Crittenden v. Widrevitz

• Decision Date: 14 April 1921
• Docket Number: 82.
• Parties: CRITTENDEN v. WIDREVITZ.
• Court: U.S. Court of Appeals — Second Circuit

272 F. 871

CRITTENDEN v. WIDREVITZ.

No. 82.

United States Court of Appeals, Second Circuit.

April 14, 1921

A Gordon Murray, of New York City, for plaintiff in error.

Tobias A. Keppler, of New York City (Joseph L. Hochman, of New York City, of counsel), for defendant in error.

Before WARD, HOUGH, and MANTON, Circuit Judges.

MANTON Circuit Judge.

For convenience we shall refer to the parties as plaintiff and defendant.

The plaintiff owned 25 $1,000, 4 per cent. Alleghany county bonds. On the night of February 26, 1919, his office in Pittsburgh was burglarized, and these bonds were stolen. In October, 1919, 12 of the bonds were found by the district attorney of New York county to be in the possession of Dora Widrevitz. The bonds came into her possession under the following circumstances:

One day while her husband, now deceased, was at the Chatham & Phoenix National Bank, at the Bowery and Grand street, New York City he met one Joseph Sugarman, who was also a depositor in the bank, and who was known to him. This acquaintance was of long standing. In a conversation which ensued, Sugarman asked Widrevitz to loan him $10,000, with these bonds as collateral, and this, for the account of his brother, S. C Sugarman. The defendant's intestate asked the bank's representative as to the value of the bonds. Upon his recommendation, he promised to make inquiry at a brokerage firm, and stated he would advise Sugarman later if he would make the loan. He later, after having consulted a brokerage firm, agreed to loan $10,000, taking the bonds as collateral security. A check for $10,000 to the order of S. C. Sugarman was drawn and cashed at the same bank, and a four-months note was given, which was renewed when it became due. After notice, and subsequently, on December 22, 1919, the bonds were sold by an auctioneer, pursuant to the terms of the collateral note. Upon the trial, defendant's counsel stated as follows, in answer to an inquiry:

'Mr. Murray: I have no evidence to show that Widrevitz knew of these notices prior to his advance of the $10,000; but the whole theory of the case is that there were facts that would have been known, provided he had made the proper inquiry.

'The Court: In my opinion, he does not have to make inquiry, and I therefore sustain the objection to the deposition.

'Mr. Murray: Exception.

'The Court: I do not think the facts justify any imputation in this case. * * * ' There is no evidence showing direct notice to the defendant's intestate of the theft of these bonds. Again, the following colloquy took place between court and counsel:

'The Court: I do not believe I see it that way. No matter where the burden is, it seems to me the actual facts show that there was no notice, actual or imputed, to Mr. Widrevitz, when he bought these bonds.

'Mr. Murray: There is no actual notice.'

Thereupon, on motion of defendant's counsel, the court directed a verdict in favor of the defendant.

We think the evidence presented by the plaintiff did not raise a question of fact which entitled the plaintiff to have this claim submitted to the jury. There is proof in the record that the note received from Sugarman, with the bonds pledged as collateral security, was obtained for value, without actual notice of the theft of the bonds. Nor was there evidence of bad faith on the part of the defendant's intestate. It is sought, by inference, to infer that, because the bank refused Sugarman the loan, the defendant's intestate should not have made it, and that the circumstances of meeting at the bank, and Sugarman stating to defendant's intestate that he could not obtain a loan at the bank on the bonds in question, was sufficient to put the defendant's intestate upon notice. The explanation therefor, as given, which may have been satisfactory to the defendant's intestate, was that of the bank's officer, who said that Sugarman's credit at the bank was bad; that his checks often overdrew the amounts on deposit to his account, and for this reason business with Sugarman was undesirable.

The bonds in question were negotiable paper. White v. Vt. &amp Mass. R.R. Co., 65 U.S. (24 How.) 575, 16 L.Ed. 221. Proofs, and not merely suspicious facts, are required in order to impeach the title of the holder of negotiable paper acquired for value and before maturity. Goodman v. Simonds, 20 How. 343, 15 L.Ed. 934. One who...