179 A. 218 | Pa. | 1935
Plaintiff, here appellee, purchased twenty-one of appellant's registered debentures, each in the principal sum of one thousand dollars payable "to the registered owner . . . on demand." Appellee at all times remained the registered owner of these debentures on appellant's books, and demanded from appellant payment of the aggregate sum of the principal and interest of these bonds. Payment was refused because the debentures had been lost, on the ground that this might cause a double liability in the event that the bonds later appeared in the hands of a transferee for value without notice, and appellant demanded an indemnity bond which appellee was unable to give. In plaintiff's action to recover the amount of the bonds a summary judgment was entered, this defense being held insufficient.
By the terms of the instruments, the promise is to pay money upon demand to a specific individual, whose name is registered upon the books of the corporation; they are "transferable only upon . . . presentation at the office of the company, with a written assignment duly executed by the . . . registered owner"; being registered as to principal and interest, they are commonly known as fully registered bonds: Benwell v. Mayor, etc., of Newark,
Registered bonds as a general rule are nonnegotiable: Cronin v. Patrick Co., 89 Fed. 79; Benwell v. Mayor, etc., of Newark, supra; Chester G. S.D. Co. v. Securities Co.,
Entirely apart from the question of the effect of registration and recording of transfers, the omission from appellant's bonds of the essential words of negotiability excludes any possibility of their being considered negotiable instruments: Act of May 16, 1901, P. L. 194, section 1 (4). This being so, a bona fide transferee of one of these bonds would not be entitled to the status of a holder in due course as an incident of the instrument.
While there is no express provision in appellant's bonds making surrender a condition to payment, such a condition may be fairly implied, and surrender should be required unless it reasonably appears that such is impossible by reason of loss, theft or destruction of the instrument. See Zander v. N.Y.S.
T. Co.,
We have held that payments to a mortgagee without actual notice of the assignment of the mortgage are valid (Landis v. Robacker,
Here the appellant apparently concedes that the bonds have been lost, but insists upon appellee supplying it with an indemnity bond. There is no justification for such a demand. Where, as here, a lost instrument is not negotiable there is no risk of double payment arising out of the nature of the instrument, and hence no necessity for indemnifying the obligor: Gilbert v. First Nat. Bank of Middleburg, 22 Pa. Dist. 931 (1913); Zander v. N.Y. S. T. Co., supra.
The judgment is affirmed.