Judd v. Fulton National Bank

Stephens, J.

Where a certificate of registered corporate stock indorsed with a written transfer by the owner was delivered to another person as a mere depository for safe-keeping, with no power to sell, pledge, or otherwise transfer the stock, and where afterward, without the consent of the owner of the stock, the. blank transfer was filled out with the *707name of a person as transferee, and where under the custom of the trade of those dealing in buying and selling registered certificates of stock the stock was not salable until the genuineness of the signature of the holder of the stock attached to the transfer indorsed on the certificate and the title of the holder of the certificate were guaranteed by some bank or other recognized institution, a particular bank which, after the blank indorsement of transfer on the certificate was filled in in the name of a transferee, certified only to the genuineness and correctness of the signature of the holder transferring the stock for the purpose of rendering the stock marketable (where the bank had no knowledge, or was not negligent in failing to know, of the agreément between the holder of the stock and the person with whom he deposited the stock, or of the conditions above indicated) was not, by reason of having certified to the genuineness and correctness of the holder’s signature and thus rendering the stock marketable, liable to the holder for any loss sustained by an unauthorized sale and conversion of the proceeds of the stock by the depository with whom the holder had originally deposited it under the conditions above indicated. The petition, in a suit by the certificate-holder against the bank, failed to set' out a cause of action, and the court properly sustained the general demurrer.

Decided June 18, 1936. Rehearing denied Judy 23, 1936. Alex. M. Hitz, for plaintiff. Harold Hirsch, Marion Smith, Hamilton Lolcey, for defendant.

Judgment affirmed.

Jenkins, P. J., and Sutton, J., eonewr.