9/15/2023 0 Comments Donald j faehner paine webber![]() Upon the question whether the damages should be computed upon the basis of the value of the stock on the date of its conversion or upon its value some eight months later, as plaintiffs contend, the rule which governs is found in present section 3336 of the Civil Code. The right of the parties to contract with respect to the conclusiveness of statements of transactions had would seem to be particularly applicable to transactions between stock brokers and their customers when dealing with securities of fluctuating value. This rule has no application where the parties have contracted that they shall be bound by and precluded from questioning the existence of certain facts established or to be established in a certain manner. Defendant relies upon and quotes authority for the rule that the statement of an account may be corrected upon a showing of error and mistake therein. However plausible may have been defendant's contention that the second confirmation was issued in error, the arbitrators were warranted in disregarding this contention and in giving full effect to the provisions of the contract we have quoted, under which, upon the facts in evidence, each party was precluded from questioning the conclusiveness of the confirmations issued by defendant. Since plaintiffs were obligated to pay for the stock, defendant was obligated to deliver it. Plaintiffs did not object after receiving written notice of the execution of the two orders and, therefore, were bound to pay for 400 shares of stock. We may notice first defendant's contention that there was no conversion of the stock for the reason that it was not purchased for plaintiffs' account. On October 10, 1959, plaintiffs sold 1,440 shares, which was all their American Motors stock, at $46.875 per share. March 23, 1959, plaintiffs placed with defendant two orders of 200 shares each for the purchase of American Motors stock at $32.125 per share March 23, 1959, defendant notified plaintiffs by mail that both orders had been executed March 28, 1959, defendant claiming that only one order had been received, and that one confirmation was in error, gave notice to plaintiffs cancelling the same and did not purchase the stock March 30, 1959, plaintiffs demanded delivery of the 200 shares in question, which demand was, and ever since has been refused the market value of American Motors on March 30, 1959, was $35.125 per share and on November 4, 1959, it was $96.875 per share. Defendant, a copartnership, was a stock broker and plaintiffs were its customers, trading on a margin account, under a contract reading in part as follows: "Reports of the execution of orders and statements of my accounts shall be conclusive if not objected to in writing, the former within two days, and the latter within ten days, after forwarding by you to me by mail or otherwise." All the transactions were under and pursuant to the quoted provisions of the contract. The following material facts were found by the arbitrators. Under the terms of the arbitration agreement the arbitrators were to render a decision in accordance with California law, the question whether the law had been correctly applied being subject to review by the court. The motion was denied the order was treated by the parties as an affirmance of the award, and plaintiffs have appealed. Plaintiffs moved the court to amend the award by increasing it to $13,355, based upon the higher valuation. Arbitrators duly appointed to decide this and other questions used the former figure in computing plaintiffs' damages and awarded them $575. ![]() ![]() The crucial question upon this appeal is the following: Was the measure of damages for conversion of corporate stock, which was available for purchase upon stock exchanges, to be computed at $35.125 per share, its value at the date of conversion, or at $96.875, its value eight months later. ![]() Stephens, Jones, La Fever & Smith, Eugene W. PAINE, WEBBER, JACKSON & CURTIS, Defendant and Respondent. WONG et al., Plaintiffs and Appellants, v. ![]()
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