Securities Law Commons^™

Brokers-Liability In Conversion For Sale Of Stolen Bonds

Michigan Law Review

Plaintiffs, brokers, sold on the Exchange as agents for a supposedly reputable customer, certain negotiable bonds. Purchasers, upon learning that the bonds had been stolen, returned them to the plaintiffs who, pursuant to a rule of the Exchange, substituted other bonds of unquestioned title. In an action by the plaintiffs against an insurance company, subrogated to the rights of the original owners, for a declaration of ownership, held, for the plaintiffs. Gruntal v. National Security Co. (N. Y., Nov., 1930) 173 N.E. 682.