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Jennie Clarkson Home for Children v. Missouri, Kansas & Texas Railway Co.
Court of Appeals of New York
74 N.E. 571 (1905)
George Lessels stole registered bonds owned by the Jennie Clarkson Home for Children (children’s home) (plaintiff) that had been issued by Missouri, Kansas & Texas Railway Company (railway) (defendant). The bonds were not transferable unless their registered holder recorded the transfer on the railway’s books. Lessels brought the bonds to Robert Gibson (defendant), a member of the stock exchange, to convert the bonds to Lessels’s use. The railway told Lessels that a transfer would require (1) a resolution of the children’s home’s board of directors authorizing the transfer and (2) a power of attorney executed by the children’s home authorizing transfer to the bearer. Lessels forged the resolution and had a power of attorney (POA) drawn up at Gibson’s office. Lessels signed the POA in the name of the children’s home, with Gibson witnessing and signing the document. The railway changed the bonds to be payable to the bearer. Gibson sold the bonds and paid the proceeds to Lessels. The children’s home sued the railway and Gibson to recover the bonds’ value. The railway, in turn, requested a judgment against Gibson for any amount the railway was compelled to pay to the children’s home. The trial court entered judgment in favor of the children’s home, and the appellate division affirmed. The defendants appealed.
Rule of Law
Holding and Reasoning (Haight, J.)
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