National Safe Deposit, Sav. & Trust Co. of DC v. Hibbs

Citations

• 229 U.S. 391
• 33 S. Ct. 818
• 57 L. Ed. 1241
• 1913 U.S. LEXIS 2454

Syllabus

<p>A bank’s trusted agent, in gross breach of his duty, took certain stock certificates belonging to the bank, endorsed and authenticated with evidence of title, to a broker who, in ordinary course of business and in good faith, sold them to third parties for full value and paid over the proceeds to such agent. Held, in a suit by the bank against the broker that:</p> <p>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.</p> <p>Stock certificates are a peculiar kind of property; although, strictly speaking, not negotiable paper, they are frequently the basis of commercial transaction and bought and sold in open market as negotiable securities are. Bank v. Lanier, 11 Wall. 369.</p> <p>'The fact that principles affecting the matters involved are well known'-tó'business men and are constantly acted upon by them should be given due weight in determining the rights of parties in a transaction relating to the sale of stock certificates. Russell v. Am. Bell Telephone Co., 180 Massachusetts, 467, approved.</p> <p>Under the principles of equitable estoppel, the bank is estopped to make any claim against the broker.</p>