In re Ennis

• Decision Date: 10 April 1911
• Docket Number: 187.
• Parties: In re ENNIS et al.
• Court: U.S. Court of Appeals — Second Circuit

187 F. 726

In re ENNIS et al.

No. 187.

United States Court of Appeals, Second Circuit.

April 10, 1911

This proceeding is similar in its origin and form to that in Matter of Ennis, Bamford, Petitioner, 187 F. 720 decided this day, and the statement of facts in that case will show the nature of the claims against the fund in controversy and the classification made by the special master in disposing of them. The appellant, Braun, deposited certain securities, consisting of 10 shares of Paterson Savings Institution, 20 shares of First National Bank of Paterson and 102 shares of Safety Car Heating stock, to be used together with certain collateral notes, as margin for his speculative account. These 'deposit' stocks were included in the pledge to the Mechanics' Bank described in the Bamford Case. After the failure the Mechanics' Bank sold the Safety Car Heating shares and realized $12,633.21 therefor. The Paterson Savings Institution and First National Bank shares were not sold by the bank, but were turned over to the receiver, and are now in possession of the trustee.

The speculative account of the appellant, as 'restated' by the special master, showed an indebtedness or deficiency to be charged against said 'deposit' stocks of $3,764.93. The special master found 'that, on payment or offset of this indebtedness, claimant was entitled to a lien on the surplus' for the proceeds of the Safety Car stock and to recover the certificates for the Paterson Savings Institution and First National Bank shares and the notes 'subject, however, to his paying his proportion of the general loss and the expenses of the reference. ' This ruling, in effect, placed the claimant in class B, but with an additional burden. The report of the special master was confirmed by the District Court.

The appellant takes this appeal and brings this petition for revision because he was placed in class B, because the People's Bank of Passaic was placed in class A, and also because he was found to be indebted to the bankrupt estate and such indebtedness was charged against his stocks deposited as collateral. Other material facts are stated in the opinion.

D. W. Noel (Abraham Benedict, of counsel), for appellant.

Hays, Herschfield & Wolf (E. D. Hayes, of counsel), for respondent.

Lawrence & Lawrence (P. Lawrence, of counsel), for People's Bank.

Before LACOMBE, WARD, and NOYES, Circuit Judges.

NOYES Circuit Judge (after stating the facts as above).

The equities of this appellant are inferior to those of the appellant in the Bamford Case. The account as 'restated' by the special master-- whether rightfully or wrongfully-- shows an indebtedness to the bankrupt estate instead of a balance to the credit of the appellant. Moreover, as in the Bamford Case, the proof is insufficient to establish the...