WILLIAMS v. BURKE (2000)

Order, Supreme Court, New York County (Beatrice Shainswit, J.), entered on or about April 14, 2000, which, inter alia, granted defendant's motion for summary judgment dismissing the complaint, unanimously modified, on the law, to declare that plaintiff is not the owner of the subject 100 shares of common stock in 41st Street Gourmet Shop, Inc., and otherwise affirmed, with costs to defendant.

Although plaintiff claims to be the owner of shares of stock allegedly assigned to him by defendant as security for the repayment of a loan that subsequently went into default, defendant's obligation to repay the loan was discharged in bankruptcy and plaintiff did not, prior to the discharge of the loan obligation, perfect his security interest in the assigned shares.   Pursuant to UCC 9-304, plaintiff, to perfect his security interest, was required to take possession of the stock certificates corresponding to the assigned shares.   Those stock certificates, however, had been lost and plaintiff did not, in advance of the discharge of the underlying debt, take the steps necessary for their reissue (see, Brief v. 120 Owners Corp., 157 A.D.2d 515, 549 N.Y.S.2d 706).   Since declaratory relief was sought, we modify only to declare that plaintiff has no ownership interest in the disputed shares of stock (see, Lanza v. Wagner, 11 N.Y.2d 317, 334, 229 N.Y.S.2d 380, 183 N.E.2d 670).