
    Gustave A. Helm, Respondent, v. Thomas A. Ennis and Charles F. Stoppani, Composing the Firm of Ennis & Stoppani, Appellants.
    First Department,
    November, 1905.
    Stock purchased on margin ^ when purchaser not entitled to recover - profits made by a broker delivering stock obtained at lower price.
    When stock is purchased through brokers on a margin, the brokers are not required to- retain the identical stock purchased, nor is the-purchaser'entitled to receive the identical stock. Hence, when such purchaser orders a subsequent delivery of the stock and pays for the same at the contract price, he is not entitled to recover a profit'the brokers have made through being able .to secure the stock actually delivered at a lower figure owing to a fall in the market.
    
      
      It seems, that if plaintiff retains the stock delivered and does not rescind the transaction, it is immaterial whether the brokers had the stock purchased for the plaintiff actually delivered to them at the time they reported the order executed. Under such circumstances no damage is shown.
    Appeal by the defendants, Thomas A. Ennis and another, composing the firm of Ennis & Stoppani, from a final judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 14th day of January, 1904, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the 14th day of January, 1904, denying the defendants’ motion for a new trial made upon the minutes.
    
      Treadwell Cleveland, for the appellants.
    
      James C. Lenney, for the respondent.
   Laughlin, J.:

The defendants were stockbrokers and members of the Consolidated Stock and Petroleum Exchange of New York. The plaintiff was one of their customers. On the 26th day of September and 5th day of November, 1902, and 3d day of March, 1903, respectively, the plaintiff directed the defendants to purchase certain stocks for him on margins. On each occasion they promptly reported to him that they had purchased the stock. and rendered an account charging him with the purchase price and commissions. They subsequently rendered statements showing that they had credited him with a dividend received on part of the stock and had charged him with interest on the balance of the account. On the 25th day of May, 1903, the plaintiff telephoned the manager of the .defendants’ Brooklyn office, through whom he had dealt with them, that he was ready to take up the stock and pay the balance owing to them .on account of the transactions, and was informed that it would take a few days to get the stock. The plaintiff was about to leave the city and urged prompt action on the part of the defendants in delivering the stock, and on the twenty-eighth of May they delivered to the _Borough Bank of Brooklyn, pursuant to the plaintiff’s direction, stock of the description and amount which he had authorized them to purchase for him together with a statement of the account which, as to the purchase price, agreed with the accounts originally rendered by them, The plaintiff thereupon gave them a check' for the balance of the account as thus rendered. He subsequently learned that the certificates of stock which were delivered to him by the defendants were purchased by them on the 21th and 28th days of May, 1903^ and at a lower price than that which they had charged him and which he had paid. This action was brought to recover the difference between the purchase price of the stock as reported to the plaintiff by the defendants, according to which he settled with them, and the amount they paid for the stock actually delivered. The theory of the action as shown by the allegations of the. complaint is that the defendants were acting in a fiduciary capacity and that having reported to him that they purchased stock at a higher price than that which they paid for the stock actually delivered they are liable to him for the difference, he having settled with them in ignorance of the fact. But this was a stock transaction on margin. The rule is well settled in such ease that the brokers are not obliged to' retain the identical stock for their, customer, nor is he entitled to receive it. It is the duty of the brokers employed to purchase stock on margins to. have in their possession, or subject to their com' trol at all times, sufficient Stock to enable them to comply with any demand for the stock on the part of their customer, and to deliver the stock upon being tendered the balance owing to them;' but the customer is not entitled'to the identical stock purchased for him. (Caswell v. Putnam, 120 N. Y. 153.) Owing.to the form in which this action is brought it is. unnecessary to decide some interesting questions argued by the respective counsel, for the reason that they are not necessarily, presented. It appears that the stock was purchased at the time and for the.prices originally reported to the'plaintiff; but, by the clearing house system of balancing: the accounts of.the members, adopted by the exchange, the stock so purchased was credited on other sales made by the brokers. The plaintiff accepted and still retains the certificates of stock delivered to him, which are of the denomination and amount which he directed'the defendants to purchase for him, and he has not elected to rescind the settlement and tender back the stock.' In these circumstanees it is immaterial whether the brokers had the stock which they purchased for the plaintiff actually delivered to them at the respectivé times when they reported to the plaintiff that they 'had executed his orders, for it does not appear that the plaintiff has been prejudiced. He has received and accepted the stock, and he would not in any event have been entitled to the identical stock originally purchased. It does not appear that he desired to have the stock delivered to him or sold for him until three days before it was received and accepted by him ; and it does not appear that its value changed during those three days. Nor is the action brought on that theory. In these circumstances no damages were shown, even if the defendants after purchasing did not retain the stock which they reported having purchased, and the plaintiff has failed to establish a cause of action.

It follows, therefore, that the judgment and order should be reversed and a new trial granted, with costs* to appellant to abide the event.

O’Brien, P. J., Patterson, Ingraham and McLaughlin, JJ., concurred.

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