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BEAROFF v. BEAROFF BROS. (10/16/74)

decided: October 16, 1974.

BEAROFF, APPELLANT,
v.
BEAROFF BROS., INC.



Appeal from order of Court of Common Pleas of Montgomery County, No. 71-15193, in case of Francis J. Bearoff v. Bearoff Brothers, Inc. and Charles Bearoff.

COUNSEL

Frederick J. Fiechter, Jr., for appellant.

John G. Kaufman, with him Bean, DeAngelis, Kaufman & Kane, for appellees.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Nix. Mr. Justice Pomeroy concurs in the result. Mr. Chief Justice Jones and Mr. Justice Roberts dissent.

Author: Nix

[ 458 Pa. Page 496]

The corporate appellee, Bearoff Brothers, Inc., was incorporated on April 1, 1953. From September 29, 1956 until June 30, 1959, all of the company's authorized and issued stock was owned by Frank Bearoff, now deceased, who was the father of the instant appellant and of the individual appellee. In June of 1959, the deceased executed share Certificate No. 5 for 2,450 shares of stock of Bearoff Brothers, Inc. in the name of appellant. A certificate for the same number of shares was at that time also executed in favor of Charles Bearoff, and both certificates were left by the father in the Share Certificate Book in the safe in the company office to which all three had access.

Subsequently, appellant gained possession of the certificate executed in his favor under circumstances that are in dispute. In January of 1962, the father filed a complaint in equity in Montgomery County as of No. 62-170 seeking the return of the certificate which the complaint alleged was improperly taken by appellant. During the course of that action an Answer, New Matter, and a Reply to New Matter was filed raising the issue of the ownership of the shares and the

[ 458 Pa. Page 497]

    allegation of a gift. On or about August 13, 1964, appellant returned the certificate in question to his father without an endorsement. With the approval of appellant that action was marked "Settled, Discontinued and Ended."

The instant action in equity was commenced by appellant on December 22, 1971, against the Company and his brother, Charles (the father having died in the interim), demanding the return to appellant of the same said stock certificate. In an answer the appellee asserted by way of new matter the defense of "res judicata" and "laches." The Chancellor entered a decree nisi dismissing the complaint on the grounds of res judicata and after exceptions were filed and argued before a Court en banc a final decree affirming the Chancellor's finding was entered. Hence, this appeal pursuant to the Act of 1970, July 31, P. L. 673, § 202(4), 17 P.S. § 211.202(4).

This court announced the perimeter of the doctrine of res judicata in our decision in Stevenson v. Silverman, 417 Pa. 187, 190-191, 208 A.2d 786, 787-788 (1965), cert. denied, 382 U.S. 833 (1965): "For the doctrine of res judicata to prevail, there must be a concurrence of four conditions: (1) Identity in the thing sued upon; (2) identity of the cause of action; (3) identity of persons and parties to the action; and (4) identity of the quality or capacity of the parties suing or sued: Burke v. Pittsburgh Limestone Corporation, 375 Pa. 390, 100 A.2d 595 (1953), and Fisher Building Permit Case, 355 Pa. 364, 49 A.2d 626 (1946). . . . A final valid judgment upon the merits by a court of competent jurisdiction bars any future suit between the same parties or their privies on the same cause of action: Goldstein v. Ahrens, 379 Pa. 330, 108 A.2d 693 (1954); Burke v. Pittsburgh Limestone Corporation, supra; Loughran v. Matylewicz, 367 Pa. 593, 81 A.2d 879 (1951); and Central Pa. Lumber Co. v. Carter, 348 Pa. 429,

[ 458 Pa. Page 49835]

A.2d 282 (1944). As stated in Goldstein v. Ahrens, 379 Pa. at 334, 108 A.2d at 695: 'When a court of competent jurisdiction has determined a litigated cause on its merits, the judgment entered and not reversed on appeal is, as between the parties to the suit and their privies, final and conclusive with regard to every fact which might properly be considered in reaching a judicial determination and with regard to all points of law adjudged ...


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