Analyze the issue based on the following criteria:
Eleanor Schock discovered that her late father’s attorney, Pat Nero, had embezzled from the estate of her father, Miller, including the sum of $ 23,331.72 in Miller’s savings account at Old Stone Bank. At the time Nero withdrew the funds, Old Stone was being run under the conservatorship of the Reso-lution Trust Corporation ( RTC), the FDIC’s statu-tory predecessor. As holder of her father’s estate’s claims, Schock sued the FDIC, as receiver for Old Stone, for breach of contract, alleging that the bank permitted an unauthorized signatory ( Nero) to withdraw funds on deposit in the Miller sav-ings account. The FDIC receiver argued that the bank had paid Nero, a fiduciary who was autho-rized to receive the money in the account, in good faith and should not be held liable because Nero misappropriated the money. Schock argued that Nero’s apparent authority to withdraw the money as Miller’s agent ended by operation of law when Miller died. In response, the FDIC receiver argued that apparent agency terminates only when a third party has notice of the termination. Schock offered evidence that the bank had actual notice that Miller had died when it permitted the Nero savings account withdrawal. Schock’s evi-dence included a bank employee’s statement that the bank had in place a procedure for checking the obituaries in the local paper to see whether bank clients had died, as well as the fact that an obitu-ary for Miller appeared in that paper.
Was Schock successful at trial? Did the publication of an obit-uary constitute actual notice? [ Shock v. United States, 254 F. 3d 1 ( 2001).]
