Page:United States Reports, Volume 209.djvu/403

 RICHARDSON . SHAW. 09 U. . Opon of t Court. money embraced in the speculation, if he acts honestly, faith- fully and prudently, the entire risk is upon the client .... To introduce a different rule would 6ive opportunities for sharp practices and frauds, which the law should not invite." The rule thus established by the courts of the State where such transactions are the most numerous, and which has lon been adopted and generally followed as a settled rule of law, should not be lightly disturbed, and an examination of the cases and the principles upon which they rest lead us to the conclusion that in no just sense can the broker be held to be the owner of the shares of stock which he purchases and carries for his customer. While we recognize that the courts of Massa- chnsetts have rsahed a different conclusion and hold that the broker is the owner, carrying the shares upon a conditional contract of sale, and, while entertaining the 8Teatest respect for the Supreme Judicial' Court of that State, we cannot ac- cept its conclusion as to the relation of broker and customer under the circumstances developed in this case. We say this, recosnizing the difficulties wMch can be pointed out in the application of either rule. At the inception of the contract it is the customer who wishes to purchase stocks and he procures the broker to buy on his account. As was said by Mr. Justice Bradley speaMng for the court in C,Ar v. John, 129 U.S. 193, 198, a broker is but an agent, and is bound to follow the directions of his Prinelp,l or give notice that he declines the agency. The dividends on the securities belong to the customer. The customer pays interest upon the purchase price and is credited with interest upon the margins deposited. He has the right at any time to withdraw his excess over ten per cent deposited as margin with the broker. Upon settlement of the account he receives the securities. In this case the broker assumed to pledge the stocks not because he was the owner thereof, but because by the terms of the contract printed upon every statement of account hc obtained the right from the cus- tomer to pledge the securities upon general loans, and in like

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