Bosoian v. Hubbard

This is an action against the members of á partnership doing business as cotton brokers, to recover damages for closing out, without notice to the plaintiff, certain speculative accounts which they were.- carrying for him pursuant.;to. a' contract- the,¡-t^rms., of which are in dispute, the plaintiff claiming that it was orahapd the. defendants that it was partly oral. and partly written. For the purposes of this appeal, the verdict for the defendants having been directed by the court, all contested facts must he treated as established in favor of the plaintiff. It appears, ■ then, that .in January, 1904, the plaintiff had two conversations with one of the defendants *511at their offices, during which he was told what the margin and rate of brokerage would be, and was assured by the defendant Dilling ham that the defendants would not close out his account without calling on him for more margin. Thereupon and in pursuance of this understanding the plaintiff transferred his ae'countfrom another broker and began doing a marginal business in cotton through the defendants, spending most óf his time at their office, eating his luncheons and having his address there. When, during business hours, he was not there, he was in the Cotton Exchange gallery, three minutes distant. After each purchase or sale by the plaintiff of a contract for the future delivery of cotton, one of the defendants’ clerks .would hand the plaintiff a written memorandum showing the amount, price and time of the particular cotton bought or sold. These memoranda were made upon a printed form, at the foot .of which, among other printed matter, appeared the following:

“ It is further understood that on all marginal business, the right is reserved to close transactions when margins are running out, without further notice, and to settle contracts in accordance with' rules and customs of Exchange where order is executed.

“IÍUBBARD BROS..& CO.”

The plaintiff is an Armenian, uneducated,, reads with difficulty and never read the .printed matter on these, memorandum slips. On Saturday, June 11, 1904, at about ten-thirty in the forenoon, the plaintiff, while in the defendants’ office, told the margin clerk that he wished to buy 200 bales of July cotton. Tlie-clerk saying, “ Let me see if you have enough margin,” figured the margin, said : “ Yes, you can buy it,” and ordered another clerk to buy it for the plaintiff. A few minutes. later the plaintiff was handed a memorandum', Exhibit 9, reading: “ 10:36A. Mr. Bosoian bought two July 12.20 II. B.” At that time the ticker gave the price of cotton as 12.07, but on calling the clerk’s attention to the large difference in price against him, the plaintiff was told that it was a mistake. He declared his intention to go next door to the gallery of the Cotton Exchange, and asked the clerk to let him know if it bedame necessary to put up more margin, and the clerk said: “ All right.” At about fifteen minutes before twelve, while in the gallery of the Exchange^ the plaintiff heard 12.41 offered for July cotton, went *512back to defendants’ office to sell at tlie considerable profit theappearing, and found that lie had, been soldi out at 12.22. The clerk, in explanation, told him that they thought fcotton was going down, and “ Hr. Dillingham didn’t let me send to you over on the Cotton Exchange gallery. He said to me ‘ Close him out,’ and so I closed you Out.” Much of the foregoing was controverted by the defendants’ witnesses, but this only raised a question of fact for the jury.

At the close of all the evidence the learned trial court directed a verdict for the defendants on the ground that the contract was modified by the plaintiff’s “ silent acquiescence, despite the repeated notices of that modification,” that is, the paragraph above quoted,, which purported to reserve to the defendants the fight to close out marginal transactions without notice. An exception was duly, taken, to the dismissal of the complaint.

. Ho authority has been-cited in support of this theory oí modifica- ■ tion, nor have I been able to find any. If it is sound, a party to a contract may modify it by giving repeated notices of his “ modification ” to the other party, provided the latter silently receives them, they being printed on slips carrying brief written-memoranda, made necessary by the nature of the contract. This cannot be true, for there is no mutuality of agreement which is as. indispensable to the modification as to the making of a contract.

The waiver of a provision of a contract is in' effect a modification of it, and the. Court of Appeal's; has held that a waiver cannot be inferred 'from mere silence. (Titus v. Glens Falls Ins. Co., 81 N. Y. 410, 419.)

Ho modification was made, out in the case' at bar. The case should liave-been submitted to the jury,'and the judgment should, therefore, be-reversed and a new trial granted. ■ ".

Jenks, Hooker, Gaynor and Bien, JJ., concurred.,

. Judgment and'.order reversed and new trial granted, costs to abide the event. ' '