10 Ad. & El., 27; Bayliff v. Butterworth, 1 Exch., 425; Taylor v. Stray, 2 C. B. [N. S.], 175 ; Maxted v. Paine, E. L. R. [4 Exch.], 203; S. C. affmd. E. L. R. [6 Exch.], 132 ; Grissell v. Bristowe, E. L. R. [4 C. Pls.], 36, reversing S. C., id.; 3 id., 112 ; Coles v. Bristowe, E. L. R. [4 Ct. App.], 3, reversing S. C., id.; 6 Eq., 149; Sheppard v. Murphy, Irish R. [1 Eq.], 490; Duncan v. Hill, E. L. R. [6 Exch.], 255; Mollett v. Robinson, E. L. R. [7 Com. Pls.], 84, affmg. S. C., id.; 5 id., 646; Humphrey v. Dale, 7 El. & Bl., 266 ; Young v. Cole, 4 Scott, 489; Child v. Morley, 8 T. R., 610; Story on Agency, §§ 79, 96, 106, 336; 2 Pars. on Con., 535, 540.)

W. W. MacFarla/nd for the respondent.

Defendants had no authority to close the transaction when they made the settlement. (Chitty on Con., 796; Add. on Con., 942; 2 Pars. on Con., 661; Samson v. Rhodes, 8 Scott, 514; Atwood v. Cobb, 16 Pick., 227 ; Roberts v. Beatty, 2 P. & W., 63 ; Cocker v. F. H., etc., Co., 3 Sum., 530; Phillip v. Morrison, 3 Bibb., 105 ; Atkinson v. Brown, 20 Me., 67 ; Sawyer v. Hammat, 15 id., 40; Howe v. Huntington, id., 350 ; Ellis v. Thompson, 3 M. & W., 445; Greaves v. Ashlin, 3 Camp., 425; Bailey v. Simonds, 6 N. H., 159 ; Sartup v. McDonald, 6 M. & G., 593; 2 Poth, on Obl. [Evans], 44.) What is reasonable time is a question of law upon all the facts and cir

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cumstances, and cannot be controlled by usage. (Atwood v. Clark, 2 Greene, 229 ; Kingsley v. Wallis, 14 Shep., 57; Howe v. Huntington, 15 Me., 350 ; Murray v. Smith, 1 Hawkes, 41; Atwood v. Cobb, 16 Pick., 227 ; Ryan v. Hull, 13 Met., 520 ; Cocker v. F. H. Co., 3 Sum., 530; Greaves v. Ashlin, 3 Camp., 425; Schooner v. Reedside, 2 Sum., 567.) Where an obligation is to be performed on a certain day, the debtor has the whole day in which to perform it. (Tier-nan v. Napier, 2 Yerg., 410 ; Aldrich v. Albec, 1 Greene, 11 ; Savary v. Goe, 2 Wash., 140 ; Sweet v. Harding, 19 Vt., 587 ; Sartup v. McDonald, 6 M. & G., 591; Hartley v. Case, 1 Car. & P.,555; Hudson v. Barton, 1 Rol., 189; Anon., F. Moore, 122 ; Whitwell v. Brigham, 19 Pick., 121 ; Cayuga Bk. v. Hunt, 2 Hill, 638 ; De Wolf v. Murray, 2 Sandf., 170 ; Dana v. Sawyer, 9 Shep., 224; Church v. Clark, 21 Pick., 310 ; Bk. U. S. v. Carneal, 2 Pet., 548 ; 1 Domat’s C. L., by Strahan, 174, § 188; Thompson v. Riggs, 5 Wall., 679 , 680; Wheeler v. Newbold, 16 N. Y., 395 ; Higgins v. Moor, 34 id., 425 ; Taylor v. Ketchum, 5 Rob., 512 ; Merch. Bk. v. Woodruff, 6 Hill, 174 ; Bowen v. Newell, 4 Seld., 194; Dykers v. Allen, 3 Hill, 498 ; Woodruff v. Merch. Bk., 25 Wend., 673 .) The authority of an agent is strictly limited to the usages of. the business to which his agency relates. (Story on Agency, §§ 60, 96, 189, 199.) The settlement was unauthorized by the rules and usual course of business and not binding bn plaintiff. (Clymer v. Dawkins, 3 How. [U. S.], 674; Pitts v. Whitman, 2 Sto., 609 .)

There was a conflict in the evidence whether the plaintiff consented to the specific settlement made by the defendants with Osborn & Cammack,.the defendants insisting that such consent was given, and the plaintiff denying it.

The jury were 'nstructed that if there was no such consent the plaintiff was entitled to a verdict, and the verdict is conclusive upon that point. In addition to the claim that the plaintiff expressly consented to the settlement, the defendants

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gave evidence tending to establish that on different occasions,' on the morning of the twenty-fourth of September, the plaintiff, upon being asked for margin sufficient to bring the gold up to the market price, stated to the defendants that he was unable to do it, that he had no money, and, referring to the sudden and extraordinary rise in gold on that day, added: “ This ruins me; I hope it won’t ruin you; you must take care of yourselves.” This was denied by the plaintiff; but the counsel for the defendants requested the court to charge the jury that, if this was said, it authorized the defendants to make the settlement, and also obviated any objection to the form of the demand or the reasonableness of the time to comply therewith. These requests were separately refused, and exceptions taken.

The learned judge, in delivering the opinion at the General Term, notices only the first, and overruled the exception upon the ground that the request was too broad, and construed it as a request that if the jury found that the language was used, they must also find that the settlement was made as testified to, and in good faith; in other words, that the request involved an adoption by the court of the reality and bona fides of the settlement. If there had been nothing else in the charge on the subject, the request might be subject to the criticism suggested ; but other portions of the charge tend to qualify its meaning. These requests were the last made on either side, and were made at the close of the charge, and must be deemed to have been made with reference to what had taken place. The judge had charged the jury that, if the plaintiff did not consent to the settlement, he was entitled to a verdict, thereby ignoring any effect from the injunction to take care of themselves. He had also charged, at the request of the plaintiff’s counsel, specifically that the demand for' immediate payment of the margin was illegal, and that if the defendant did answer “ I can’t give you the money; you must take care of yourselves,” his legal rights were not thereby prejudiced. He had also charged that the defendants had no legal right to make a private settlement, but were obliged,

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if the plaintiff' was in default, to make the purchase of gold at public sale. He had also submitted the question to the jury whether any settlement had been, in fact, made. The request was after all this had been charged, and the point of it is that, assuming that the rights and obligations of the parties were as charged, yet, if the plaintiff told the defendants that he was ruined, and they must take care of themselves, it authorized a private settlement, although otherwise illegal. It did not profess to foreclose the question whether the settlement was made, nor of its validity, but only presented the question of authority sufficient to justify a settlement. This is confirmed by the subsequent request that this language, if used, obviated a more formal demand, which the judge had ruled was insufficient on account of the omission to specify the precise sum demanded, and also operated as a waiver of the reasonableness of time to comply with it, the court having ruled that the plaintiff was entitled to have until the close of banking hours of that day for that purpose.

This latter request did not involve the question of the settlement, and shows that the point intended to be presented was only whether the effect of the language used was a waiver of any of the strict legal rights of the plaintiff, assuming that the court had correctly determined what they were. It is quite evident from the charge made, and the refusals to charge as requested, that the learned judge intended to rule that the language specified, if used as the defendants had6 testified, could not, as a matter o"f law, operate as a waiver or change any of the legal rights which the plaintiff might otherwise insist upon, or authorize the defendants to pursue any other than the strict rules to put the plaintiff in default, and impose any liability upon him in closing the transaction. In considering whether this was erroneous, it is pertinent to refer to the attending circumstances.

The defendants had sold $404,000 of gold short, for the plaintiff, and, according to the usual custom in transacting that business, had borrowed the gold to deliver. They had

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received from the avails of the gold sold, and from the plaintiff, payment for the gold at 140. On the morning of the twenty-third gold was quoted at 140J, and at night it reached 143. On that day the defendants called upon the plaintiff for an additional margin of $7,481.05, which would secure the gold at 141-|-. The plaintiff was absent from the city on that day, and his clerk delivered some collaterals to the defendants, accompanied by a promise to give a check the next morning, which was not done. On the morning of the twenty-fourth, at ten o’clock, gold opened at 150, and rose rapidly until, at about half-past eleven o’clock, it reached 162-2-, and at a quarter past, twelve the market broke and went as low as 136, and soon after dropped to 133. The effect of the sudden and unprecedented rise in gold, as the evidence shows, was to produce the most intense excitement and consternation among those concerned in such transactions. At one time the plaintiff was deficient in margin more than $80,000, while within an hour afterward he might have closed the transaction with a balance in his favor of something over $25,000. The interviews between the parties took place during the height of the excitement, when everything was uncertain. Whether gold would depreciate or go to a much higher figure, whether the rise would continue during the day or for several days, and whether it would remain permanent or not, were questions of doubt and apprehension.

When the defendants called for additional margins, as they had a right to, if the plaintiff did say to them in earnest and seriously, as claimed, “I have no money; I cannot put up any more margin. This ruins me; I hope it won’t ruin you; you must take care of yourselves,” it was pregnant with authority and consent that the defendants might take any course to save themselves from loss which would be deemed prudent and judicious under the circumstances in which they were placed. It could scarcely have been more significant if the language had been, “ the sudden rise in gold ruins me, and I now authorize you to adopt any course which will be most likely to save yourselves from loss on my account.” This

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is the natural import of the language. If the plaintiff had intended to face the storm and stand upon his rights, he would either have remained quiet or made a different answer. It would have been idle after that for the defendants, who had borrowed the gold upon their personal responsibility, to have given the plaintiff formal notice of the precise amount demanded. They were authorized to act for their own interest and as they would for themselves. This was the request of the plaintiff, and distinguishes the case from that class of cases where the party is not foreclosed by a mere declaration beforehand of inability to perform an executory contract. (4 Exch., 359; 5 M. & W., 475.)

Under this authority the defendants had the right to close the transaction or not, and to do it in any proper and judicious . manner. They were bound to act prudently and discreetly. They could make the settlement if, under all the circumstances, that was wise and proper.. Such a course was usual between brokers when acting for themselves, and the authority allowed the defendants so to act.

We think it should have been submitted to the jury to find whether the plaintiff gave this authority, and, if so, whether the settlement was made in good faith and was a .discreet and judicious exercise of the power conferred. If it was they should be protected. If the defendants acted too hastily or unwisely, or if there was collusion or bad faith in the settlement, they ought not in morals or law to have the benefit of it. The transaction should be viewed from the stand-point occupied by the parties at the time. It was an exciting occasion; the day itself is stigmatized by all the witnesses, and has been since known as “ Black Friday.” It is now known that certain persons produced a corner (as it is called) in gold, for purposes of speculation and plunder If the truth had then been known, those interested would probably have acted differently. So, too, as the market broke badly soon after twelve o’clock, it is clear that the settlement at 150 was unfortunate. If gold had advanced to 200 and remained for several days or even for one day, it would have

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been regarded as most advantageous. It is not for us to determine which one, if either, of these parties should suffer the whole loss; but we think the circumstances alluded to should have been submitted to the jury for their consideration.

The court erred in rejecting the evidence of Fellows (taken de 5ene esse) of the conversation with the plaintiff on the morning in question. The declarations of a party relating to the controversy, or any material question involved in it, are always admissible.

The defendant, Cox, testified to the amount of gold the defendants were carrying for the plaintiff; and he had an interview with the plaintiff, between nine and ten o’clock on that morning, at which the plaintiff told him that he was unable to put up any more margin. It was offered to be shown, by the evidence oí Fellows, that he had a conversation, between nine and ten, with the plaintiff, who stated his situation with the defendants and his inability to make good his margin; that soon after he had a second interview, when the same thing was repeated; and that he also stated the amount of gold that the defendants were carrying for him. This was all excluded, except the time at which the interview took place. The conversation related to the controversy between the parties, and tended in some degree to corroborate the evidence of Mr. Cox as to the conversation which he testified to, and which, we have seen, materially affected the relations of the parties and their lights in the premises. The declarations, as far as they went, agreed with those stated by Cox, and were substantially the same, except the request sworn to by the latter, that the defendants must take care of themselves.

After the plaintiff had been sworn, this evidence was competent, upon two grounds. The plaintiff gave evidence tending to show that his pecuniary situation was not such as would be implied from his statements to Fellows and Cox. He stated that his credit was good, and that there were sources from which he could raise money; and the evidence was pertinent

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in answer to that. Again, the plaintiff denied making the statement to Fellows, especially at the first interview, and it was competent for the purpose of impeaching his credibility-. It was not collateral, but related to the material question litigated on the trial, whether the plaintiff consented to the settlement, or made such a request, or gave such authority to the defendants as justified them in making the settlement.

There are other serious questions presented which it is unnecessary to consider.

The judgment must be reversed and a new trial granted, -costs to abide the event.

All concur.

Judgment reversed.