Thomas v. Taggart
209 U.S. 385 (1908)

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U.S. Supreme Court

Thomas v. Taggart, 209 U.S. 385 (1908)

Thomas v. Taggart

No. 17

Argued January 17, 20, 1908

Decided April 6, 1908

209 U.S. 385

Syllabus

Richardson v. Shaw, ante, p. 209 U. S. 365, followed to the effect that a a general rule the broker is the pledgee and the customer the owner and pledgor of stock carried on margin.

Where there is a repugnancy between the printed and written provision of a contract, the writing is presumed to express the specific intention of the parties, and will prevail. In this case, the written portion on the receipt given for stock, deposited with the broker as collateral on account, was held as specially applicable thereto, and that the broker's right to rehypothecate stocks under the printed portion of the contract was confined to the stocks purchased and carried on margin.

If title to property is good as against the bankrupt or his creditors at the time the trustee's title accrues, title does not pass, and the owner of the property is entitled to have it restored to him, or, if it has been sold, the proceeds thereof.

Shares of stock held by a broker as collateral for the account of a customer, upon which the latter is not indebted to the broker, are the property of

Page 209 U. S. 386

the customer, and, as the trustee has no better right thereto than the bankrupt, the customer is entitled to their possession, and this right is not affected by the fact that the broker had hypothecated the shares. In such case, the customer is entitled to the shares, or their proceeds, when returned to the trustee if the loan has been paid by proceeds of other securities pledged therefor.

Proof of claim of a customer against a broker, including value of securities deposited as collateral, does not amount to a waiver of his right to recover possession of the specific stocks, if found, where his claim specifically states that he does not waive such right of possession.

149 F. 176 affirmed.

The facts are stated in the opinion.

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