Pennsylvania Act 1927-52 — SECURITY RECEIPTS AND EQUIPMENT TRUST CERTIFICATES

Act text

SECURITY RECEIPTS AND EQUIPMENT TRUST CERTIFICATES
                  Act of Mar. 29, 1927, P.L. 73, No. 52               Cl. 12
                                  AN ACT

     Relating to the effect of the negotiation, under certain
        conditions, of security receipts and equipment trust
        certificates as therein defined.

        Compiler's Note:  Section 10-102 of Act 1 of 1953 provided
            that Act 300 is repealed insofar as it is inconsistent
            with Act 1.
        Section 1.  Be it enacted, &c.--Definitions.--That for the
     purpose of this act
        (a)  The term "security receipt" means any writing in and by
     which the signer sets forth that the person named therein, or
     the bearer, is entitled to receive a specified principal amount,
     par value, or number, of bonds, notes, debentures, shares of
     stock, equipment trust certificates, voting trust certificates
     of shares of stock, scrip, or other security or securities of
     any kind or character identified or described therein,
     absolutely, or when, as, and if received by the signer, or upon
     any other contingency stated or referred to therein.
        (b)  The term "equipment trust certificate" means any writing
     in and by which the signer sets forth that the person named
     therein, or the bearer, is entitled to an interest, or a share
     of, a specified principal amount or par value in money, or the
     payment of any money, under an identified trust indenture
     pursuant to the terms of which the title to rolling stock,
     vehicles, or equipment for use by or on the lines or routes of
     carriers, or to vessels or other maritime equipment, is held by
     trustees for the ratable benefit of all the holders of the
     interests or shares. The term "equipment trust certificate"
     shall include the dividend warrants or the coupons attached to
     such writing.
        (c)  The term "value" means any consideration sufficient to
     support a simple contract. An antecedent or preexisting debt
     constitutes value where a security receipt or equipment trust
     certificate is taken either in satisfaction thereof or as
     security therefor.
        (d)  The term "holder" means the person in possession,
     howsoever such possession may have been acquired, of any
     security receipt or equipment trust certificate,
        1.  Which by its terms entitles such person in possession to
     the benefits thereof; or
        2.  Which by its terms entitles a person named therein to the
     benefits thereof and which has been specifically endorsed to
     such person in possession;
        3.  Which by its terms entitles a person named therein to the
     benefits thereof and which has been endorsed in blank;
        4.  Which by its terms entitles the bearer to the benefits
     thereof.
        (e)  The term "person" includes individuals, partnerships,
     corporations, and other associations.
        (f)  For the purposes of this act, the character of any such
     security receipt or equipment trust certificate is not affected
     by the inclusion therein of other provisions not limiting the
     right of transfer or the negotiable quality thereof as in this
     act provided.
        Section 2.  Negotiability.
        (a)  Any security receipt or equipment trust certificate,
     which by its terms entitles the bearer to the benefits thereof,
     may be negotiated by delivery thereof by the holder.
        (b)  Any security receipt or equipment trust certificate,
     which by its terms entitles the person named therein to the
     benefits thereof, and which has been endorsed in blank, may be
     negotiated by delivery thereof by the holder, unless it contains
     an express provision limiting the right of transfer or the
     negotiable quality thereof.
        (c)  Any security receipt or equipment trust certificate,
     which by its terms entitles the person named therein to the
     benefits thereof and which has not been endorsed in blank, may
     be negotiated by endorsement and delivery thereof by the holder,
     unless it contains therein an express provision limiting the
     right of transfer or the negotiable quality thereof.
        (d)  A person to whom any security receipt or equipment trust
     certificate shall have been negotiated as in this section
     provided, and who shall have taken any such instrument from any
     person for value and without notice of prior defenses or
     equities or claims of ownership enforceable against such other
     person, shall have absolute title thereto, free of any defenses,
     or equities, or claims of ownership of or enforceable against
     the signer or any prior holder.
        (e)  Any holder of any such security receipt or equipment
     trust certificate shall be deemed prima facie to have title
     thereto as aforesaid; but, when it is shown that the title of
     any person who has negotiated such instrument was defective, the
     burden is on the holder to prove that he, or some person under
     whom he claims, acquired the title as a holder for value and
     without notice as aforesaid.
        (f)  The endorsement of a security receipt or equipment trust
     certificate shall not make the endorser liable for any failure
     on the part of the signer of the instrument to fulfill such
     signer's obligation.
        Section 3.  Application of Act.
        (a)  This act shall not be construed to limit or impair the
     negotiability or quasi-negotiability, by agreement or otherwise,
     of any instrument, whether or not defined herein.
        (b)  The provisions of this act shall apply only in respect
     of instruments issued after the date of the taking effect
     thereof.
        (c)  This act shall take effect immediately.