Trahan v. First National Bank Of Ruston

690 F.2d 466 (5th Cir. 1982)

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Nature of the Case

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Facts

In 1973, Trahan (P) pledged 70,000 shares of TIPCO stock to Bank (D) to secure two personal loans. In 1977, P repaid the loans and demanded the return of the stock. D refused contending that the stock had been pledged to secure loans made to Resource Exploration, Inc. which D considered to be one and the same as P. The latter obligation was evidenced by an uninitiated interlineation on the pledge agreement. When the corporation defaulted on its loan, D sold 15,000 shares of the stock. P sued under diversity. The trial judge found that the stock had not been pledged as security for the corporation’s loans and had been wrongfully converted by D. The judge ordered D to tender the equal number of shares of TIPCO to P. On March 13, 1978, the date of the conversion; the stock was worth $10 per share. On the date the judgment was entered, the stock was worth $29.50 per share. The highest value reached between the two dates was $64.25 per share. Both parties appealed.