Court Opinion

ID: 9636349
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:24:55.64974+00
Date Added: 2024-06-11T18:09:44.483529
License: Public Domain

MORRIS, District Judge
(dissenting). I am unable to concur in the opinion of the majority. The petitioners pledged their shares of stoek with their broker, the bankrupt, on margin accounts. It is conceded that under an established custom of dealing a broker has the right, in the absence of special contract^ to repledge sueh securities for his own debt. It is found as a fact that the petitioners knew the bankrupt was repledging their stock and made no objection thereto. Both as a conclusion of fact and a conclusion of law the stocks were rightfully repledged by the bankrupt. They were repledged with securities of other individuals that have been sold by the pledgee. The petitioners were cosureties with all others whose stocks were repledged for the same debt. This certainly must be true down to the date of the liquidation of the bankrupt’s debt. It is not equitable to permit a bank to which securities are so repledged to select one person’s stoek for sale and return another’s intact. By so doing financial ruin might result to one person, to the enrichment of another more favored client of the pledgee. I agree with the' majority opinion that the case must be determined by the rule prevailing in Massachusetts, but I am not convinced from an examination of the only two cases in point that any sueh inequitable rule is firmly established in the jurisprudence of the commonwealth.
Compare Furber v. Dane, 203 Mass. 108, 89 N. E. 227, with the later case of Sutcliffe v. Cawley, 240 Mass. 231, 132 N. E. 406.
The trustee in bankruptcy has no interest in securities or cash so returned. All persons whose securities have been repledged for the same debt should be cited in, and a bill of interpleader filed by the trustee, that there may be contribution among those entitled.