Appeal, No. 347, Jan. T., 1962, from decree of Court of Common Pleas No. 7 of Philadelphia County, June T., 1961, No. 1495, in case of Grace A. Smith McLaughlin v. James J. McLaughlin, George E. Snyder, Jr. and Frances Snyder, co-partners trading as Geo. E. Snyder & Co. Decree affirmed; reargument refused February 25, 1963.
James A. Peace, with him Floyd W. Tompkins, and Tompkins & Peace, for appellants.
Francis T. Anderson, with him John Patrick Walsh, for appellee.
Before Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'brien and Keim, JJ.
OPINION BY MR. JUSTICE O'BRIEN
Defendant-appellant, James J. McLaughlin, and plaintiff-appellee, Grace A. S. McLaughlin, are husband and wife. They owned, as tenants by the entireties, fifty-five shares of the common stock of American Telephone and Telegraph Company, represented by three stock certificates for five, twenty-four and twenty-six shares respectively. These shares were originally acquired by the parties as follows: (1) five shares purchased by Mrs. McLaughlin under an employee's stock purchase plan and payroll deductions, while she was employed by Bell Telephone Co., originally issued in the joint names of the husband and wife, as tenants by the entireties; (2) twenty-four shares acquired by Mrs. McLaughlin as legatee under her father's will, originally registered in her name and subsequently transferred into the joint names of the husband and wife, as tenants by the entireties; and (3) twenty-six shares acquired as the result of a stock split, originally issued in the joint names of the husband and wife, as tenants by the entireties.
Marital difficulties subsequently arose between the McLaughlins and domestic frictions ensued. In an apparent effort to settle their affairs, Mrs. McLaughlin procured the endorsement, in blank, of Mr. McLaughlin on the stock certificates and presented them to Geo.
E. Snyder & Co. with directions to sell five shares and transfer the other fifty shares to her in her individual name. About one week later, Mr. McLaughlin informed Snyder & Co. that his signature had been obtained under false pretenses and advised Snyder that he repudiated his endorsement. As a result of this letter, Snyder refused to proceed with the transfer of fifty shares of the stock. In the interim between presentation of the certificates to Snyder and Mr. McLaughlin's letter, Snyder had sold five shares and issued a check payable to Mr. and Mrs. McLaughlin for the proceeds of the sale. Mrs. McLaughlin endorsed this check in both her and her husband's names and negotiated it.
Upon the refusal of Snyder to proceed with the transfer of the shares in its possession, Mrs. McLaughlin instituted an action in equity against Mr. McLaughlin and Snyder, seeking, inter alia, a declaration of her ownership of the fifty shares, an injunction enjoining Mr. McLaughlin from interfering with her right to obtain a transfer and issuance of certificates in her name alone, and an order directing Snyder to deliver the certificates in its hands to her. After conclusion of the pleading cycle, the matter was tried and the chancellor made findings of fact and conclusions of law and entered a decree nisi, granting the relief prayed for in the complaint. Mr. McLaughlin filed exceptions to the adjudication, which were overruled, and the decree nisi was made final; this appeal followed.
The chancellor found that all of the stock was originally the separate property of Mrs. McLaughlin; that Mr. McLaughlin had failed to establish that his signatures to the blank powers of attorney had been obtained by fraud or misrepresentation and that he was bound by said signatures. He further held that the signatures were ...