5 A.2d 899 | Pa. | 1939
This appeal is from an order sustaining a demurrer to defendants' return to the alternative writ of mandamus requiring appellant, a Pennsylvania corporation, to recognize transfers of two stock certificates and to issue new certificates to plaintiff. The certificates, one *213 for 100, and the other for 40 shares, had originally been issued to and stood in the name of Mayer Silverman.
On February 21, 1936, Louis Sitnek, who is not a party to this suit which was brought October 26, 1938, presented the certificates and requested that new ones be issued to him. The corporation acknowledged their receipt, and, over its president's signature, stated that "new certificates for an equal number of shares will be issued within ten days from this date." They were, however, not issued, and in justification of the refusal, defendants, in their answer in this proceeding, denied that "the certificates were or are duly transferred and assigned to Louis Sitnek by Mayer Silverman. On the contrary said assignments, appearing on said certificates as purporting to be to Louis Sitnek, were and are obviously garbled and altered, the assignments having originally been made by said Mayer Silverman at a previous date, in the year 1933, to Sarah Silverman, now deceased, and her name as assignee having been partially obliterated thereon, and the name of Sitnek substituted therefor, without her knowledge or consent, and the original date of the assignment to her obliterated, garbled, and altered to February 24, 1936, being a date three days after their presentation for transfer to said Sitnek." They averred that Sarah Silverman died March 23, 1936, without having consented to the change in the assignments, and that her personal representatives have not consented.
On October 6, 1938, Sitnek delivered to plaintiff an assignment of the shares which plaintiff then made the basis of his demand on the corporation and of this suit. Defendants contend that the alleged defect in Sitnek's title appears by inspection of the certificates, and that therefore neither he nor plaintiff is in the position of a bona fide purchaser for value without notice.1 They *214 aver that Silverman's transfer was a fraud on his creditors, of whom, defendant Callahan, president of the corporation, was one.
The learned court below thought the answer inadequate for want of averment that the certificates had been delivered to Sarah Silverman, and for insufficiency of averment of fraud on Silverman's creditors.
It is the duty of the corporation, on proper request, to make due and legal transfer of stock sold or assigned: Schmitt v.Kulamer,
The first question is whether defendant was justified in refusing to transfer the stock to plaintiff without explanation of the suspicious circumstances alleged. If the partially obliterated endorsements of the certificates to Silverman's wife are regarded as showing that they had been transferred to her, (sec. 21 of the Uniform Stock Transfer Act, referred to later) the refusal of *215 plaintiff's demand would find support in the rule applied in cases cited above and the writ would not be issued until the court was satisfied that the corporation was assured of adequate protection against loss.
The Uniform Stock Transfer Act of 1911, P. L. 126, 15 PS section 301 et seq., sets forth the methods by which stock may be transferred. Section 1, 15 PS section 301, provides, inter alia, that certificates and the "shares represented hereby can be transferred only (a) By delivery of the certificate, indorsed either in blank or to a specified person, by the person appearing by the certificate to be the owner of the shares represented thereby, . . ." Neither statute nor decision(Shattuck v. American Cement Co.,
The averment that the proposed transfer by Mayer Silverman was in fraud of creditors, one of whom was George F. Callahan, the president of defendant corporation, requires no discussion; if Callahan has any claim against Silverman it cannot be redressed in this way; he has other familiar remedies.
The learned court erred in sustaining the demurrer; the order appealed from is reversed and the record is remitted for further proceedings, costs to abide the event.