PURCHASE AND SALE. 449 any terms he may wish to make part of his engagement. Thus, it is usual for the stockbroker, unless he has entire confidence in the customer's responsibility, to ask the customer to deposit with him the securities the customer wants to sell or the money he wants to invest.^ The legal effect of " taking" an order ^ is to constitute the stock- broker the customer's agent, and to vest in him an authority to contract on behalf of the customer to buy or to sell securities in the way and on the terms stated in the order and also an authority to perform in the regular way the contract or contracts if made. As soon as the stockbroker becomes the customer's agent, the law imposes the duty ^ upon him of acting in good faith * and with due care^ in relation to his principal, the customer. In addition to merely consejiting to an order, the stockbroker may expressly promise in consideration of the customer's giving him the order to act as the customer's agent^ It is not usual to find such a promise expressed in words, but it is usual for courts of law to imply it in all cases where an order is " taken." It can, 1 If the order is not carried out, the stockbroker must of course at once return to the customer the securities or money deposited with him. 2 Taking an order has no effect on the implied offers contained in the order ; as already stated, they remain mere offers until the stockbroker has actually contracted to buy or to sell the securities. " Harris v. Tumbridge, 83 N. Y. 92; Mechem on Agency, §§ 951-954, 454-472. This duty depends on the stockbroker's status as agent, and the remedy for any breach lies in tort.
- This duty is very stringently enforced. In doing so judges incline to lay down
general rules of conduct rather than to decide each case on its merits. Thus the rule is established and enforced without exception that a stockbroker cannot sell to or buy from himself; Porter v. Wormser, 94 N. Y. 431 ; Levy 7/. Loeb, 89 N. Y. 3S6 ; s. C. 85 N. Y. 365; 47 N. Y. Super. Ct. 61 ; Taussig v. Hart, 58 N. Y. 425; Day v. Holmes, 103 Mass. 306 ; — his clerk ; Gardner v. Ogden, 22 N. Y. 327 ; — a firm or corporation of which he is a member ; Francis v. Kerker, 85 111. 190; Solomons v. Pender, 3 H. & C. 639 ; — and this without proof of fraud ; Porter v. Wormser, 94 N. Y. 431 ; Gardner v. Ogden, 22 N. Y. 327 ; — and even in case where the price obtained or given by the cus- tomer is as good or better than would otherwise have been obtained or paid; Taussig V. Hart, 58 N. Y. 425; Gardner v. Ogden, 22 N. Y. 327; Connor v. Black, 24 S. W. (Mo.) Rep. 184. There is no custom among stockbrokers of violating this rule of law ; cf. Robinson v. Mollett, L. R. 7 H. L. A pp. Cases, 802. On this whole note, see Dos Passos, 123, 124, 213-226, 280-286; Mechem on Agency, § 936, and cases cited. ^ The degree of care which a stockbroker must show is to be measured by the stand- ard of care which a faithful and intelligent stockbroker would show. It is not to be measured by the degree of care which is customary, or which stockbrokers usually give, unless such degree of care is what an intelligent and faithful stockbroker would show. Cf. William v. Hays, 143 N. Y., 442, on pp. 453, 454; Dos Passos 123-136. I* This makes an ordinary unilateral contract of agency.
