The opinion of the court was delivered by: MCGLYNN
In August of 1983 the plaintiff, a lawyer, received as a fee from a client a properly assigned certificate for 10,625 shares of Patlex stock. On August 19, 1983 the certificate was forwarded to the defendant, a securities broker, with instructions to open an account and to "take whatever action is necessary to transfer the registration of the stock into this firm's name." In spite of these specific instructions the certificate was forwarded by the defendant to the transfer agent with instructions to transfer the stock to Cede & Co., a "street name." The name of Sprague & Rubenstone which had been inserted into the assignment on the reverse side of the certificate was crossed out and the name "Cede & Co." was substituted. Thereafter the certificate was sent to Depository Trust Company, New York City for "safekeeping."
On Thursday, December 8, 1983 a lawyer in the Sprague firm called Advest and requested the stock certificate because it was going to be pledged to the Commerce Bank of New Jersey as collateral for a $25,000 loan to one of Sprague's clients which was to be closed on the following Monday, December 12, 1983.
Because they could not produce the certificate on such short notice Advest agreed to provide a certified check in the amount of $25,000 to be used as collateral until the stock certificate became available. This arrangement was satisfactory to all concerned and the check was delivered in time for the closing of the loan on December 12.
The stock certificate properly made out in the name of Sprague and Rubenstone was delivered on December 19, 1983. At that point, instead of immediately substituting the certificate of stock, the Sprague firm and the Commerce Bank entered into protracted negotiations over the language of the hypothecation agreement which was not resolved until around February 13, 1984. On that date the stock was substituted as collateral and the certified check was retrieved and returned to Advest.
Because he believed he was injured by the defendant's conduct, Sprague filed this action claiming damages based on five distinct theories, three of which were submitted to the jury as follows:
1. Unlawful conversion by Advest of the shares of stock by causing the shares to be registered in a name other than Sprague & Rubenstone.
2. Breach of contract by failing to carry out the contract to have the stock transferred to the name of Sprague and Rubenstone, and
3. Breach of a fiduciary duty which arose as a result of the relationship of stock broker and client.
With regard to the loss of the lawyers' time, except for the period between December 8 and December 12, all time spent by the lawyers would have been expended even if the certificate had been delivered when demanded. The time between December 8 and 12 was de minimus consisting of several telephone conversations with Commerce Bank and Advest personnel making arrangements for substituting the collateral.
The jury in response to special interrogatories found that Advest had improperly converted the stock and breached the contract as well as its fiduciary duty but concluded also that the Sprague firm suffered no compensatory damages, and refused to award even nominal damages. Nevertheless, the jury awarded punitive damages in the amount of $15,000. (See Appendix.)
Citing Hilbert v. Roth, 395 Pa. 270, 276, 149 A.2d 648 (1959), Advest contends that in the absence of actual or compensatory damages an award of punitive damages cannot be sustained. In Hilbert the Pennsylvania Supreme Court held that the satisfaction of a judgment for compensatory damages against one tort-feasor precludes an action ...