James Gorman v. Charles Littlefield
| Decision Date | 26 May 1913 |
| Docket Number | No. 243,243 |
| Parties | JAMES E. GORMAN, Appt., v. CHARLES E. LITTLEFIELD, Trustee in Bankruptcy of Albert O. Brown et al., Coparteners, Trading under the Name of A. O. Brown & Company |
| Court | U.S. Supreme Court |
Messrs. James L. Coleman and Robert Dunlap for appellant.
Messrs. Daniel P. Hays and Ralph Wolf for appellee.
[Argument of Counsel from page 20 intentionally omitted] Mr. Justice Day delivered the opinion of the court:
This case presents a controversy over 250 shares of Green Cananea Copper Company stock, which came into the possession of the trustee in bankruptcy of Albert O. Brown and others, copartners, trading under the name of A. O. Brown & Company. Appellant, James E. Gorman, claimed to be the owner of the shares of stock, and instituted proceedings in the district court to recover them. The matter was referred to a special master, who found the facts and recommended the transfer of the stock to the claimant. The district court, upon hearing, ruled otherwise, and, upon appeal to the circuit court of appeals, the ruling of the district court was sustained.
The claimant for a year or more before the failure of A. O. Brown & Company was a customer dealing with one of the Chicago offices of that firm, buying stocks on margin and also paying for them in full. On or about April 14 1908, Gorman directed the Chicago office to buy 250 shares of Green Cananea Copper stock for him. The stock was brought on the understanding that it was to be paid for in full, and at the time that the order was executed the claimant had an ample credit balance with the firm, applicable on its books to the payment in full of the shares purchased. The certificates of stock were left by the claimant in the possession of the broker, subject to the claimant's future order. The books of the bankrupt firm show that on April 14, 1908, they bought for the account of Gorman, 100 shares of Green Cananea Copper stock, and received certificate A-335. This certificate was delivered to J. T. ________ on May 6, 1908, on account of a sale from H. Wright & Company, of Cleveland, Ohio. On April 14, 1908, the bankrupt firm bought for the claimant 50 shares of Green Cananea Copper stock, and received certificate Y-11083. This certificate was, on May 14, 1908, delivered to DeCoppet & Doremus, on account of balance of trade on that date. On April 14, 1908, the bankrupt firm bought for the claimant 50 shares of the same stock, and received certificate B-6589. This certificate was delivered to DeCoppet & Doremus on April 16, 1908, on account of the sale of L. E. Gorton, of Detroit, Michigan. On April 14, 1908, the bankrupt firm bought for the claimant 50 shares of the same stock, and received certificate B-6537. This certificate was delivered to Carpenter & Baggott on May 14, 1908, on account of a sale to Parson, Snyder, & Company, of Cleveland, Ohio. The receiver in bankruptcy, now the trustee, came into the possession of, and still has in his possession, certificates indorsed in blank for an aggregate of 350 shares of Green Cananea Copper stock. As to this stock no claim has been filed with the receiver or trustee, although the master says the time for filing claims has expired. The certificates of stock in question, with those purchased for other clients, which were paid for in full or were purchased on margin, were placed without discrimination in the same tin box. It was customary to take certificates to make delivery from that box, indiscriminately, unless the certificate had been transferred to the name of the customer. At no time before the failure did the claimant receive his shares of the Green Cananea Copper stock, nor did he order its sale.
Upon these facts the question is, Are these shares of stock p part of the general estate for the benefit of creditors, or should they be turned over to the claimants?
In Richardson v. Shaw, 209 U. S. 365, 52 L. ed. 835, 28 Sup. Ct. Rep. 512, 14 Ann. Cas. 981, the nature of this property was the subject of discussion and decision in this court. In that case a broker, who had been adjudicated a bankrupt, shortly...
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...Hollins, 241 U.S. 523, 36 S. Ct. 615, 60 L.Ed. 1143; Browne v. Thorn, 260 U.S. 137, 43 S. Ct. 36, 67 L.Ed. 171; Gorman v. Littlefield, 229 U.S. 19, 33 S. Ct. 690, 57 L.Ed. 1047. But is is argued that when the identical certificates turned over to the broker were repledged and the right obta......