Herbert Tepper v. Frank H. Chichester, Trustee in Bankruptcy of the Estate of Bennett-Manning Co., Bankrupt

Appeal from an order of the District Court denying appellant’s petition to reclaim thirty shares of the capital stock of Ford Motor Company. The right of reclamation is claimed under § 60, sub. e, of the Bankruptcy Act ( 11 U.S.C.A. § 96 , sub. e) and under common law. The order adopted the findings of fact and conclusions of the referee.

From the findings of the referee, we gather these facts. Bennett-Manning Co., the bankrupt, was a licensed stockbroker. On and prior to October 23, 1958, 1 appellant was the owner and in possession of thirty shares of the capital stock of Ford Motor Company and on and prior to such date requested the bankrupt to sell said stock on behalf of appellant. On October 24 the bankrupt, as a stockbroker, sold on behalf of appellant said shares of stock and on said date bankrupt executed and transmitted to appellant a written confirmation of sale of said stock for a total sales price of $1337.77. On October 28 the appellant delivered to bankrupt, endorsed in blank, his stock certificate representing the said thirty shares of stock, said delivery being made after receipt of the written confirmation of sale above mentioned.

The bankruptcy proceedings were…

(dissenting).

My inability to concur in the opinion .■stems from my disagreement with the •opinion’s basic holding to the effect that the rights of the appellant are not to be judged by reference to California law •but that in some manner, not spelled out in the opinion, the federal bankruptcy act makes the California law inapplicable.

Thus the opinion states “If bankruptcy ihad not intervened, the appellant might have been entitled to reclaim his prop-erty.” (Here citing California decisions.) Then it proceeds to state that the provisions of the Bankruptcy Act '“are superior to all state laws upon the subject and suspend those laws insofar as they are in conflict with the Act.” In my view such a statement is completely inapplicable here where the crucial language of § 60, sub. e, is as follows: ■“ ‘Cash customers’ shall mean customers entitled to immediate possession of such •securities without the payment of any sum to the stockbroker.” It is my view that in determining whether a customer is or is not “entitled to immediate possession” we must be guided by state law.

The applicable language just quoted and that in subdivision (2) of subsection e, which refers to cash…

285 F.2d 309 Herbert TEPPER, Appellant, v. Frank H. CHICHESTER, Trustee in Bankruptcy of the Estate of Bennett-Manning Co., Bankrupt, Appellee. No. 16572. United States Court of Appeals Ninth Circuit. Dec. 6, 1960, Rehearing Denied Feb. 1, 1961. 1 Nathan Goller, Los Angeles, Cal., for appellant. 2 Gendel & Raskoff, Arnold M. Quittner, Los Angeles, Cal., for appellee. 3 Before CHAMBERS and POPE, Circuit Judges, and KILKENNY, District judge. 4 KILKENNY, District Judge. 5 Appeal from an order of the District Court denying appellant's petition to reclaim thirty shares of the capital stock of Ford Motor Company. The right of reclamation is claimed under 60, sub. e, of the Bankruptcy Act (11 U.S.C.A. 96, sub. e) and under common law. The order adopted the findings of fact and conclusions of the referee. 6 From the findings of the referee, we gather these facts. Bennett-Manning Co., the bankrupt, was a licesed stockbroker. On and prior to October 23, 1958, 1 appellant was the owner and in possession of thirty shares of the capital stock of Ford Motor Company and on and prior to such date requested the bankrupt to sell said stock on behalf of appellant. On October 24 the bankrupt, as…