Court Opinion

ID: 8779119
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:12:18.759413+00
Date Added: 2024-06-11T17:02:44.594645
License: Public Domain

NOYES, Circuit Judge
(after stating the facts as above). It is manifest at the outset that the appellant is unable to establish title to any specific certificates of stock or bonds which came into the hands of the trustee from the banks where they were hypothecated by the bankrupts, and his claim seems barred by the decision of this court in Re McIntyre, 181 Fed. 960, 962, 104 C. C. A. 424, 426, where it was said:
“We also concur in the conclusion of the District Judge that persons whose stock has been used by a bankrupt for his own purposes cannot establish title to specific certificates of stock, found after bankruptcy as collateral to souk- loan, unless they identify (hose certificates as representing the shares which the bankrupt look from' the claimant.”
Assuming, however, that the appellant, as he contends, is entitled to avail himself of the doctrine of following trust funds, the same result is reached. It is well settled, in the application of that doctrine, that some measure of identification is necessary. All that a claimant can follow into a bankrupt’s estate, and recover from its trustee, are funds which he is able to trace into the estate. As this court said in the very recent case of Matter of McIntyre, 185 Fed. 96, decided February 14, 1911:
“While the doctrine of following trust funds has been much extended in modern decisions, there has never been a departure in the federal courts from the principle that there must be some identification of the property sought to be charged with the trust funds.”
Now the most that can be said.in favor of the appellant in this case is that there are in the hands of the trustee more than enough of the kind of securities claimed by him to cover his demand, and that no other person claims them. But there is no proof that the appellant’s shares went into either the Mechanics’ Bank or the Reserve Bank, and, consequently, no proof that they constitute any part of the securities held by the trustee. Nor does the doctrine of commingling funds help the appellant. It does not appear that the bankrupts at all limes had *730on hand stocks equal to the number of the appellant’s shares. For all that appears in the record, the bankrupts .may have converted appellant’s shares long before the failure,- may have been without any of such kind of stock, and may have afterwards bought for their own account the shares which were pledged to the banks. The appellant has, undoubtedly, a valid demand against the bankrupt estate; but he fails to follow and identify either trust funds or particular certificates.
The order of the District Court is affirmed, with costs.