Sidney Schuyler v. Charles Littlefield

• Decision Date: 23 March 1914
• Docket Number: No. 213,213
• Citation: 34 S.Ct. 466,232 U.S. 707,58 L.Ed. 806
• Parties: SIDNEY S. SCHUYLER, John R. Chadwick, and Charles L. Burnham, Co-Partners, Trading under the Firm Name and Style of Schuyler, Chadwick, & Burnham, Appts., v. CHARLES E. LITTLEFIELD, as Trustee in Bankruptcy of A. O. Brown & Company
• Court: U.S. Supreme Court

232 U.S. 707

34 S.Ct. 466

58 L.Ed. 806

SIDNEY S. SCHUYLER, John R. Chadwick, and Charles L. Burnham, Co-Partners, Trading under the Firm Name and Style of Schuyler, Chadwick, & Burnham, Appts.,

v CHARLES E. LITTLEFIELD, as Trustee in Bankruptcy of A. O. Brown & Company.

No. 213.

Argued January 29, 1914.

Decided March 23, 1914.

Messrs. W. Benton Crisp and Theodore M. Crisp for appellants.

[Argument of Counsel from page 708 intentionally omitted] Messrs. Edwin D. Hays, Daniel P. Hays, and Ralph Wolf for appellee.

[Argument of Counsel from page 709 intentionally omitted] Mr. Justice Lamar delivered the opinion of the court:

This record presents for determination another of the many questions arising out of the tangled and complicated affairs of Brown & Company, stockbrokers of New York city, who made an assignment on August 25th, 1908, and who were subsequently adjudged bankrupts. The proceeding is by Schuyler, Chadwick, & Burnham, to recover trust funds which they claim to have traced into the possession of Brown & Company's trustee in bankruptcy. The case involves an application of the rule that where one has deposited trust funds in his individual bank account, and the mingled fund is at any time wholly depleted, the trust fund is thereby dissipated, and cannot be treated as reappearing in sums subsequently deposited to the credit of the same account. Knatchbull v. Hallett, L. R. 13 Ch. Div. 696, 49 L. J. Ch. N. S. 415, 42 L. T. N. S. 421, 28 Week. Rep. 732; Peters v. Bain, 133 U. S. 671 (1), 693, 33 L. ed. 696, 704, 10 Sup. Ct. Rep. 354; Crawford County v. Strawn, 15 L.R.A.(N.S.) 1100, 84 C. C. A. 553, 157 Fed. 49, 54.

There is no controversy about the law, but a complete disagreement about matters of fact where it is necessary to decide with certainty, on the one hand, the exact time and order in which a series of checks were deposited; and, on the other, to determine, with equal certainty, the exact order in which a series of checks drawn on that account were paid and what use was made of the money so drawn. As the bankruptcy occurred on August 25, 1908, and as the testimony was taken several months later, it is not surprising that the witnesses were not able to establish definitely the order in which these transactions took place, nor that the referee, district judge, and court of appeals each differed from the other as to what had been proved. The referee found that Schuyler, Chadwick, & Burnham had traced their funds into the hands of the trustee, and were therefore entitled to recover. The district judge agreed with the referee in this conclusion, but disagreed with him as to some of the findings of fact on which that conclusion was based. The circuit court of appeals disagreed with both, and held that the trust fund had not been traced into the hands of the trustee, and thereupon dismissed the complaint. The appeal from that degree involves a consideration of the facts, which may be thus briefly stated:

Brown & Company were brokers in New York city, and on August 24th, 1908, by false representations of solvency obtained from Schuyler, Chadwick, & Burnham, 300 shares of Interborough stock (worth $32 per share), agreeing at once to send in payment a check for $9,600, capable of certification. This was not done, and in spite of repeated demands the check was not delivered until after banking hours on August 24th, and too late to have it certified that day. In the meantime Brown & Company sold to Miller the

                      300 shares Interborough, for...... $ 9,600
                 
                     1000 shares Northern Pacific....... 143,000
                 
                     1000 shares Great Northern......... 137,000
                                                        ---------
                       Total........................... $289,600
                 

Miller thereupon gave Brown & Company a check for $266,600, which was deposited in the Hanover National Bank on August 24. Miller retained the balance of $23,000 on some claim which was not admitted by Brown & Company. They later that day obtained from Miller a check for $23,000, which was deposited in the...