This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 497.— Is the manager justified in acting on a power of attorney from a shareholder of the bank, which authorizes him to sell and transfer certain of its shares on behalf of the shareholder, and to receive the consideration money, etc., when the same is handed to him by a broker, with the request that the transfer be made to his nominee, the proceeds of the shares not being paid to the manager on behalf of the shareholder, but left to be deposited by the broker ?
Answer.—We think that a bank officer would not be justified in acting on such a power of attorney in the way mentioned. If as a matter of fact the shareholder did not get the proceeds from the broker, the officer acting as attorney would probably be responsible to him therefor, unless he could show that the broker had authority from the shareholder to receive the money.
It is not unusual for such powers of attorney to be given, but we think the banker should require in every case that they should be accompanied by a letter from the shareholder, indicating how they are to be used.