8 F.2d 111 (W.D.Pa. ), In re Douglas

Citation:8 F.2d 111
Party Name:In re DOUGLAS.
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 111

8 F.2d 111 (W.D.Pa. )

In re DOUGLAS.

United States District Court, W.D. Pennsylvania.

Weil, Christy & Weil, of Pittsburgh, Pa., for petitioner.

F. W. Miller, of Pittsburgh, Pa., for C. D. Halsey & Co.

C. L. Williams, of Steubenville, Ohio, ancillary receiver and trustee in bankruptcy.

SCHOONMAKER, District Judge.

One George W. Bower has presented in this case a petition setting forth that the bankrupt, a stockbroker at Steubenville, Ohio, purchased for Bower 100 shares of common stock of the Seaboard Air Line Railway Company. That stock was purchased by the bankrupt, and carried by the bankrupt on margin for the petitioner until on or about September 24, 1923, when the petitioner fully paid for said stock, and between that date and October 15, 1923, the petitioner repeatedly demanded delivery of said stock from the bankrupt; but the bankrupt failed, neglected, and refused to deliver the same, and the bankrupt, instead of delivering the same in accordance with the said demand, left the stock in his own marginal account with C. D. Halsey & Co., who sold the stock for the payment of Douglas' indebtedness to them. The petitioner further contends that the said C. D. Halsey & Co. have in their hands, after liquidating the obligations of the bankrupt, the sum of $236.04. The petitioner claims that this Seaboard Air Line stock belonged to him, and that this money should be paid to him as sale proceeds of stock.

The trouble is that Bower never came into possession of this stock. He made demand for it, and that demand was not complied with. He was in a situation to sue on his claim for failure to deliver the stock, and might have brought suit before the bankruptcy was filed. Under the circumstances, we conclude that the petitioner was but a creditor of the bankrupt estate, with a probable claim in bankruptcy, and was not entitled to the fund which he is claiming, and which is now in possession of C. D. Halsey & Co.

The petitioner relies on the case of Richardson v. Shaw, 209 U.S. 365, 2 S.Ct. 512, 52 L.Ed. 835, 14 Ann.Cas. 981, as establishing his legal right to the proceeds of the sale of the stock in question. However, the facts of this case differ from the facts at issue in the case of Richardson v. Shaw, where there was no demand for the return of the stocks which was refused by the broker. Therefore, in that case, the relation of debtor and creditor did not arise. In the instant case, however, there is a different...

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