Denison v. Emery

Citations

• 153 F. 427
• 15 Ohio F. Dec. 517
• 1907 U.S. App. LEXIS 5101

Syllabus

<p>1. Insolvency — Stockbrokkes — Distribution oe Proceeds oe Pledged Stocks.</p> <p>Insolvents were engaged in business as stockbrokers, and were given an order by petitioner to purchase certain stocks. This order they executed through a correspondent firm, which purchased the stock, advanced the money to pay for the same, and charged the amount to the general account of the insolvents, holding the stock as security for such account according to the usual custom between brokers. On being presented with a bill by insolvents, petitioner paid the same, and the insolvents promised to have the shares transferred to his name and to deliver the same. They did not. do so, however, nor remit the price to their correspondent, which on their failure sold the stock with other stocks bought for bankrupts on margin for customers to cover a balance due from them on their account. The'proceeds of all of the stocks so sold exceeded the amount due, and the excess was paid over to the receiver in insolvency. Held, that petitioner’s stock, having been separate from any other and paid for, as between him and the insolvents, or any of their creditors except the pledgee, was his property, and that he was entitled to the entire proceeds; none of it having been needed to pay the indebtedness to the pledgee.</p> <p>[Rights and liabilities of pledgees of corporate stock, see note to Prater v. Old Nat. Bank of Providence, 42 O. O. A. 125.]</p> <p>2. Same.</p> <p>Petitioner directed the insolvents, who were stockbrokers, to sell certain stock for him, and to purchase certain other stock. They sold and delivered the stock through a correspondent firm in Chicago, which credited the proceeds to their account, and they gave petitioner a corresponding credit on their hooks. They also purchased the desired stock from another broker, but it had not been paid for nor delivered at the time of their failure, and the saie was canceled by the seller. At the time of the failure, and from the time of the sa