Jennie Clarkson Home for Children v. Missouri, Kansas & Texas Railway Co.

George Lessels stole registered bonds owned by the Jennie Clarkson Home for Children (plaintiff), which had been issued by the Railway (defendant). Because the bonds could only be transferred with board authorization and a power of attorney, Lessels forged a board resolution and had a power of attorney drawn up and signed in the Home's name at the office of Robert Gibson (defendant), a stock exchange member who witnessed and signed it. The Railway then converted the bonds to bearer form based on the forged documents, and Gibson sold them, paying Lessels the proceeds. The Home sued the Railway and Gibson to recover the bonds' value; the Railway, in turn, sought judgment against Gibson for any amount it had to pay the Home. The trial court and appellate division both ruled for the Home, and the defendants appealed.