Heaphy v. Kerr

Headnote

Conversion — stockbrokers — bankruptcy — wrongful repledge of securities deposited by customer with stockbroker — when such repledge constitutes a willful and malicious injury to property which survives discharge in bankruptcy.

Heaphy v. Kerr, 190 App. Div. 810 , affirmed.

Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered February 6, 1920, reversing a judgment in favor of defendants entered upon a verdict and granting a new trial. Plaintiff deposited with defendants (stockbrokers) certain shares of stock as security for a margin account. Defendants repledged all of the stock for an amount largely in excess of plaintiff’s indebtedness, the stock was sold by the pledgees and defendants went into bankruptcy. Plaintiff contended and the Appellate Division held that the conversion of the stock by the unauthorized repledge was a willful and malicious injury to property which survived the discharge in bankruptcy.