
    Edward H. Myers and Charles Neukirch, Respondents, v. Clinton P. Paine and Percy B. McLaran, Appellants.
    
      Insufficiency of an answer alleging that the parties belonged to a pool to speculate in stocks— objection on the trial — appeal.
    
    
      A defense interposed to an action brought by stockbrokers against their customers for a balance alleged to be due them, which states, among other things, that the account exhibited by the plaintiffs related to a share taken by the-defendants in a pool to speculate in a stock, to which pool a firm known as Davis & Co. were parties; that Davis & Co. withdrew from the pool upon a certain date, . and notified the plaintiffs of their withdrawal, and that, by reason thereof, the pool was dissolved, and that it thereupon became the duty of the plaintiffs to notify the defendants of such withdrawal, does not state any matter of defense, where there is a failure to allege that the plaintiffs failed to notify the defendants of the withdrawal of Davis & Co., or that any injury resulted to the defendants by reason of the failure of the plaintiffs to give such notice, and where the only relief asked in the answer is a dismissal of the complaint. -
    Where, on a motion made at the close of the evidence, objection is taken to the insufficiency of the answer in setting forth a defense, it cannot he successfully urged on appeal that the plaintiffs, by permitting the evidence to he given; waived the defect in the pleading, or consented to the litigation of the.issue.
    Appeal by the defendants, Clinton P. Paine and another, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 7th day of August, 1896, upon the report of a referee.
    
      Eugene D. Hawkins, for the appellants.
    
      A. J. Simpson, for the respondents.
   Williams, J.:

. Action to recover a balance alleged to be due and owing by the defendants for moneys expended and services rendered by the plaintiffs, as brokers, in the purchase and sale of stock at the request of the defendants. The account was closed by plaintiffs December 17, 1895, when it was claimed that the gross charge or debit was $26,712.42, and that the stock was closed out and realized $16,787.50, leaving a balance of $9,924.92, for which the action was brought. It was alleged in the fourth defense, added to the answer by way of amendment during the trial, that this account related to a share or interest taken by the defendants in a pool or combination to speculate in a certain stock, to which pool or combination Davis & Co. were parties and in which they had an interest; that Davis & Co. withdrew from the pool or combination July 3, 1895, and notified plaintiffs of such withdrawal, and by reason thereof the pool or combination was dissolved and it thereupon became the duty of plaintiffs to notify the defendants of such withdrawal. It was not alleged that the plaintiffs failed to notify the defendants of the withdrawal of Davis & Co., or that any injury resulted to the defendants by reason of the failure to give such notice, and the only relief asked by the defendants was a dismissal of the complaint.

At the close of the evidence the plaintiffs moved that judgment in their favor be entered upon the ground that no defense had been proved or established by the defendants within the issues raised by the pleadings. Ro application was made by the defendants to further amend their answer.

The decision of this motion was reserved. The referee in deciding the case held that the matters in the statement of the fourth defense set forth in the defendants’ answer constituted no defense to the plaintiffs’ cause of action, and in his opinion said: “ The fourth defense set.up in the defendant’s answer is, in substance, that on or about the third day of July, 1895, the said pool was dissolved by the withdrawal therefrom of said S. D. Davis & Co., and 1 that it' thereupon became the duty of plaintiffs to notify defendants that said Samuel D. Davis & Co. had taken the-stock to which they were entitled in said pool or combination, and had withdrawn from the same.’ It is not alleged that such duty was neglected, or that the defendants sustained any injury in consequence of either the plain-' tiffs’ omission to give such notice, or the withdrawal of Davis & Co., or the dissolution of the pool. I am unable to see how the matters alleged in this defense furnish any answer to the plaintiffs’ cause of action.”. . .

The counsel for defendants, in his brief submitted on this appeal, states “that the failure of the plaintiffs’ firm, Myers & Co., from July 1st to November 11th, to notify defendants, as members of the ‘ pool,’ that the maximum number of shares (8,000) had been bought and were held for the pool account. July 1st, that Davis & Co.'had taken up and paid for their interest (5,000 shares) July 3rd and withdrawn from the pool,’ thereby terminating it as of that date, and that plaintiffs held defendants liable for their interest (1,000 shares), was a breach of contract.

“ That, by reason of this breach of contract by plaintiffs, defendants, in their adjustment of their account with plaintiffs, are entitled to be credited with a sum equivalent to the market price of 1,000 shares of the stock on July 1st, or within a reasonable time thereafter ($25 or $26 a share), and not at the market rates December 17th ($16 to T7-J-), when plaintiffs sold the stock.”

The claim is that, if the referee had considered this defense, the amount found due the plaintiffs would have been reduced to less than $1,000.

It is apparent that this issue was not properly raised by the pleadings. There was no suggestion in the complaint of any pool or combination. That was first suggested in the answer. No denial of the allegation of the complaint raised such an issue. It was raised, if at all, by the allegations in the fourth defense. And those allegations were clearly insufficient to raise such issue, there being no allegation of breach of the contract, or of failure to perform the duty of notifying the defendants of Dávis & Co.’s withdrawal from the - pool or combination, or that any injury resulted to the defendants from such withdrawal or the dissolution of the pool. .Nor is any suggestion made, in the demand for relief in the answer, that the amount of the balance otherwise owing by.the defendants should be reduced by reason of this breach of contract' or neglect of duty on the part of the plaintiffs. There can be no claim made now that the question of the insufficiency of the pleadings was not raised.

It was clearly suggested by the plaintiffs’ motion at the close of the evidence; and neither at that time nor at any time prior to the decision of the case was any application made to further amend the answer so as to conform the pleadings to the proofs given on the trial.

Under these circumstances, the defendants and appellants are not in a position on appeal to claim that the case was improperly decided or should be reversed. It cannot be said that the plaintiffs, by permitting the evidence to be given, waived the defect in the pleading or consented to the litigation of this issue. The evidence was competent under the pleading as it was, the defendants having sought by reason thereof to defeat the plaintiffs’ right to recover any part of their claim.

The only relief asked for was the dismissal of ■ the comjfiaint. The plaintiffs, at the close of the evidence, insisted upon the defect in the pleading and waived nothing.

The judgment should be affirmed, with costs.

Van Brunt, P. J., Barrett, Rumsey and Patterson, JJ., concurred.

Judgment affirmed, with costs.  