South Hills Trust Co. v. Baker

• Decision Date: 02 July 1924
• Docket Number: 117-1924
• Citation: 83 Pa.Super. 243
• Parties: South Hills Trust Company, Appellant, v. Baker, et al
• Court: Pennsylvania Superior Court

83 Pa.Super. 243

South Hills Trust Company, Appellant, v. Baker, et al

No. 117-1924

Superior Court of Pennsylvania

July 2, 1924

Argued April 30, 1924

Appeal by plaintiff, from decree of C.P. Allegheny Co., Jan. T 1923, No. 392, dismissing bill in equity in the case of South Hills Trust Company, a Corporation, v. Harry W. Baker, West Penn Vinegar Company, a Corporation, Louis Skirboll, I Skirboll, Louis Plung and Harvey A. Miller.

Bill in equity to enjoin the transfer of a certificate of stock and have a receiver appointed. Before Rowand, J.

The facts are stated in the opinion of the Superior Court.

The court dismissed the bill. Plaintiff appealed.

Error assigned was, among others, the decree of the court.

Affirmed.

C. Elmer Bown, and with him Edwin W. Smith, for appellant. -- The defendants' failure to affix the stamp to the assignment of the certificate invalidated the transfer: Dean v. Flint, 204 N.Y. 153; Luitweiler v. Luitweiler Pumping Engine Co., 231 N.Y. 494; Hall v. Davis, 95 Misc. (N.Y.) 315.

Emerson G. Hess, and with him Miller & Nesbitt, for appellees. -- Plaintiff never had any right in the stock in question: Duquesne Bond Corporation v. American Surety Co. of New York, 204 Pa. 203, 6 C.J. 213, section 397; Act of Assembly of June 4, 1915, P. L. 828, section 17 (Purdon's Digest, volume 7, page 7632, section 99); Dean v. Flint, 204 N.Y. 153.

Before Henderson, Trexler, Keller, Linn and Gawthrop, JJ.

OPINION

HENDERSON, J.

The plaintiff issued an attachment execution for the purpose of levying on certain shares of stock of the West Penn Vinegar Company alleged to be the property of Harry W. Baker, one of the defendants. Thereafter the bill was filed in this case praying for the appointment of a receiver to take possession of and sell the shares of stock; the proceeds to be applied toward the satisfaction of the plaintiff's judgment. The learned trial judge dismissed the bill on the ground that the stock had been assigned for a valuable consideration by Baker to Miller & Nesbitt before the attachment execution was served, and that therefore the stock was not subject to attachment. This conclusion was based on uncontradicted evidence from which it appeared that Baker was indebted to the firm of Miller & Nesbitt, for services as his attorneys to an amount in excess of the value of the stock; that on May 24, 1922, Baker agreed to transfer 135 shares of stock of the corporation to them in consideration of such legal services; that because of delay in the reorganization of the company, the stock certificate was not ready for delivery until the morning of October 7, 1922, although repeated demands had been made for it by Miller & Nesbitt prior to that time; that on October 7, 1922, Baker executed and delivered a written transfer of the shares of stock on the back of the certificate pursuant to his agreement of May 24, 1922. Neither Baker nor Miller & Nesbitt had any notice or knowledge of the attachment execution. The attachment was served on Baker, October 9, 1922, two days after the assignment of the stock to Miller & Nesbitt, and on Miller October 11, 1922. There was no service on Nesbitt. The bona fides of the transfer of the stock by Baker is not questioned; the contention of the appellant being that the transfer was void because the certificate was not stamped as required by the Act of June 4, 1915, P. L. 828, and that this objection can be raised although not made at the trial. Section 17 of the act provides: " No transfer of stock made on or after the time this act takes effect, on which a tax is imposed under the provisions of this act, and which tax is not paid at the time of such transfer, shall be made the basis of any action or legal proceeding, nor shall proof thereof be offered or received in evidence in any court." The act provides with respect to stamping as follows: " Where the transaction is effected by the delivery or transfer of a certificate, the stamp or stamps shall be placed upon the surrendered certificate and cancelled." The obligation to affix the stamp or stamps is thus imposed in the first section of the act: " Every person or persons making or effectuating any such sale or transfer shall procure, affix, and cancel the stamps," etc. The law is well established that a chose in action equitably assigned is not subject to the operation of an attachment and that an attaching creditor can stand on no better footing than his debtor. The same rule applies to shares of stock, and an interest can pass...