did not reach so far, and that the third party had acted upon a mistaken conclusion. He is estopped to take refuge in such a defense. If a loss is to be borne, the author of the error must bear it. If business has been transacted in certain cases it is implied that the like business may be transacted in others.' And, again, the Court says:
'Under such circumstances the presence or absence of authority in point of fact, is immaterial to the rights of third persons whose interests are involved. The seeming and reality are followed by the same consequences. In either case the legal result is the same.'
In this case, by leasing a safe deposit box jointly with the son, by permitting her securities to be kept in this safe deposit box, and by opening an account with the defendants as well as a joint checking account with the son in the Union Trust Company, the plaintiff, unwittingly perhaps, conferred upon the son apparent or ostensible authority to handle the securities for her. The fact that some of the endorsements on the certificates were clever forgeries does not change the situation.
A case that is practically on all fours, both as to the facts and the law, is the decision of the Supreme Court in National Safe Deposit, Savings & Trust Co. v. Hibbs, 229 U.S. 391, 33 S. Ct. 818, 57 L. Ed. 2141. This case arose in the District of Columbia courts. The facts were very similar to those involved in the case at bar. The plaintiff bank had made a loan to a customer, who deposited with the bank certain stock certificates as collateral security. An employee of the bank, who had been a trusted subordinate for many years, took the certificates out of the bank's vault and delivered them to the defendant stockbrokers, with instructions to sell them. These certificates were sold and the dishonest employee of the bank received a check for the proceeds, which he subsequently cashed. Suit was brought by the bank against the broker for the value of the stolen stock certificates. The Court held that the bank was not entitled to recover, and its decision was affirmed by the Court of Appeals of the District of Columbia and then by the Supreme Court of the United States. In the course of its opinion, the Supreme Court stated (229 U.S. at page 393, 33 S. Ct. at page 819):
'By the custom of banks, brokers and others dealing in stock, which custom was known to the bank, the possession of stock certificates assigned in blank and attested, as were the certificates here in controversy, has been recognized, in the absence of knowledge or cause of suspicion to the contrary, as evidence of ownership or of authority to sell, pledge or otherwise deal with such certificates as the owner might do.'
And, again, the Court stated:
'In this case conflicting legal principles are invoked and relied upon. For the defendant in error the familiar principle 'that where one of two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss, must sustain it' is advanced. The plaintiff in error invokes the principle that where the owner of property, such as stock certificates, has lost it by the criminal or fraudulent act of another, the owner not voluntarily or negligently conferring upon such another the indicia of ownership or apparent title, cannot be deprived of his property by the attempted transfer of title to a third person for value, no matter how innocent the purchaser may be of knowledge of the crime or fraud by which the property was acquired.'
And then the Court goes on to make the following significant observation:
'Stock certificates are a peculiar kind of property. Although not negotiable paper, strictly speaking, they are the basis of commercial transactions large and small, and are frequently sold in open market as negotiable securities are.'
Finally, the Court says:
'Here one of two innocent persons must suffer and the question at last is, Where shall the loss fall? It is undeniable that the broker obtained the stock certificates, containing all the indicia of ownership and possible of ready transfer, from one who had possession with the bank's consent, and who brought the certificates to him, apparently clothed with the full ownership thereof by all the tests usually applied by business men to gain knowledge upon the subject before making a purchase of such property. On the other hand, the bank, for the legitimate purpose, with confidence in one of its own employees, entrusted the certificates to him, with every evidence of title and transferability upon them. The bank's trusted agent, in gross breach of his duty, whether with technical criminality or not is unimportant, took such certificates, thus authenticated with evidence of title, to one who in the ordinary course of business, sold them to parties who paid full value for them. In such case we think the principles which underlie equitable estoppel place the loss upon him whose misplaced confidence has made the wrong possible.'
An expert witness testified in this case that, where a customer brings a stock certificate to a bank or a banking house for sale and that certificate purports to have been endorsed by another customer, the custom in the banking community is to accept such certificate for sale at the direction of the customer bringing it to the bank.
On the undisputed facts it is clear, beyond peradventure of a doubt, that the defendants violated no legal or moral duty and are not under any legal or moral obligation to reimburse the plaintiff for her unfortunate loss, a loss which she suffered through the perfidy of her son and grandson.
In the light of these considerations, the Court will direct a verdict in favor of the defendants.
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