Court Opinion

ID: 7894386
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:51:36.543685+00
Date Added: 2024-06-11T16:32:01.232021
License: Public Domain

Bartol, C. J.,
delivered the opinion of the Court.
It being conceded that the stock belonging to Denson, had been transferred without his knowledge or consent, by means of the forgery of his name upon the powers of attorney, it is clear that his title was not divested thereby, and therefore the decree of the Circuit Court was right in so far as it required the Railroad Co. to issue and deliver to the complainant new certificates of stock Of the same dates and amounts as those held by Denson, and to pay over the dividends which had accrued thereon. Hildyard vs. South Sea Co., et al., 2 Peere Wms., 76 ; Brown, Lancaster & Co. vs. Howard F. Ins. Co., 42 Md., 384.
From that part of the decree no appeal has been taken.
The only question we have to decide is whether the loss resulting from the forgery, should be borne by the appellants or by the Railroad Company. Each of these parties .are alike innocent, the former loaned their money upon the pledge of the stock, in good faith, believing the signature of Denson to be genuine ; and the latter, in like good faith, upon receiving the original certificates from the appellants, cancelled them and issued new ones in the name of the appellants.
The question appears to be identical with that which arose between Brown, Lancaster & Co. and The Howard Fire Insurance Co. reported in 42 Md., 384.
In that case certain stock of the Fire Ins. Co. belonging to Denson, had been pledged, by one Magruder, to Brown, Lancaster & Co. as collateral security for a loan, by means of powers of attorney purporting to be executed *559by Denson, but upon which his name had been forged, by the same person who committed the forgeries in the present case. «
The original certificates being returned by Brown, Lancaster & Co. to the Ins. Co. were cancelled, and new ones in lieu thereof were issued to Brown, Lancaster & Co. The forgery being afterwards discovered, it was decreed that Denson’s assignee was entitled to have the stock restored to him, and as between Brown, Lancaster & Co. and the Ins. Co. it was held, that the former, having received the transfer of the stock, upon forged powers of attorney, were not entitled to hold the same as against the company not having given any consideration therefor, and the transfer having been made, through a mutual mistake of facts. And it was further held that the loss must be borne by Brown, Lancaster & Co. the same being the result of their own error, in advancing their money upon forged and fraudulent powers of attorney, and not having been caused by any negligence on the part of the company.
That decision, unless it is to be overruled, and we have seen no reason to doubt its correctness, is conclusive of the present case. We discover nothing in the facts and circumstances of this case, as disclosed by the record, which distinguishes it in principle from the,other. In each of them, the question arises between the original parties, — ■ between the corporation and the parties who took the certificates in the first instance, upon the faith of the forged powers of attorney. The rights of third persons are not involved, claiming as bona fide purchasers from the appellants upon the faith of the stock having been subsequently transferred to them, and being registered in the names of the company. “That,” as was said in Brown, Lancaster & Go’s case, “would present a different question.” The sales made by the appellants to Whitridge and Cohen, do not affect the rights of the parties, because it appears by the proof in the cause, that they were made after the appellants *560were notified of the forgery. This notice was given on the 28th day of August 1873, and the sales were made on the 29th and 30th of the same month. There is some conflict in the testimony on this subject, Mr. John A. Hambleton, states that he had no knowledge or notice of the forgery at the time of the sales; but he must be in error in this ; for it is conclusively proved by the testimony of William A. Boyd that he was told of the, forgery on the 28th day of August, and this testimony is confirmed by that of David Fowler, and Isaac M. Denson ; and by the fact that the telegram to Wing, the secretary of the Bailroad Co. which was sent to him after the interview of these witnesses with Mr. Hambleton, was received on the 29th at 8^ A. M. It is evident from the account of the interview, given by the witnesses that Mr. Hambleton, paid but little attention to what they said to him, considering that they had no right to intrude upon him with reference to the transaction, and in this way we may account for his omission to notice their statements, and his failure to recollect them. That the notice was given on the 28th we think is satisfactorily established by the proof.
The payment of the dividends on the stock, to the appellants after the Bailroad Company was informed of the forgery, has no significance, and cannot estop the Company, they were not paid by the direction of the Company, but as the testimony shows, through the mistake or inadvertence of the officer of the Baltimore and Ohio Bailroad Company, charged with the duty of paying the dividends, in overlooking or failing to observe the directions given by the officers of the Central Ohio B. B. Co. — that “ they were in litiqation and were not to be paid till ordered by the Court.”
It has been argued by the appellants’ counsel, that the conduct of the appellee in transferring the stock, cancel-ling the original certificates and issuing others to the appellants on the 20th day of August, operated to lull *561them into false security and. prevent them from seeking their remedies, by causing the arrest of the forger, and “that the loss of these remedies is sufficient to render the railroad company responsible to them, although they advanced their money before getting the certificates.”
In support of this position we have been referred to Knights vs. Wiffin, 5 Q. B., (L. R.,) 660, and The Continental N’l Bank vs. The N’l Bank of the Commonwealth, 50 N. Y., 575.
A brief reference to those cases, will show that they have no application to this.
In Knights vs. Wiffin the facts of the case and the decision are thus stated in the brevier note: “The defendant having a quantity of barley in sacks, lying in his granary which adjoined a railway station, sold eighty quarters of it to M. ifo particular sacks were appropriated to M., but the barley remained at the granary subject to his orders ; M. sold sixty quarters of it to the plaintiff who paid him for them, and received from him a delivery order addressed to the station master, as was usual in such cases. The plaintiff sent this order in a letter to the station master saying, ‘ Please confirm this transfer.’ The station master showed the delivery order to the defendant, who said All right, when you get the forwarding note, I will put the barley on the line.’ M. became bankrupt; and the defendant as unpaid vendor refused to deliver the barley when the forwarding note was presented to him by the station master, acting for the plaintiff. It was held that the defendant was estopped by his statement to the station master, from denying that the property in the goods had passed to the plaintiff; for by making such statement he induced the plaintiff to rest satisfied under the belief that the property had passed, and so to alter his position, by abstaining from demanding back the money which he had paid to M.”
*562■ The decision in 50 N. Y., 575, rests upon the same ground. It was there held that “it is-not necessary that a party should act affirmatively upon a. declaration to claim an estoppel. If he has acted not in reliance upon it, hut has means in his power to retrieve his position, and relying upon the statement, and in consequence of it, he refrains from using these means, his claim will be upheld.”
We are not disposed to question the soundness of this rule; but in each of these cases the declarations, which created the estoppel, were made by a party whose duty it was to know and' state the truth, and were relied on by one, who had no other means of information, or was justified in relying upon such declarations.
Now the conduct of the Railroad Company which is relied on by the appellants, as creating an estoppel against the Company, consists in the issuing of the certificates to the appellants upon the faith of the forged powers of attorney, sent them by th'e appellants. The Company was not exclusively charged with the duty of ascertaining whether the signature of Denson -was genuine, nor had the appellants any right to rely upon the conduct or declarations of the Company, in that respect. It was equally their duty to ascertain the genuineness of the signature, they had the same or greater facilities for inquiring into that matter, and having advanced their money upon the faith of the original certificates, without any inquiry with respect to the genuineness of Denson's signature; or any •act or declaration of the Company to mislead them, they cannot claim that the Company is estopped by its subsequent conduct in accepting as genuine, the powers of attorney transmitted to them by the appellants, and transferring the stock at their instance.
The case is one of great hardship ; for the loss must fall inevitably upon innocent parties ; it has resulted from the error or inadvertence of the appellants, and there is no *563rule or principle of equity which, entitles them to cast it upon the Railroad Co. since it was not directly occasioned hy any negligence on its part.
(Decided 8th June, 1876.)
The decree of the Circuit Court must be affirmed and the cause remanded.

Decree affirmed, and cause remanded.