for the purposes of the corporation or to effect a consolidation, and while he can waive that right, he cannot be deprived of it without his consent except when the stock is issued at a fixed price not less than par, and he is given the right to take at that price in proportion to his holding, or in some other equitable way that will enable him to protect his interest by acting on his own judgment and using his own resources. This rule is just to all and tends to prevent the tyranny of majorities which needs restraint, as well as virtual attempts to blackmail by small minorities which should be prevented.

The remaining question is whether the plaintiff waived his rights by failing to do what he ought to have done, or by doing something he ought not to have done. He demanded his share of the new stock at par, instead of at the price fixed by the stockholders, for the authorization to sell at $450 a share was virtually fixing the price of the stock. He did more than this, however, for he not only voted against the proposition to sell to Blair & Co. at $450, but, as the court expressly found, he "protested against the proposed sale of his proportionate share of the stock, and again demanded the right to subscribe and pay for the same which demands were again refused," and "the resolution was carried notwithstanding such protest and demands." Thus he protested against the sale of his share before the price was fixed, for the same resolution fixed the price, and directed the sale, which was promptly carried into effect. If he had not attended the meeting, called upon due notice to do precisely what was done, perhaps he would have waived his rights, but he attended the meeting and, before the price was fixed, demanded the right to subcribe for 221 shares at par, and offered to pay for the same immediately. It is true that after the price was fixed he did not offer to take his share at that price, but he did not acquiesce in the sale of his proportion to Blair & Co., and unless he acquiesced the sale as to him was without right. He was under no obligation to put the corporation in default by making a demand. The ordinary doctrine of demand, tender, and refusal has no application to this case. The plaintiff had made no contract. He had not promised to do anything. No duty of performance rested upon him. He had an absolute right to the new stock in proportion to his holding of the old, and he gave notice that he wanted it. It was his property, and could not be disposed of without his consent. He did not consent. He protested in due time, and the sale was made in defiance of his protest. While in connection with his protest he demanded the right to subscribe at par, that demand was entirely proper when made, because the price had not then been fixed. After the price was fixed it was the duty of the defendant to offer him his proportion at that price, for it had notice that he had

not acquiesced in the proposed sale of his share, but wanted it himself. The directors were under the legal obligation to give him an opportunity to purchase at the price fixed before they could sell his property to a third party, even with the approval of a large majority of the stockholders. If he had remained silent, and had made no request or protest he would have waived his rights, but after he had given notice that he wanted his part and had protested against the sale thereof, the defendant was bound to offer it to him at the price fixed by the stockholders. By selling to strangers without thus offering to sell to him, the defendant wrongfully deprived him of his property, and is liable for such damages as he actually sustained.

The learned trial court, however, did not measure the damages according to law. The plaintiff was not entitled to the difference between the par value of the new stock and the market value thereof, for the stock holders had the right to fix the price at which the stock should be sold. They fixed the price at $450 a share, and for the failure of the defendant to offer the plaintiff his share at that price we hold it liable in damages. His actual loss, therefore, is $100 per share, or the difference between $450, the price that he would have been obliged to pay had he been permitted to purchase, and the market value on the day of sale, which was $550. This conculsion requires a reversal of the judgment rendered by the Appellate Division and a modification of that rendered by the trial court.

The order appealed from should be reversed and the judgment of the trial court modified by reducing the damages from the sum of $99,450, with interest from January 30, 1902, to the sum of $22,100, with interest from that date, and by striking out the extra allowance of costs, and as thus modified the judgment of the trial court is affirmed, without costs in this court or in the Appellate Division to either party.

HAIGHT, J. (dissenting). I agree that the rule that we should adopt is that a stockholder in a corporation has an inherent right to purchase a proportionate share of new stock issued for money only, and not to purchase property necessary for the purposes of the corporation or to effect a consolidation. While he can waive that right he cannot be deprived of it without his consent, except by sale at a fixed price at or above par, in which he may buy at that price in proportion to his holding or in some other equitable way that will enable him to protect his interest by acting on his own judgment and using his own resources. 1, however, differ with Judge VANN as to his conclusions as to the rights of the plaintiff herein. Under the findings of the trial court the plaintiff demanded that his share of the new stock should be issued to him at par, or $100 per

He

share, instead of $450 per share, the price offered by Blair & Co. and the price fixed at the stockholders' meeting at which the new stock was authorized to be sold. This demand was made after the passage of the resolution authorizing the increase of the capital stock of the defendant company and before the passage of the resolution authorizing a sale of the new stock to Blair & Co. at the price specified. After the passage of the second resolution he objected to the sale of his proportionate share of the new stock to Blair & Co., and again demanded that it be issued to him, and the following day he made a legal tender for the amount of his portion of the new stock at $100 per share. There is no finding of fact or evidence in the record showing that he was ever ready or willing to pay $450 per share for the stock. He knew that Blair & Co. represented Marshall Field and others at Chicago, great dry goods merchants, and that they had made a written offer to purchase the new stock of the company provided the stockholders would authorize an increase of its capital stock from $500,000 to $1,000,000. knew that the trustees of the company had called a special meeting of the stockholders for the purpose of considering the offer so made by Blair & Co. He knew that the increased capitalization proposed was for the purpose of enlarging the business of the. company and bringing into its management the gentlemen referred to. There is no pretense that any of the stockholders would have voted for an increase of the capital stock otherwise than for the purpose of accepting the offer of Blair & Co. All were evidently desirous of interesting the gentlemen referred to in the company, and by securing their business and deposits increase the earnings of the company. This the trustees carefully considered, and in their notice, calling the special meeting of the stockholders, distinctly recommended the acceptance of the offer. What, then, was the legal effect of the plaintiff's demand and tender? To my mind it was simply an attempt to make something out of his associates, to get for $100 per share the stock which Blair & Co. had offered to purchase for $450 per share; and that it was the equivalent of a refusal to pay $450 per share, and its effect is to waive his right to procure the stock by paying that amount. An acceptance of his offer would have been most unjust to the remaining stockholders. It would not only have deprived them of the additional sum of $350 per share, which had been offered for the stock, but it would have defeated the object and purpose for which the meeting was called, for it was well understood that Blair & Co. would not accept less than the whole issue of the new stock. But this is not all. It appears that prior to the offer of Blair & Co. the stock of the company had never been sold above $450 per share; that

thereafter the stock rapidly advanced until the day of the completion of the sale on the 30th of January, when its market value was $550 per share; but this, under the stipulation of facts, was caused by the rumor and subsequent announcement and consummation of the proposition for the increase of the stock and the sale of such increase to Blair & Co. and their associates. It is now proposed to give the plaintiff as damages such increase in the market value of the stock, even though such value was based upon the understanding that Blair & Co. were to become stockholders in the corporation, which the acceptance of plaintiff's offer would have prevented. This, to my mind, should not be done. I, therefore, favor an affirmance.

LEO et al. v. McCORMACK. (Court of Appeals of New York. Nov. 13, 1906.) BROKERS-SALE BY BROKER-FRAUD OF PRINCIPAL RECOVERY OF PRICE.

Plaintiff, a broker operating on the New York Stock Exchange, purchased certain stock for a customer, which he carried on margin. Subsequently, the customer, by a fraudulent scheme, induced defendant, another broker, to buy such stock, which was worthless, for a wholly irresponsible customer, and after the sale, without waiting to receive from defendant the amount which he had promised to pay, plaintiff paid his customer the amount due him over plaintiff's advances. Held that, owing to the fraud of his customer, plaintiff was not entitled to recover from defendant any amount in excess of plaintiff's interest as pledgee.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Arnold Leo and others against John L. McCormack. From a judgment of the Appellate Division (94 N. Y. Supp. 1151), affirming a judgment in favor of plaintiffs, defendant appeals. Reversed, and new trial granted.

William J. Leitch, for appellant. Herbert Noble and Massey Holmes, for respondents.

HISCOCK, J. The plaintiffs and defendant are brokers, the latter dealing on the curb. The former, acting for certain customers, sold to the latter, acting for an undisclosed customer, 150 shares of stock at $40 per share, and this action is brought to recover said purchase price. The defendant has refused to pay the same, upon the ground that the persons owning said stock were guilty of fraud in effecting its sale to him, and that such fraud constitutes a defense against plaintiffs, who were their agents. The learned courts below have respectively directed and affirmed the direction of a verdict for plaintiffs, upon the ground that the ordinary

rules of principal and agent did not apply to the plaintiffs as brokers. We think such error has been committed in this disposition of the case as calls for a reversal of the judgment.

Prior to the date of the sale in question plaintiffs, acting as brokers, had purchased and were then carrying upon a margin for one Uhren 50 shares, and for one Cosmides upwards of 100 shares, of the capital stock of the Snap Hook & Eye Company. Said customers ordered plaintiffs to sell on the curb Uhren's stock and 100 shares of that belonging to Cosmides. Before this order

and the hour of its execution, these customers, acting with others, had concocted a contemptible fraud by which to entice the defendant to buy said stock so ordered to be sold, which was absolutely worthless, for an utterly irresponsible purported customer, und the defendant fell a victim to the scheme; defendant's pleadings have prevented him from establishing, if he could have done so, that plaintiffs were parties to or cognizant of the scheme when they received and executed the order of the conspirators.

We do not gather that the courts below doubted, or that the plaintiffs deny, that the fraud of plaintiffs' customers would, under ordinary circumstances, be a bar to an action brought by an agent to enforce a contract made in their behalf. It has, however, been strenuously urged and thus far found that there is something so peculiar about the relation between a broker and his customer that the same is not subject to the ordinary principles and rules of agency. It very likely may be conceded that, as the result of long usage and of various rules made by the Stock Exchange, some exceptions have been ingrafted upon the general rules of principal and agent for the particular benefit and help of brokers. But we are aware of no reason and no adjudication which should or does exempt such relationship from the fundamental principles which are applicable to other phases of the relation of agency. In this particular case, upon the order and request of Cosmides and Uhren, the plaintiffs had bought for them certain shares of stock, which they then held and carried for their respective accounts. These parties ordered plaintiffs to sell said stock, and they did so, delivering, as it appears, the identical certificates which had been taken and carried for their customers. Under such circumstances, it would require some justification with which we are unacquainted to lead us to say that the customers were not the principals, and that the plaintiffs were not their agents in the transaction, and governed as such by the general rules of law upon that subject. Reaching this conclusion, it is, as we have said, substantially conceded that the fraud of the customers is to be imputed to the plaintiffs as their representatives.

There is, however, still another aspect to this case. The plaintiffs had received mar

gins from their conspiring customers to the apparent extent of about 50 per cent. of the price originally paid for the stock, which was about $40 per share. The balance of this purchase price the brokers had advanced, and for this amount they were pledgees in possession of, and having a lien upon, the stock. Their customers were not entitled to effect a sale of the stock without the concurrent action of the brokers as pledgees, and therefore in making the sale the plaintiffs acted in a dual capacity of brokers and agents for their customers, and as pledgees in their own behalf for the amount which they had advanced. As to their own interest as pledgees, we think it may be said that they acted as principals, and therefore are not contaminated by or charged with the fraud of their customers so as to prevent their recovery of that portion of the purchase price which shall be equivalent to the amount of their lien.

Another reason has been urged why plain. tiffs should be allowed to recover the entire amount of the selling price. It appears that immediately after the sale, without waiting to receive from defendant the amount which he had promised to pay, plaintiffs by two checks paid to their customers $4,000, which seems to have been about all that was due to them over plaintiffs' advances. Evidence has been given of the custom of brokers to pay to their customers the proceeds of stock sales before actually received, and it is urged that by these payments plaintiffs have so changed their position that defendant ought not to be allowed to interpose his defense. This argument does not commend itself to our approval. There are some things in the record which suggest the idea that the plaintiffs are making this fight for the benefit of their discredited principals, and have been willing to so adjust matters between themselves and the latter as to fortify the claim for recovery. Assuming, however, that these payments were made in perfect good faith, we know of no reason why defendant's rights should be injured by them. The evidence introduced upon this subject seems simply and only to indicate that if a broker selling stock believes that his customer is reputable and responsible, he sometimes pays the proceeds to him in advance, thereby trusting him to that extent. Defendant was in no way a party to plaintiffs' alleged confidence in their worthy customers, and we think he should not be made to suffer if it has been misplaced.

In accordance with these views, the judgment appealed from should be reversed, and a new trial granted, with costs to appellant in both courts to abide the event.

CULLEN, C. J., and EDWARD T. BARTLETT, HAIGHT, VANN, and CHASE, JJ., concur. GRAY, J., absent.

Judgment reversed, etc.

MENT OF RETIRED POLICEMAN-LIMITATIONS. New York City Charter, Laws 1901, p. 129, c. 466, § 302, providing that no proceeding shall be brought for the reinstatement to the police force of any member unless it is instituted within four months after the decision or order sought to be reviewed, does not apply to a proceeding to restore to active duty a member of the police force retired on account of alleged physical incapacity.

2. APPEAL-REVIEW-DECISION OF INTERMEDIATE COURTS-QUESTION OF FACT.

On an application for mandamus, the claim that the relator was guilty of laches, and that he has waived any right to relief, presents questions of fact, the determination of which by the trial court, having been affirmed by the Appellate Division, cannot be reviewed by the Court of Appeals.

[Ed. Note. For cases in point, see Cent. Dig. vol. 3, Appeal and Error, §§ 4322, 4324.]

Appeal from Supreme Court, Appellate Division, Second Department.

. Application by Henry Hurlbut for mandamus to Theodore A. Bingham, police commissioner of the city of New York. From an order of the Appellate Division, Second Department (100 N. Y. S. 1136, 113 App. Div. -), affirming an order granting a motion for a peremptory writ of mandamus to compel

the defendant to restore the relator to active duty on the police force of the city of New York, defendant appeals. Affirmed.

John J. Delany, Corp. Counsel (James D. Bell and Patrick E. Callahan, of counsel), for appellant. Alfred E. Sander, for respondent.

PER CURIAM. We are of the opinion that the limitation on the time to commence a proceeding, contained in section 302, New York City Charter, Laws 1901, p. 129, c. 466, does not apply to a proceeding to restore to active duty a member of the police force who has been retired on account of alleged physical incapacity. The claim that the relator was guilty of laches in commencing this proceeding, and that he has waived any right to relief herein, present questions of fact which, although they might have been determined otherwise, have been determined in the relator's favor by the court at Special Term, and such determination has been unanimously affirmed by the Appellate Division. We cannot review such questions of fact.

The order should be affirmed, with costs.

CULLEN, C. J., and EDWARD T. BARTLETT, HAIGHT, VANN, WERNER, WILLARD BARTLETT, and CHASE, JJ., concur.

Order affirmed.

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ALDEN SPEARE'S SONS Co., Appellant, v. ALGER, Respondent. (Court of Appeals of New York. June 5, 1906.) Appeal from judgment of the Appellate Division of the Supreme Court in the First Judicial Department (103 App. Div. 597, 92 N. Y. Supp. 1114), entered April 5, 1905, affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term, and an order denying a motion for a new trial in an action to recover damages alleged to have been caused plaintiff through false representations made by defendant. William E. Warland, for appellant. George Lawyer, for respondent.

In re ASHHEIM'S ESTATE. (Court of Appeals of New York. June 21, 1906.) Appeal by permission from an order of the Appellate Division of the Supreme Court in the First Judicial Department (111 App. Div. 176, 97 N. Y. Supp. 607), entered February 14, 1906, which affirmed an order of the New York County Surrogate's Court directing the appellant herein to file his account as executor of Solomon W. Ashheim, deceased. The following questions were certified: "First. Is an executor who has duly qualified and received assets of his testator's estate, for which he has never accounted, so far a trustee as to bring him within the rule that the statute of limitations does not commence to run in favor of a trustee, against one otherwise entitled to an account, until such trustee has repudiated his trust? Second. Where a third party is created by will a trustee for a term not yet expired of personal property, of which, as assets of his testator's estate, the executor of such will has taken possession, but has not delivered the same to the trustee or accounted therefor, is the lapse of over 20 years from the issuance of letters testamentary a bar to a proceeding to compel such executor to account, by one interested in said trust as a contingent remainderman, not yet entitled to receive any benefit therefrom?" Sol. A. Cohn, for appellant. John De Witt Warner, for respondents.

PER CURIAM. Order affirmed, with costs, an opinion below. First question certified answered in the affirmative; second in the negative.

CULLEN, C. J., and GRAY, O'BRIEN, EDWARD T. BARTLETT, WERNER, HISCOCK, and CHASE, JJ., concur.

BACHMAN, Respondent, v. HARRINGTON, Appellant. (Court of Appeals of New York. May 25, 1906.) No opinion. Motion for reargument denied, with $10 costs. See 184 N. Y. 458, 77 N. E. 657.

BARNES, Respondent, v. NEW YORK ELECTRIC VEHICLE TRANSP. CO., Appellant. (Court of Appeals of New York. June 5, 1906.) Appeal from a judgment of the Appellate Division of the Supreme Court in the First Judicial Department (103 App. Div. 609, 93 N. Y. Supp. 1120), entered April 19, 1905, affirming a judgment in favor of plaintiff en tered upon a verdict and an order denying a

motion for a new trial in an action to recover for personal injuries and injuries to property, alleged to have been occasioned through defendant's negligence. Eugene Lamb Richards, Jr., and Ralph G. Miller, for ap pellant. Julien T. Davies, Jr., Ward W. Pickard, and George W. McAdam, for respondent. PER CURIAM. Judgment affirmed, with costs.

CULLEN, C. J., and GRAY, EDWARD T. BARTLETT, HAIGHT, WERNER, and HISCOCK, JJ., concur. O'BRIEN, J., absent.

BAYLES, Respondent, v. STRONG, Appellant. (Court of Appeals of New York. June 5, 1906.) Appeal from a judgment of the Appellate Division of the Supreme Court in the Second Judicial Department (104 App. Div. 153, 93 N. Y. Supp. 346), entered May 8, 1905, affirming a judgment in favor of plaintiff entered upon a verdict and an order denying a motion for a new trial in an action to recover for an alleged breach of contract. Selah B. Strong and A. A. Spear, for appellant. Livingston Smith, for respondent.

BILLINGHAM, Respondent, v. E. P. GLEASON MFG. CO., Appellant. (Court of Appeals of New York. May 25, 1906.) Appeal from a judgment of the Appellate Division of the Supreme Court in the First Judicial Department (101 App. Div. 476, 91 N. Y. Supp. 1046), entered February 24, 1905, affirming a judgment in favor of plaintiff entered upon decision of the court on trial at Special Term in an action by the legatee of a stockholder to have a dividend certificate previously issued by defendant, and payable at its pleasure, declared presently payable, and to recover the amount thereof. Roderick Robinson, for appellant. Oscar Wagner, for respondent.

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PER CURIAM. Judgment affirmed, with costs.

CULLEN, C. J., and O'BRIEN, HAIGHT, VANN, WERNER, and HISCOCK, JJ., concur. WILLARD BARTLETT, J., not sitting.

BILLINGHAM, Respondent, v. E. P. GLEASON MFG. CO., Appellant. (Court of Appeals of New York. June 12, 1906.) No opinion. Motion to amend remittitur denied, with $10 costs. See 185 N. Y. -, supra.

BLUM, Appellant, v. WHITNEY et al., Respondents. (Court of Appeals of New York. June 21, 1906.) No opinion. Motion for reargument_denied, with $10 costs. See 185 N. Y. 232, 77 N. E. 1159.

BLUN, Respondent, v. MAYER et al., Appellants (two cases). (Court of Appeals of New York. Oct. 16, 1906.) Motion to dismiss appeals from judgments of the Appellate Division