Warren L. Soffian, Bogutz & Mazer, P. C., Philadelphia, for appellant.
Alan Greenberg, Rawle & Henderson, Philadelphia, for appellee, Williams Brothers Co.; J. Grant McCabe, III, Philadelphia, of counsel.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Manderino, J., filed a dissenting opinion.
This case presents the question whether an acquirer of a lost security is entitled to compel the corporate issuer to register a transfer of the security on its books. We hold that, in the circumstances of this case, she is not.
On December 4, 1967, appellant*fn1 entered a judgment against Robert Gunning. A writ of execution issued, and in May, 1968, the sheriff levied on personal property
of Robert Gunning consisting of ten certificates evidencing shares of the issuer's stock. The certificates were sold to appellant at a sheriff's sale on March 13, 1972. Prior to the sale, according to appellant's complaint, the sheriff was advised by an agent of the issuer that the seized shares were valid certificates subject to transfer.
Following the sheriff's sale, appellant presented the certificates to a securities broker for the purpose of registration of the transfer. In early April, 1972, the certificates were forwarded to the transfer agent, who registered the transfer and returned shares of the issuer to the broker for the account of appellant. Several days thereafter, however, the registration of the transfer was voided as a result of the discovery of a stop order placed on these certificates. The issuer and the transfer agent refuse to register appellant as a shareholder of the issuer.
The stop order resulted from the loss of these certificates by Robert Gunning. In June, 1960, he executed an affidavit in which he stated that he had lost the certificates in 1956. Replacement certificates had been issued to him by the transfer agent.
Appellant brought this action in equity to compel the issuer to register the transfer. The issuer brought in Central Penn National Bank, transfer agent at the time of the levy in 1968, as a third-party defendant. In its answer, Central Penn pleaded that in June, 1968, its counsel had by letter informed appellant that the certificates seized by the sheriff had been cancelled and replaced upon the affidavit of Robert Gunning that they had been lost; it also pleaded that in August, 1968, a former transfer agent ...