Court Opinion

ID: 8799827
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:26:55.34699+00
Date Added: 2024-06-11T17:03:50.419587
License: Public Domain

On Petition for Rehearing.
Robert Eorsyth Tittle and B.- W. B. Brown, both of New York City (Walter C. Noyes, of New York City, of counsel), for appellant.
William C. Cammann, of New York City (Henry W. Taft and George Coggill, both of New York City, of counsel), for appellee.
Before WARD and ROGERS, Circuit Judges, and MAYER, District Judge.
PER CURIAM.
[5] The petitioner relies upon the following sentence in our opinion as showing that Roe was a creditor of the bankrupts and as such received a preference:
“Therefore as between the defendant and the bankrupts all their loans from the banks may be treated as one indebtedness, as to which the defendant was their surety to the banks.”
This sentence would have better expressed our thought if it had concluded thus:
“ * * * As to which the defendant’s securities were their surety to the banks.”
There was no contract between Roe and the banks at all. They were entire strangers. He was not their surety, and they could not have collected anything from him, nor could he derive anything from them by way of subrogation. The banks as secured creditors could have proved under section 57e (Act July 1, 1898, c. 541, 30 Stat. 560 [Comp. St. 1913, § 9641]) the amount of their claims over the value pf the securities they held, whereas Roe could have proved the whole vahje of his securities, if not returned to him. Even if he had such a provable claim; he was not obliged to prove it, but could, as we have heretofore held, have reclaimed his securities specifically. As between the bankrupts and Roe his securities are to be regarded as their surety to the banks, in the sense that their securities should be exhausted in paying the banks before his are resorted to. If all of Roe’s securities had been in one loan, which was sufficiently secured by the bankrupt’s securities, there would have been no wrong done if the bankrupts had obtained them from the banks and handed them over to him.' Because there were no other securities pledged to the banks than those belonging to the bankrupts and-to Roe, we were able to treat the bankrupts’ whole indebtedness to the banks as single and to be wholly paid out of their' securities. Therefore there was no preference to Roe as a creditor when the securities were redistributed, so as to leave his in a situation to be last resorted to.
The petition for a rehearing is denied.