17 A.2d 377 | Pa. | 1940
There is a singular dearth of authority in regard to the principal question involved in this case, which is whether a person who, as agent, assists another in the sale of stolen negotiable bonds, but turns over all the proceeds to his principal and acts throughout the transaction innocently and in good faith, is liable for conversion of the bonds in an action by the owner.
Defendant Bernard S. Goldberg, a member of the Philadelphia bar, became acquainted with one Max Gross, who visited Goldberg's law office and told him he was estranged from his wife, and that the latter was living in New York while he, Gross, had been living in Philadelphia for a year or more; he employed Goldberg to represent him in attempting to effect a reconciliation. He stated that, in order to effect a cash settlement with his wife, and to prevent her from attaching the proceeds of the sales, he desired to sell some bonds in Philadelphia. Goldberg had carried an account as attorney in defendant Land Title Bank Trust Company for about two years. It was the practice of *339 that Company, as of other banking institutions, to render gratuitously to customers the service of selling securities through brokerage firms, and the Company had once previously effected the sale of some stock for Goldberg acting on behalf of a client. Accordingly, Goldberg took Gross to the Company, introduced him, explained why he desired to sell some of his bonds, and, on that occasion, delivered one bond to the Company for sale. The Company forwarded it to brokers who sold it in the regular course of business and remitted the proceeds, which the Company in turn credited, without charge, to Goldberg's account as attorney. Goldberg thereupon drew his check to the order of Gross, who cashed the check and appropriated the proceeds. While Goldberg received a moderate retainer from Gross in connection with the correspondence which he carried on with the attorney of Gross's wife in New York, he made no charge for his services in relation to the sale of this bond or subsequent ones. During the course of the following two or three months Gross brought to Goldberg other bonds which were sold through the Trust Company in the same manner as the first one, these transactions aggregating some $14,000 in amount; none of them is here in question. Finally came the sales which are involved in the present litigation, consisting of five bonds of New York, Chicago St. Louis R. R. Co., one of New York Central R. R. Co., and two of the City of Rome, all payable to bearer and negotiable. It came to light that these bonds had been the property of plaintiff, First National Bank of Blairstown, and were stolen from it by armed robbers some five months before. Gross disappeared and his present whereabouts are unknown. The Bank brought suit against Goldberg and the Trust Company to recover the value of these eight bonds which it claimed had been converted by defendants. The jury rendered a verdict for plaintiff, but the court entered judgments for defendants n o. v., from which plaintiff now appeals. *340
It was incumbent upon plaintiff to prove only its ownership and loss of the bonds, and the burden would then have shifted to defendants to show that they came into possession of the securities under such circumstances as to relieve them from liability for a conversion. Plaintiff, however, itself presented all the facts through cross-examination of Goldberg, and is bound by his testimony, there being no contradiction of it: Krell v. Jacobson,
This brings us to the fundamental question whether defendants should be held responsible for assisting in the sale of the bonds although they acted in the belief that the person who had authorized them to consummate the sales was the legitimate owner of the securities. Of course, the general rule is, as formulated in Restatement, Agency, section 349, that "An agent who does acts which would otherwise constitute conversion of a chattel is not relieved from liability by the fact that he acts on account of his principal and reasonably, although mistakenly, believes that the principal is entitled to possession of the chattels." Ordinarily, it is no defense to an action of trover that the defendant acted on behalf of another, because, if the principal is a wrongdoer, the agent is a wrongdoer also. But a distinction has been made in the few cases which have arisen where the chattels consisted of negotiable securities. Thus, in Spooner v. Holmes,
Apart from the authorities cited, it would seem clear that no liability should be imposed on agents or brokers *343
acting innocently in such cases. The bonds, being negotiable, pass by delivery, and the transferee to whom they are sold, who takes them for value and in good faith, obtains a good title as against the real owner: Cochran v. Fox Chase Bank,
Judgment affirmed.