corpo digest 9

8/9/2019 Corpo Digest 9

http://slidepdf.com/reader/full/corpo-digest-9 1/6

PHILIPPINE TRUST COMPANY vs MARCIANO RIVERA

Mariano Rivera = one of the incorporators of Cooperativa Naval Filipina

The corporation became insolvent = Phil Trust became the ASSIGNEE duringban ruptc!

Phil Trust instituted to recover one"half of the stoc subscription of the defendant# $%c $as N&T PAI' b! Mariano (

Reason for non"pa!ment = resolution $as made)* capital should be reduced b! +, per centum-* subscribers released from the obligation to pa! an! unpaid balance of

their subscription in e.cess of +, per centum of the same

Trial /udge ruled resolution relied upon $as $ithout effect and $as still liable for theunpaid balance*

0ence appeal*

Held: YES)* subscription to the capital of a corporation constitute a find to $hich

creditors have a right to loo for satisfaction of their claims and that theassignee in insolvenc! can maintain an action upon an! unpaid stocsubscription in order to reali1e assets for the pa!ment of its debts

2. Gen RULE: A corpor !"on # s no po$er !o rele se n or"%"n ls&'scr"'er !o "!s c p"! l s!oc( )ro* !#e o'l"% !"on o) p +"n% )or #"ss# re

Exception: 1. valuable consideration for such release 2. as against creditors a reduction of the capital stock can

take place only in the manner an under theconditions prescribed by the statute or the charteror the articles of incorporation

)* Resolution $as $holl! ineffectualan attempted $ithdra$al of so much capital from the fundupon $hich the compan!2s creditors $ere entitled ultimatel!to rel!effected $ithout compliance $ith the statutor! re3uirements

ROMANA MIRAN,A vs TARLAC RICE MILL CO.- INC.

Alberto Miranda subscribed for ),, shares of Tarlac Rice Mill 4ompan! T& 5EPAI' IN INSTA66MENTS

0e transferred in lieu of cash for the benefit and to the credit of the Tarlac Rice Mill4ompan!7 Inc = a parcel of land

Tarlac loaned from Mariano Tablante and mortgaged the said land to him

5ecame due on )8-8 = Not Paid = Sold the 6and for pa!ment

Miranda 3uestioned the sale should have not be made because9)* violated the terms of the contract in mortgaging the land = because the

onl! sum then due is :,,,-* that $hen the remaining installments of the stoc subscription became

due = no obligation to pa! because the corporation had alread! ceasedto do business

Iss&e:;&N the mortgage and subse3uent sale of the land is valid<

Held: YESa( 5&' ma! at an! time declare due and pa!able to the corporation unpaid

subscriptionsthis po$er of the directors is absolute and cannot be limitedb! the subscription contract

' No c ll "s necess r+ $#en s&'scr"p!"on "s p + 'le / $#en "! "sp + 'le "n "ns! ll*en!s ! spec")"ed !"*es

RULE / d&!+ o) !#e s&'scr"'er !o p + AS SOON AS IT IS,UE / $"!#o&! n+ c ll or de* ndailure = action ma! be brought at an! time;hen this action $as filed on September -7 )8:,7 the last ofthe instalments had alread! become pa!able in accordance$ith the subscription agreement*Neither the fact that the corporation has ceased to dobusiness nor the fact that the other stoc holders have notbeen re3uired to pa! for their shares in accordance $ith their subscription agreement /ustifies us in ordering thecorporation to return to the plaintiff the amount paid in b!

Alberto Miranda*

,E SILVA vs A0OITI1 COMPANY- INC.

'e Silva subscribed for >+, shares of stoc of Aboiti1 = Paid -,, shares onl!

he $as notified of a resolution = declaring the unpaid subscriptions to the capitalstoc of the corporation to have become due and pa!able # $as published (

'id not pa! = 'eclared 'elin3uent

iled a complaint Resolution $as invalid = Grounds9)* prescribing another method of pa!ing the subscription to the capital

stoc different from that provided in its b!"la$s-* all the shares subscribed and not paid = shall be paid out of the ?,@ of

the profit obtained

Trial 4ourt dismissed the complaint* 0ence appeal*

Iss&e:;&N collect subscription b! another method different from that prescribed in the b!"la$s<

Held: YES)* it is discretionar! on the part of the board of directors to do $hatever is

provided in the said article relative to the application of a part of the ?,per cent of the profit

-* If the board of directors does not $ish to ma e use of said authorit! ithas t$o other remedies for accomplishing the same purpose

special remed! given b! the statute = per*"!!"n% !#ecorpor !"on !o p&! !#e &np "d s!oc( )or s le nd d"sposeo) "! )or !#e cco&n! o) !#e del"n3&en! s&'scr"'er PR& I'E' B in 4orporation 6a$ = $#"c# "s '"nd"n% &po

"! nd "!s s!oc(#oldersartificial entit! created b! virtue of that same la$ = made useof the discretionar! po$er granted to it b! that la$

:* the plaintiff has no right $hatsoever under the provision of the abovecited article B> of the said b!"la$s to prevent the board of directors fromappl!ing an! other method than that mentioned in the said article

4UA CUN vs RICAR,O SUMMERS

4hua Soco subscribed +,, shares of 4hina 5an ing 4orporation = paid half of thesubscription price

4ondition = failure to pa! = +,, shares specified in this receipt is sub/ect to sale b!the China anking Corporation for the pa!ment of an! unpaid subscriptions

4hua Soco e.ecuted a promissor! note in favor of the plaintiff ua 4un = chattelmortgage on the shares

+,, shares $ere attached and levied upon to satisf! his debt $ith 4hina 5an ing4orp

ua 4un thereupon brought the present action = Grounds9)* b! virtue of the pa!ment of the one"half of the subscription price-* in effect became the o$ner of -+, shares5. 0+ v"r!&e o) C# !!le Mor!% %e / #old pr"or"!+ over !#e cl "*

Trial court ruled in favor of ua 4un = &R'ER the return of the shares* 0enceappeal

Iss&e:;&N b! pa!ing one"half of the subscription in effect became the o$ner of -+,shares<

Held: NO A s&'scr"'er does no! 'eco*e !#e o$ner o) p r!"c&l r n&*'er o) s# rescorrespond"n% !o !#e *o&n! #e lre d+ p "d but merel! holds a right of e3uit! inthe total number of shares subscribed*

Co*ple!e o$ners#"p over the total number of shares subscribed $"ll onl+ ves!$ith the stoc holder &pon p +*en! o) !#e $#ole s&'scr"p!"on pr"ce.

Supplementary Notes: A ban ing corporation has no lien upon its o$n stoc for the indebtedness ofthe stoc holders even $#en !#e '+6l $s prov"de that the shares shall betransferable onl! upon the boo s of the corporation and that no such transfer shall be made if the holder of the shares is indebted to the corporation*



In the absence of special agreement to the contrar!7 a subscriber for acertain number of shares of stoc does not upon pa!ment of one"half of thesubscription price7 become entitled to the issuance of certificates for one"half the number of shares subscribed for*

An e3uit! in shares of stoc ma! be assigned7 the assignment becomingeffective as bet$een the parties and as to third parties $ith notice

RICAR,O A. NAVA vs PEERS MAR7ETING CORPORATION- RENATO R. CUSInd AMPARO CUSI

Teofilo Po subscribed to C, shares of Peers Mar eting 4orporation = -+@ of theamount of his subscription $as paid

Po sold to Nava his shares = Po represented that he $as 8!#e 'sol&!e ndre%"s!ered o$ner o) !$en!+ s# res8

Nava re3uested to register the sale in the boo s of the corporation

'enied because not full! paid

Po $as delin3uent in the pa!ment and corporation had a claim on his entiresubscription

Nava filed a petition for mandamus to order the PEERS Mar eting to register thesale

Peers mar etingDs defense their b!"la$ provides that = no s# res o) s!oc( % "ns!$#"c# !#e corpor !"on #olds n &np "d cl "* re !r ns)er 'le "n !#e 'oo(s o)!#e corpor !"on.

Iss&e:;&N the provision in the b!"la$s is valid<

Held: YES)* The corporation ma! include in its b!"la$s rules not inconsistent

$ith la$ governing the transfer of its shares of stocThe t$ent! shares in 3uestion7 ho$ever7 are not coveredb! an! certificate of stoc in Po2s name*

As no stoc certificate $as issued to Po and $ithout thestoc certificate7 $hich is the evidence of o$nership ofcorporate stoc 7 the assignment of corporate shares iseffective onl! bet$een the parties to the transaction*0EN4E no clear legal dut! on the part of the officers ofthe corporation to register the -, shares in Nava2sname*

-* A s!oc( s&'scr"p!"on "s s&'s"s!"n% l" '"l"!+ )ro* !#e !"*e !#es&'scr"p!"on "s * de.

subscriber is as much bound to pa! his subscription ashe $ould be to pa! an! other debtThe right of the corporation to demand pa!ment is noless incontestable*

Rep&'l"c Pl n!ers 0 n( vs. A% n

Robes Realt! secured a loan P)-,,,, from the Republic Planters 5anFF Partiall! in the form Mone! and Partiall! in the form ofpreferred shares of

stoc s

Stoc s bear the follo$ing terms and conditions9)* right to receive a 3uarterl! dividend of )@ #cumulative and participating (-* such preferred shares ma! be redeemed

Robes Realt! filed a complaint = ailure of the ban to give dividends and redeemthe shares

Trial court ordered the ban to9)* pa! Robes Realt! the face value of the stoc certificates as redemption

price-* )@ 3uarterl! interest thereon until full pa!ment

0ence Appeal*

Iss&e:;&N the ban can be compelled to redeem the preferred shares issued to R R'4and Robes<;&N entitled to the pa!ment of certain rate of interest on the stoc s as a matter ofright $ithout necessit! of a prior declaration of dividend<

Held: NO nd NO

9. option to redeem $as clearl! vested in the banGR: !#e rede*p!"on res!s en!"rel+ $"!# !#e corpor !"onnd !#e s!oc(#older "s $"!#o&! r"%#! !o e"!#er co*pel orre)&se !#e rede*p!"on o) "!s s!oc( Exception: other!ise provided in the stock certificatethe terms and conditions set forth therein use the $ord ma!= 0EN4E &PTI&NA6The 4entral 5an also made a finding that the 5an has beensuffering from chronic reserve deficienc! = &R'ERE' not toredeem an! preferred shares Since redemption $ould reducethe assets of the 5an to the pre/udice of its depositors andcreditorsThe directive7 in limiting the e.ercise of a right granted b! la$to a corporate entit!7 ma! thus be considered as an e.ercise

of police po$er*

2. Pa!ment of dividends to a stoc holder is not a matter of right but a matterof consensus

RULE / s!oc(#olders do no! 'eco*e en!"!led !o !#ep +*en! !#ereo) s * !!er o) r"%#! $"!#o&! necess"!+ o) pr"or decl r !"on o) d"v"dends

5. HInterest bearing stoc sH = on !hich the corporation agrees absolutely to pay interest before dividends are paid to common stockholders "s le%onl+ $#en cons!r&ed s re3&"r"n% p +*en! o) "n!eres! s d"v"dends)ro* ne! e rn"n%s or s&rpl&s onl+

Thus7 the declaration of dividends is dependent upon theavailabilit! of surplus profit or unrestricted retained earnings7as the case ma! be*even if there are e.isting profits7 the board of directors has thediscretion to determine $hether or not dividends are to bedeclared

Supplementary Notespreferred share of stoc = one !hich entitles the holder thereof to certain

preferences over the holders of common stock

preferences are designed to induce persons to subscribe for shares of acorporation

The most common forms ma! be classified into t$o9)* preferred shares as to assets = preference in the distribution of

the assets of the corporation in case of li"uidation-* preferred as to dividends = entitled to receive dividends on said

share to the extent agreed upon before any dividends at all are paid to the holders of common stock

RULE / T#ere "s no %& r n!ee- #o$ever- !# ! !#e s# re $"ll rece"ve n+d"v"dends.

Preferences # ( Includes9a( lien upon the propert! of the corporationb( being creditors of the corporation

FFFR&le / R"%#! o) SH "s s&'ord"n !e !o !#e Cred"!ors

Shareholders7 both common and preferred are considered # risk takers !hoinvest capital in the business arid !ho can look only to !hat is left aftercorporate debts and liabilities are fully paid *

Redeemable sharesusuall! preferred;hen = '+ !#e"r !er*s are redeemable at a fi.ed date7 % at theoption of either corporation or stoc holder or both at certainredemption priceRULE / rede*p!"on * + no! 'e * de $#ere !#e corpor !"on"s "nsolven! or ") s&c# rede*p!"on $"ll c &se "nsolvenc+ or"n '"l"!+ o) !#e corpor !"on !o *ee! "!s de'!s s !#e+ * !&re.

COMMISSIONER O4 INTERNAL REVENUE vs. MANNING

A Trust agreement $as entered into because9 ReeseDs desire that Mantrasco andMantrasocDs - subsidiaries to continue under the management of Manning et alupon his JReeseK death

Reese died = Mantrasco paid ReeseDs estate the value of his shares = This shares $as cancelled and a ne$ certificate $as issued in thename of Mantrasco

;hen said purchase price has been full! paid = s# res $#"c# $ere decl red sd"v"dends

5IR issued assessments = failed to declare the said stoc dividends as part of theirta.able income



FF diverting its funds = in fraud of the creditors of the corporation2. 5&' of Sibugue! Trading 4ompan! authori1ed the purchase of ::, shares

of stoc of the corporation FF $hen the! had accounts pa!able to about Php )B

5. declared pa!ment of P:,,, as dividends to stoc holders FF $hen the! had accounts pa!able of about Php 8

Steinberg pra!ed that the &fficers be liable for the amount of the capital stocpurchased and the amount of the dividends paid

The lo$er court dismissed the complained and rendered /udgment in favor of thedefendants*

0ence appeal* In their defense = Grounds9)* the amount represented b! said dividends reall! constitutes a surplus profit

of the corporation-* Since the! have Accounts Receivable amounting to )-

Iss&e:;&N 5oard of 'irectors of Sibugue! could legall! declare a dividend<

Held: NO)* !#ere $ s no s!"p&l !"on s !o !#e c!& l c s# v l&e o) !#ose

cco&n!s.0ence the purchase of its o$n stoc and in declaringdividends = the real assets of the corporation $erediminished b! Php >7:,, # Pa!ment = affect the financialcondition of the corporation (!#e corpor !"on d"d no! # ve !#en n c!& l bona fide s&rpl&s )ro* $#"c# d"v"dends co&ld 'e p "d

- RL6E = The creditors of a corporation have the right to assume that solon% s !#ere re de'!s nd l" '"l"!"es 7 the board of directors of the

corporation $"ll no! &se "!s sse!s !o p&rc# se "!s o$n s!oc( or !odecl re d"v"dends to its stoc holders $hen the corporation is insolvent*

- GR9 It has been said that directors are not liable for losses resulting tothe corporation from $ant of no$ledge on their part or for mista es of

/udgment7 provided the! $ere honest7 and provided the! are fairl! $ithinthe scope of the po$ers and discretion confided to the managing bod!* E.ception9 If the directors of a corporation do acts clearl! be!ond

their po$er7 '+ re son o) $#"c# lossens&ed- or d"spose o) "!s proper!+ $"!#o&!&!#or"!+ = 6IA56E for the loss out of their

private estate

0ALTA1AR vs LINGAYEN GUL4 ELECTRIC PO<ER

6inga!en Gulf = is alleged that it has al$a!s been the practice and procedure of the4orporation to issue certificates of stoc to its individual subscribers for unpaidshares of stoc

5alta1ar subscribed but failed to pa! for the full subscription = corporation issuedcertificates of stoc for his paid share

Annual stoc holders2 meeting $as held = Resolution)* cancelling some stoc s for delin3uenc!-* all unpaid subscription should bear interest annuall! from the !ear of

subscription:* declaring all shares having been declared delin3uent are incapacitated

to vote*

Trial court ruled that all shares covered b! full! paid capital stoc shares = en!"!led!o vo!e "n ll *ee!"n%s o) SH

Iss&es :

;&N S0 $ho has not full! paid his subscription be divested of his voting rights<Held: NOIf a stoc holder in a stoc corporation subscribes to a certain number of shares andma es partial pa!ment for $hich he is issued certificates of stoc 7 he is entitled tovote the latter7 not$ithstanding the fact that he has not paid the balance of hissubscription $hich has been called for pa!ment or declared delin3uent

The ua vs 4un #e3uit! on vote( principle does not come in this case

sec :? #>B( states that No certificate of stoc shall be issued to asubscriber as full! paid up until the full par value thereof% or the full subscription inthe case of no par stock% has been paid by him to the corporation * Subscribed

shares not full! paid up ma! be voted provided no subscription is unpaid anddelin3uent*H

it modified sec :> of the old corporation la$ b! ma ing pa!ment of par valueHasprere3uisite for the issuance of certificates of par value stoc s and ma es pa!mentof full subscription as prere3uisite for issuance of certificates of no"par value stoc s*Stated in another $a!7 !#e presen! l $ re3&"res s cond"!"on 'e)ore s# re#older c n vo!e #"s s# res- !# ! #"s full subscription be paid in the case of no

par value stock; nd "n c se o) s!oc( corpor !"on $"!# p r v l&e- !#es!oc(#older c n vo!e !#e s# res )&ll+ p "d '+ #"* onl+- "rrespec!"ve o) !#e&np "d del"n3&en! s# res.

CHUA GUAN vs SAMAHANG MAGSASA7A

Gon1alo Toco mortgaged his shares to 4hua 4hiu to guarantee the pa!ment of debt

4hua 4hiu assigned all his right and interest in said mortgage to 4hua Guan $asregistered in the

)* office of the register of deeds in the 4it! of Manila-* the office of the said corporation

Toco defaulted = 0EN4E 4hua Guan foreclosed said mortgage

4hua Guan = 0ighest bidder= Sheriff e.ecuted in his favor a certificate of sale of said shares

tendered the certificates of stoc standing in the name of Toco = $ants to9)* have it canceled-* Issue ne$ ones in his name

&fficers RE LSE' = Reason9 prior to the date $hen the 4hua made demands = 8attachments $ere made on the stoc s 9 4hua Refused to have these attachments noted onthe ne$ certificates

Iss&e:;&N registration of said chattel mortgage give constructive notice to the saidattaching creditors<

Held: NO "! $ s "nv l"dT#e re%"s!r !"on o) !#e c# !!el *or!% %e "n !#e o))"ce o) !#e corpor !"on $ sno! necess r+ nd # d no le% l e))ec!.

t$o $a!s for e.ecuting a valid chattel mortgage $hich shall be effective against thirdpersons*

a( the possession of the propert! mortgage must be delivered to andretained b! the mortgagee

b( $ithout such deliver! the mortgage must be recorded in the proper officeor offices of the register or registers of deeds

!#e proper pl ce o) re%"s!r !"on o) s&c# *or!% %ethe chattel mortgage should be registered both at o$ner2s domicile andprincipal office of the 4orporation!#e proper!+ *or!% %ed "s no! !#e cer!")"c !e '&! !#e p r!"c"p !"onnd s# re o) !#e o$ner "n !#e sse!s o) !#e corpor !"on

T0ERE &RE = Registration of chattel mortgage in the office ofcorporation not necessar! and had no legal effect*

ENRI=UE MONSERRAT vs CERON

Enri3ue Monserrat assigned the usufruct of half of his common shares of stoc to4eron

4ondition = prohibiting 4eron from selling7 mortgaging7 encumbering7 or e.ercisingan! act impl!ing absolute o$nership

4eron = mortgaged and endorsed the shares of stoc including MonserratDs sharesto Eduardo Matute

= as pa!ment of his debt

Matute $as not informed of the condition

Tr" l co&r! r&led "n ) vor o) Monserr ! nd decl red !#e *or!% %e n&ll nd vo"d

0ence Matute appealed*

Iss&e:;&N it is necessar! to enter upon the boo s of the corporation a mortgageconstituted on common shares of stoc in order that such mortgage ma! be validand effective against :rd persons<



Held:Sec!"on 5> o) !#e Corpor !"on L $ does no! re3&"re n+ en!r+ e;cep!o) !r ns)ers o) s# res o) s!oc( "n order !# ! s&c# !r ns)ers * + 'e v l"d s% "ns! !#"rd persons

Transfer = to assign or !aive the right in% or absolute o!nership of% athing in favor of another% making him the o!ner thereof # absolute andunconditional conve!ance of the title and o$nership of a share of stoc (c# !!el *or!% %e "s no! !#e !r ns)er re)erred !o "n Corpor !"on l $T0ERE &RE notation upon the boo s of the corporation is notnecessar! re3uisite to its validit!

USON vs ,IOSOMITO

'iosomito sold and delivered his North Electric shares to 5arcelon

Lson sued 'iosomito for a debt and attached the said shares # $ c $ s s!"ll "n,"oso*"!o n *e on !#e 'oo(s o) !#e Corp (

Then 5arcelon presented the certificates for registration = 8 months after theattachment had been levied :

Trial 4ourt ruled in favor of Lson = 0ence the Shares $ere foreclosed

Lson $as the highest bidder

5arcelon sold the same to 0*P*6* Qoll!e = f iles and action in court

The lo$er court ruled for Lson*

Issue9;&N a bona fide transfer of the shares of a corporation7 not registered or noted onthe boo s of the corporation7 is valid as against a subse3uent la$ful attachment ofsaid shares7 re% rdless o) $#e!#er !#e !! c#"n% cred"!or # d c!& l no!"ce o)s "d !r ns)er or no! <

Held: NO ?no !r ns)er- #o$ever- s# ll 'e v l"d e;cep! s 'e!$een !#e p r!"es- &n!"l !#e!r ns)er "s en!ered nd no!ed &pon !#e 'oo(s o) !#e corpor !"on.@

right of the o$ner of the shares of stoc to transfer the same b! deliver!= l"*"!ed nd res!r"c!ed '+ !#e l $Therefore7 the transfer from 'iosomito to 5arcelon $as not valid as toLsonReason = s"nce ! !#e !"*e "! $ s !! c#ed- !#e s# res s!"ll s!ood "n!#e n *e o) ,"oso*"!o on !#e 'oo(s o) !#e corpor !"on

R !" # an attachment lien prevails over a prior unregistered bona fide stocktransfer$

ESCA O vs 4ILIPINAS MINING CORPORATION

The 4 I of Manila ordered Salvosa to transfer and deliver to Escano shares of theilipinas Mining 4orp*

The escro$ ho$ever $as onl! to be transferred upon its release b! the said4ompan!*

'espite the said order = Salvosa $as able to sell the shares to 5eng1on

5eng1on thereafter sold the shares to Standard Investment

ilipinas Mining thereafter issued certificates of shares of stoc to StandardInvestment FF despite the fact that the sales and transfers from Salvosa to 5eng1on7 5eng1on

to Standard7 $ere not recorded in the corporate boo s until : !ears after thesaid shares $ere attached b! garnishment*

Iss&e: ;hether the issuance of the certificate of shares of stoc b! ilipinas Miningto Standard Investment $as valid as against the attaching creditor of the saidshares<

Held: No. )* !r ns)er needs !o 'e recorded "n !#e corpor !e 'oo(s !o 'e e))ec!"ve

s % "ns! 5 rd persons This recording is re3uiredreasons9

)( to no$ $ho the real o$ner of the shares-( gives the corporation a chance to ob/ect to such transfer =

against an! claims it ma! have on the stoc:( to avoid fictitious and fraudulent transfers

RULE / T#ere "s no v l"d re son !o !re ! &n"ss&ed s# res #eld "n escro$d"))eren!l+ )ro* !#e "ss&ed s# res "nso) r s !#e"r s le nd !r ns)er reconcerned.

Supplementary NotesNo Registration of Transfer of Lnpaid Shares

o The shares are thus not transferable on the corporate boo so there is nothing to prevent the stoc holder from transferring his

interest in the corporation b! $a! of a deed of assignmento unpaid claimH of section >: = does not necessaril! mean that

there should have been a previous call b! the board ofdirectors

o As long as portion remains unpaid

Remed! if Registration Refusedo action to enforce the right does not accrue until there has been

a demand and a refusal to record the transfer o $rongfull! refuse = Petition for Mandamus

PONCE vs ALSONS CEMENT CORPORATION

Ponce and Gaid e.ecuted a 'eed of Lnderta ingH = endorsing the shares ofictor! 4ement 4orporation to Ponce

44 $as renamed loro 4ement 4orporation # 44( and then to Alsons 4ement4orporation #A44(

Lntil No$ = no stoc issued in the name of Gaid

Ponce iled a Petition for Mandamus = Grounds9 FF 'espite repeated demands = the A44 refused $ithout an! /ustifiable reason toissue the stoc s

A44 moved to dismiss*

SE4 dismissed the case* SE4 En 5anc reversed the decision*

A44 appeal to 4A* Reversed the decision = Grounds9)* The transfer of the shares bet$een Gaid and Ponce $as N&T registered

in the stoc and transfer boo of A44-* Ponce has no cause of action*

ISSUE:;&N the cert* of stoc s of Gaid can be transferred to Ponce

Held: NO)* Ponce had not made a previous re3uest upon to record the alleged transfer

of stoc s*RULE / !r ns)er o) s# res o) s!oc( no! recorded "n !#es!oc( nd !r ns)er 'oo( o) !#e corpor !"on "s non6e;"s!en! s) r s !#e corpor !"on "s concerned.the corporation loo s onl! to its boo s for the purpose of

determining $ho its shareholders areLP&N RE4&R' = rightfull! regard the transferee as one of itsstoc holders$"!#o&! s&c# record"n% / * + le% ll+ re)&se !#e "ss& nce o)s!oc( cer!")"c !es "n !#e n *e o) !#e !r ns)eree

-* mere indorsement of stoc certificates does not in itself give to the indorseesuch a right to have a transfer of the shares of stoc on the boo s of thecompan!

GR: * nd *&s s#o&ld no! "ss&e !o co*pel !#e secre! r+ o) corpor !"on !o * (e !r ns)er o) !#e s!oc( on !#e 'oo(s o) !#eco*p n+

Exception: it affirmatively appears that he has failed orrefused so to do% upon the demand either of the person in !hose name the stock isregistered% or of some person holding a

po!er of attorney for that purpose fromthe registered o!ner of the stock.

:* mandamus " proper remed! to ma e him the rightful o$ner and holder of astoc certificate to be issued in his name



TAN v. SEC

Alfonso = o$ner of B,, shares of the capital stoc # evidenced b! certificate number - ( = elected as President

oung and &ng # incorporators ( = $ithdre$ b! assigning to the corp* their shares

Tan2s certificate of stoc $as cancelled b! virtue of a resolution = made ne$ stoc scertificate for Alfonso and Angel

Tan sold #+,( shares out of his capital stoc to Angel = in order to complete the

'irectors

Alfonso S* Tan $as given bac Stoc 4ertificate = for him to endorse nd #edel"'er !el+ $"!##eld "! )or re sons o) #"s o$n FF so as if no deliver!

Tan $as dislodged from his position as president = ; IT0'RE;

5&' had a meeting = effecting the cancellation of Stoc 4ertificate of Alfonso

Alfonso S* Tan filed the SE4 case 3uestioning the cancellation of his stoc s

ISSUE:;&N transfer is valid $%o deliver!<

Held: YESSec!"on B5 o) !#e Corpor !"on Code o) !#e P#"l"pp"nes "s NOT 8* nd !or+ "nn !&re8

acts = there $as alread! deliver! of the unendorsed Stoc

4ertificate No* - = return of the cancelled certificate and 'eliberate non"indorsement5ut deliver! is not essential $here it appears that the persons soughtto be held as stoc holders are officers of the corporation7 and havethe custod! of the stoc boo

T#e cer!")"c !e "s no! s!oc( "n !#e corpor !"on '&! "s *erel+ ev"dence o) !#e#older s "n!eres! nd s! !&s "n !#e corpor !"on

&nl! representation of his e3uit! = but is not in la$ the e3uivalent ofsuch o$nershipe.presses the contract = but is not essential to the e.istence of ashare in stoc

cer!")"c !e o) s!oc( "s no! ne%o!" 'le "ns!r&*en!sometime regarded as 3uasi"negotiable = transferred b!endorsement7 coupled $ith deliver!non"negotiable = #older !#ereo) ! (es "! $"!#o&! preD&d"ce !o s&c#r"%#!s or de)enses s !#e re%"s!ered o$ner s or !r ns)error scred"!or * + # ve &nder !#e l $- e;cep! "nso) r s s&c# r"%#!sor de)enses re s&'Dec! !o !#e l"*"! !"ons "*posed '+ !#epr"nc"ples %overn"n% es!oppels

HAGER vs 0RYAN

0ager filed a $rit of mandamus against the 5r!an # 4orp Sec ( = to compel him totransfer upon the boo s of the compan! certain shares of stoc S&6' T& 0IM 56E ERING

certificates $ere issued in the name of 5r!an"6ondon 4o* and b! them indorsedto !our petitioner

5r!an refused to transfer stoc s and filed a demurrer

Iss&e:;&N a $rit of mandamus is proper in this case<

Held: NO)* No s# re o) s!oc( % "ns! $#"c# !#e corpor !"on holds any unpaid

claim - s# ll 'e !r ns)er 'le on !#e 'oo(s o) !#e corpor !"on.To issue the $rit = re3uire an officer to transfer stoc &ndercond"!"ons $#ere !#e l $ e;pressl+ pro#"'"!ed s&c#!r ns)er The $rit of mandamus $ill never issue to compel a person toviolate an e.press provision of the la$

-* <r"! $"ll no! ord"n r"l+ "ss&e ") !#e pl "n!")) # s o!#er re*ed"escorporation improperl! refuses to transfer = clearl! liable for the damages

0 !on% 0&# + vs. CA

5atong 5uha! issued Stoc s to rancisco Aguac

rancisco Aguac sold his shares to of the Incoporated Mining 4orporation $%ono$ledge of his $ife Paula

Paula re3uested 5atong 5uha! to $ithhold the transfer of the shares = 5EING A4&NQLGA6 PR&PERT proceeds $ere not given to her

A criminal case $as filed against Aguac

Incoporated Mining2s counsel presented the certificate for registration for transfer tohis name

5atong buha! refused to transfer = Reason = that the! might he held liable fordamages

Petitioner pra!ed for preliminar! mandator! in/unction = Granted5LT = appealed because lo$er court2s alleged failure to a$ard damages for the$rongful refusal of petitioner to transfer

Not Granted* 0ence Appeal*

Iss&e:;&N 4ourt of Appeals a$ard damages b! $a! of unreali1ed profits despite theabsence of supporting evidence<

Held: NOStipulation of facts of the parties = # ( sho$ intent to sell on specific datesTrue that stoc s ma! rise and fall$# !ever pro)"!s co&ld # ve 'een * de re p&rel+ SPECULATIVERULE / spec&l !"ve d * %es c nno! 'e recovered

corpo digest 9

Documents