The plaintiffs, as executors of the estate of Ann W. Roberts, deceased, were, prior to March 28, 1908, the registered owners and holders of $23,400 consols, hereafter called bonds, of the defendant Securities Company. These bonds were nonnegotiable and transferable only by indorsement, duly authenticated, upon surrender to the company. They were kept by the plaintiffs in a tin box in a vault of the First National Bank of West Chester, Penn. On or about the date named Gibbons G. Cornwell, a son of the plaintiff R. T. Cornwell, in some way not clearly explained in the record, gained access to the vault, broke open the box and stole $23,000 of the bonds. He then forged the names of the executors to the blank form of assignment for transfer on the back of each bond. The signature of his father was affixed by the use of a rubber stamp and that of the Chester County Guarantee Trust and Safe Deposit Company by a rubber stamp, and forging with a pen the name of B. S. Walton, its president. The corporate seal of the company was affixed to the assignment, and Gibbons G. Cornwell attached to each his false certificate of acknowledg*331ment as notary public, certifying that R. T. Cornwell, individually, and B. S. Walton, in his capacity as president, had personally appeared before him and duly acknowledged their respective signatures. Thereafter he obtained and attached to one of the bonds a genuine certificate of the county prothonotary, certifying his authority to take acknowledgments. He then mailed the bonds to the defendant Securities Company, with a letter written by him on the stationery of Corn-well & Cornwell, the law firm in which he and his father were partners, requesting that the bonds be transferred to the name of his father. The securities company, notwithstanding the fact that it noticed the signature of R. T. Cornwell had been made with a rubber stamp, and that the transfer was to be made to one of the executors individually, made no investigation, but did as requested and mailed the twenty-three new bonds in a letter addressed to Cornwell & Cornwell. The letter was opened by Gibbons G. Cornwell, who forged the name of his father to the indorsement on each of the new bonds and deposited them with Jamison Brothers & Co., brokers, as security for a speculative account carried by that firm for him. On the same day Jamison Brothers & Co. indorsed a guaranty of the genuineness of the signature of R. T. Cornwell on the back of each bond and repledged them with Edward D. Toland, one of the interveners in this action. The bonds subsequently passed through the hands of other brokers who have intervened in the action — each time the signature being guaranteed— and in June, 1911, were purchased by the defendant Equitable Securities Company. The transfer of the bonds by Jamison Brothers & Co., and all subsequent transfers, were made in good faith and without any knowledge of the forgery of the signature of R. T. Cornwell. The Equitable Securities Company, after it obtained the bonds, presented them to the Securities Company and had them transferred and new bonds issued to it in their place. The loss of the original bonds was not discovered by the plaintiffs until the early part of August, 1912, when notice was at once given to the appellants and a demand made that they deliver to the plaintiffs bonds of the same kind and issue, and of the same face amount as origin-. ally issued to them, or that the plaintiffs be paid the value *332of the same. They neglected and refused to comply with this demand and thereupon this action was brought to procure a judgment decreeing that the plaintiffs were the owners and entitled to the immediate possession of the bonds issued by the Securities Company.to the Equitable Securities Company; that the latter company be directed to deliver such bonds to the plaintiffs, properly indorsed; that the Securities Company be directed to transfer the same to the plaintiffs, and that an accounting be had for the interest paid on said bonds from March 1, 1912. The appellants separately answered and put in issue the material allegations of the complaint upon which a recovery was asked. The Securities Company asked that the complaint be dismissed, and in case judgment were recovered by the plaintiffs against it that it have judgment against the Equitable Securities Company indemnifying it against any damage it might sustain by reason thereof and against the intervenors to the extent of $18,000. The Equitable Securities Company asked that the complaint be dismissed, and in the event that the plaintiffs have a judgment against it for the cancellation of the bonds in its possession that it have judgment against the Securities Company for the amount of its loss, and against the intervenors to the extent of $18,000, that being the amount of bonds received from them. The intervenors jointly answered and asked that the complaint be dismissed, and in case judgment were rendered in favor of the plaintiffs against the Equitable Securities Company directing the surrender and cancellation of the bonds held by it that then judgment he awarded against the Securities Company in favor of the Equitable Securities Company for the amount of the damages which it might sustain by reason of such surrender. At the conclusion of the trial the court rendered a judgment to the effect that the plaintiffs, as executors and trustees of the Roberts estate, were entitled to the possession of $23,000 of bonds issued by the Securities Company; that the Equitable Securities Company held $23,000 of bonds as trustee for the benefit of the plaintiffs, which it was directed to deliver to them, properly indorsed, for immediate transfer on the books of the Securities Company; that the Securities Company was directed to cancel the bonds issued to the Equitable Securities *333Company and in place thereof issue to the plaintiffs twenty-three new bonds of the face value of $1,000 each, registering ^ the same in the names of the plaintiffs; and that plaintiffs have judgment against both the Securities and Equitable Company for $1,840, being the accrued interest on the $23,000 of bonds from March 1, 1912. The judgment also directed that the claims of the appellants against the intervenors be dismissed on the merits. It is from this judgment that the appeal is taken.
Three questions are presented by the appeal: (a) The right of the plaintiffs to recover the bonds from the Equitable Securities- Company; (b) the liability of the Securities Company; and (c) the liability of the Equitable Company and the intervenors.
I am of the opinion that the judgment, in so far as it directs the Equitable Securities Company to deliver to the plaintiffs the bonds held by it, properly indorsed, and to pay the interest thereon from March, 1912, is right and should be affirmed. The principal relief sought by the plaintiffs is the recovery of the bonds themselves from the Equitable Securities Company, and their registration by the Securities Company in the names of the plaintiffs.
It is strenuously urged by the intervenors on behalf of themselves and the Equitable Securities Company that the plaintiffs have no rights to these bonds; that their rights attached only to the bonds originally issued to them; and that they acquired no interest whatever in the bonds issued in their place in the name of E. T. Cornwell, subsequently transferred in the name of the Equitable Securities Company. I am unable to find any authority to support this contention.' As I understand it, the owner of securities which have been stolen and transferred by means of forged indorsements may reclaim them in the hands of the transferee, and this even though new securities have been issued to the transferee in his own name in place of the stolen ones. (Clarkson Home v. Missouri, Kansas & Texas R. Co., 182 N. Y. 47; Comstock v. Buchanan, 51 Barb. 146; Cottam v. Eastern Counties Ry. Co., 3 L. T. [N. S.] 465; Johnston v. Renton, L. R 9 Eq. 181; 26 Am. & Eng. Ency. of Law [2d ed.], 889; Cook Corp. [6th ed.] § 366.)
*334If the theft and forgery had been discovered while the bonds were in the hands of Gibbons G. Cornwell, I take it no one would doubt but what they could be recovered from him by the plaintiffs. The Equitable Securities Company and the intervenors derived their title through his theft and forgery, and this being so, they took the bonds with the same infirmities in title to which they were subject in his hands. The subsequent surrender of the bonds by the Equitable Securities Company and the registration and issue of new bonds in its name did not better its position. The trust in favor of the plaintiffs was impressed upon the new bonds, as it had been upon the old, because the new bonds simply took the place of the old. The right of the plaintiffs to secure the delivery of these bonds either to themselves or to the Securities Company for cancellation is sustained by the authorities cited. The bonds issued to the plaintiffs had been registered by the Securities Company in their name and by reason thereof the Securities Company, in legal effect, agreed not to transfer them or change such registration, except at their direction.' It undertook to pay the interest and principal only to such registered owners. One of the purposes of registration was to guard the owners against loss resulting from larceny. Being registered they were non-negotiable and could not be sold except by direction of the registered owners, in whose hands alone they were of value. The bonds having been stolen from the plaintiffs, they had a right to follow them, or the proceeds derived therefrom, and recover the same, wherever found. If they could not be found, they had the right to recover their value from those who had been instrumental in changing them from registered to negotiable bonds. (Pollock v. National Bank, 7 N. Y. 274; Clarkson Home v. Missouri, Kansas & Texas R. Co., supra; Knox v. Eden Musee Co., 148 N. Y. 441.)
The Equitable Company having received the interest upon the bonds since March 1, 1912, judgment was also properly directed against it and the Securities Company for that amount. .
The trial court found that the Securities Company was grossly negligent in making a transfer from the plaintiffs tc* *335B. T. Cornwell. His name wag indorsed upon each bond by a rubber stamp. This, in and of itself, was so unusual that every precaution ought to have been taken to determine that the use of such stamp was authorized. But no precaution whatever seems to have been taken, the Securities Company relying solely upon the assurances of the thief who requested the transfer to be made that B. T. Cornwell usually signed his name in that way. Not only this but the transfer of the bonds from the plaintiffs as executors of the Boberts estate to B. T. Cornwell was a transfer from one of the executors to himself individually. This, also, should have been sufficient notice to require the Securities Company to ascertain, before making the transfer, that the proper persons had directed it. (Cooper v. Illinois Central R. R. Co., 38 App. Div. 22.) Had the Securities Company made the slightest investigation at this time it would have ascertained that the request was unauthorized and the bonds had been stolen. Its failure and neglect in this respect was the primary and proximate cause of the loss which now must be borne by the Securities Company, the Equitable Company, or the intervenors. Under such circumstances, it seems to me, the loss should be borne by the Securities Company, and this under the well-recognized rule in equity that whenever one of two innocent persons must suffer by the act of a third, he who has made the loss possible must sustain it. (Hertell v. Bogert, 9 Paige, 52; Follett Wool Co. v. Utica Trust & Deposit Co., 84 App. Div. 151; Downey v. Finucane, 146 id. 209; affd., 205 N. Y. 251; Brown, Lancaster & Co. v. Howard Fire Ins. Co., 42 Md. 384.) All the parties, as above indicated, acted in entire good faith, but the fact cannot be overlooked that it was the omission on the part of the Securities Company to properly perform its duty which enabled the thief to make any use whatever of the bonds. Had the Securities Company made the proper investigation it would have refused to transfer the bonds, and in that case the title still would be in the plaintiffs and a loss would not have been sustained.
I think, therefore, that the court was right in holding that the intervenors were not liable to either company, but I think it erred in not giving the Equitable Company a judgment *336against the Securities Company for the value of the bonds directed to be surrendered to the plaintiffs.
The decision and judgment appealed from, therefore, should be modified to this extent and as thus modified the judgment should be affirmed, with costs to the plaintiffs.
Clarke and Scott, JJ., concurred; Ingraham, P. J., and Laughlin, J., dissented.