Wright

Lauzier-Wolcott & Co., copartners, were stockbrokers with principal offices at Butte, Mont. Not being members of the New York Stock Exchange, they transacted most of their business through A. A. Houseman & Co., a member of the Exchange. As found by the referee, they operated in a manner very similar to that explained at length in the opinion of the court in the case of Skiff v. Stoddard, 63 Conn. 216 , 26 A. 874 , 28 A. 104 , 21 L. R. A. 102. On June 4, 1925, they posted a notice on their door that they were unable to meet their obligations, and thereafter they did not , again open for business. Seven days later, both as a firm and as individuals, they wore adjudged involuntary bankrupts. The matter was referred, and in due time Herman Blank was elected and qualified as trustee.

. The appellant, W. I. Wright, was one of their numerous customers, and, being what is known as a margin trader, he kept on deposit with them, as is the custom, securities to protect them against loss. These securities, together with those of their other customers, they in turn hypothecated with Houseman & Co. as collateral for their obligations to that concern. At the close of business on June 3, 1925,…