Crawford v. Dollar Savings Fund & Trust Co.

Citations

• 236 Pa. 206
• 84 A. 694
• 1912 Pa. LEXIS 735

Syllabus

<p>Principal and agent — Stock brokers — Be-hypothecation of securities of customer — Stock — Certificate of stock — Blank assignment.</p> <p>1. Where a stock broker calls upon a customer for additional margin, and the latter instead of putting up the cash, gives to the broker certificates of stock, and instead of signing the blank power printed on the back of the certificates, executes and delivers with the certificates in accordance with the custom of brokers, blank powers on other pieces of paper, and the broker pledges the certificates to a bank, the bank is under no duty to make inquiry as to the authority of the .broker to pledge the securities, because the assignment printed on the back of the certificate had not been signed by the owner.</p> <p>2. In such a case the bank may hold the certificates as an innocent purchaser for value as against the customer of the broker, although at the time they were pledged they were received as additional collateral for a pre-existing indebtedness of the broker, if it appears that thereafter the bank relying upon the security of the stock thus pledged, surrenders other valuable securities to the broker without receiving anything in lieu of them,</p>