Delos Santos v Astraquillo

Facts:
1. In question are the stocks of Madrigal.
2. Madrigals stocks cover 55,000 shares endorsed in
blank
3. Possession was lost between 1945-1946
4. Meanwhile plaintiff bought 500,000 shares from
capos, 1,100,000 shares from carl hess.
5. At the time of sale, theses stocks were with alien
property custodian
6. Plaintiff applied for custody. It was granted and then
later reversed.
7. Hence, they file action to establish title to the stocks
(spec pro)
8. Defendants Story: Prior to the war, the stocks were
bought by Madrigal in trust for Mitsui.
9. Madrigal endorsed the stocks to Mitsui but were
lost, hence whoever has it looted it or got it illegally.
10. CFI: transfer of certificates to alien property
custodian null and void
11. Hence, petitioner filed this case.

Issue1: WON, plaintiffs own the shares

Defendants insist that they never sold the shares to Madrigal
Lednicky testified seeing certificates in the name of Japanese
and another of madrigal

Held:
A - No, they do not own the shares.
L - Sec 35, Act 1459 state that no transfer shall be
valid, except as between the parties, until transfer is entered
and noted upon the books of the corporation.
A - In the case at bar, the certificates were still under
the name of Madrigal and the Mitsui.
- The supposed sellers were already dead and thus
could not corroborate the sale.
- The conditions during the war made it impossible
for the Japanese to sell the certificates.
C - Hence, since the certificates were not transferred
in the name of petitioner, the alleged sale is null and void.

Issue2: WON, shares of stocks are negotiable instruments,
transferrable when endorsed in blank.

Hel:
A - No.
L - Sec 35, Art 1459
A - In the case at bar, the transfer lacked registration.
- certificates of stock are quasi negotiable in that it
requires endorsement and delivery and requires recording in
the books.
C - Hence, transfer not valid.

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Tan v Sec

Facts:
1. Petitioner had 400 shares with stock certificate no.
2.
2. He became president of the corporation.
3. While president, 2 incorporators assigned their
shares to the corporation.
4. Hence, stock cert no. 2 was cancelled via resolution.
5. In order to complete the membership of the 5
directors, because two withdrew, petitioner sold 50
shares to his brother Angel Tan.
6. Due to sale of 50 shares, cert 2 was cancelled and
certificates 6 and 8 were issued.
7. However, petitioner did not return his certificate no.
2.
8. After he was removed as president and much more
years after the sale of the certificate, he now
questions its sale. His contention is that he was
deprived of his shares in that there was non
endorsement or surrender of the certificates.
9. SEC ruling: cancellation of certificate no. are null and
void.
10. SEC en banc, overturned the division ruling.

Issue: WON, there was delivery of Stock Certificate no. 2
despite holding it and not signing its endorsement.

Held:
A - Yes, there was.
L - Sec 63, Corporation Code
- La Porvisora Filipinos Case: Delivery is not essential
where it appears that the persons sought to be held as
stockholders are officer of the corporation and have custody
of the stock.
- A certificate of stock is not necessary to render one
holder in a corporation.
A - in the case at bar, there were already two proofs
that Cert 2 was already split into two: Cert 6 and Cert 8, the
fact that petitioner surrendered the stock Cert 8 in lie of
2million pesos.
- it was obvious that petitioner devised the scheme
of not returning the cancelled stock certificate to skim off the
largesse of the corporation.

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Bitong v CA

1. Petitioner filed a derivative suit against respondents
Manotoc, Apostol regarding the mismanagement of
PDI.
2. Petitioner prays that the respondents be enjoined
from further acting as president-director of MR an
Ms., enjoined from disposing pdi shares, compel
respondents to account and reconvey shares; hold
respondents liable, appoint a management
committee; direct management to file to enforce its
rights against PDI.
3. Respondents deny allegations of petitioner and state
that petitioner is not the real party in interest; that
petitioner is not the owners of shares ofstock with
Mr and Ms.
4. Petitioner asserts that she is a party in interest, that
the stocks according to the books are actually under
her name.
5. Respondents aver that As per accounts of Enrile,
Enrile thru JAKA assigned in trust his rights to the
share to Apostol and there was evidence to this.
6. Petitioner failed to contradict this evidence and at
one point admitted that Enrile was her principal.
7. How the stock certificates turned out to be in the
name of petitioner is unclear but what is certain is
that she was the Chief Executive Officer at a certain
point and that at one time she was the one who held
the record books.
8. It was also alleged that enrile signed the transfer
certificates in 1989 but that petitioner ante dated it
to 1983.

Issue: WON, petitioner is a bona fide stockholder since the
record books says so.

Held:
A - No.
L - Sec 63 of Corp Code
- Only Prima Facie Evidence
- Oral testimony may be admitted to contradict
- Requirements for a valid transfer (mandatory):
1 delivery (operative act)
2 endorsement
3 recorded in books to be valid against 3
rd

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Santamaria v HSBC

Facts:
1. Santamaria purchased 10,000 shares from Woo, Uy-
Tico
2. A certificate in blank was endorsed to santamaria.
3. Santamaria purchased 10,000 shares with Crown
Mines thru RJ campos, a brokerage.
4. She endorsed the same certificate still in blank,
redeemable when santamaria already had the
10,000 pesos.
5. It turned out that RJ deposited the certificate to
HSBC in blank.
6. HSBC assigned it to one of its officers, Taplin.
7. Santamaria went back to RJ Campos with 10k but
was advised that the cert was already with HSBC
8. Santamaria filed criminal charges against RJ and then
filed for collection against HSBC.
9. The defense of HSBC was that petitioner was
negligent in not demanding that a new stock
certificate be created under her name.

Issue: WON, petitioner negligent.
Held:
A - Yes.
L - Street Certificate. A certificate endorsed in blank
with a name of the owner at the right side is a street
certificate. The owner of such blank certificate has the right
to have it cancelled and a new one under her name.
- The bank is not obliged to go beyond the blank
certificate.
A - In the case at bar, petitioner failed to demand a
new stock certificate.
- But RJ was still liable for estafa.

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Neugene v CA

Facts:
1. Neugene is a corporation with 5 incorporators: Lee,
Suen, Sy, Flores Jr and Yang Jr.
2. Flores Jr decided to sell his shares to Moreno, Yang
and Sy.
3. Sy, Yang and Sen as holders of 2/3 of the total stocks
decided to dissolve the corporation and this was
approved.
4. Later on, petitioners question the dissolution in that
the respondents were no longer majority
stockholders during the meeting.
5. They allege that the private respondents have
divested their rights to the stockholdings when they
endorsed their stock certificates in blank and
delivered the same to the Uy family., the BENEFICAL
owners of Neugene.
6. It is alleged that Uy authorized Lee to dispose the
same and that Lee sold the said shares to an and
Martin as reflected in the Stock and Transfer Books.
7. Private respondents claim that there was never any
agreement to authorize the Uys to sell the stocks
since this was only in trust. They claim that fraud
was committed in the indorsement.
8. SEC ruled in favor of petitioner
9. CA rled in favor of respondents.

Issue: WON, dissolution was invalid in that the respondents
were no longer majority stockholders at the meeting due to
the alleged transfer of shares.

Held:
A - Petition without merit.
L - The Certificates were transferred fradlently by
stealing the blank certificates and endorsing it.

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Torres, Jr v CA (supra)

Facts:
1. Judge Torres created a corporation.
2. Due to insufficiency of number of stocks and the
refusal of the respondents to increase the needed
stocks, Torres unilaterally caused the transfer of
stocks to his assignee.
3. Torres kept the books in that why would he request
the transfer from the secretary who was one of
those against him.
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China banking v Ca, VGCCI

Facts:
1. Calapatia was a shareholder of VGCCI
2. He entered into a pledge with Chinabanking Corp for
present and future loans.
3. Chinabank advised VGCCI to annotate the pledge
4. VGCCI obliged.
5. Upon nonpayment of petitioner, chinbank auctioned
the stocks and reqested VGCCI to record its new
ownership of the stocks.
6. VGCCI refused invoking sec 63 in that Calapatia still
owed monthly dues.
Issue: WON, transfer was valid and shares considered fully
paid.

Held:
A - Yes.
L - Sec 63 when it stated fully paid referred to
subscription, not to any other dues.

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Unson v Diosomito

Facts:
1. Unson filed a civil action for collection against
respdeondent in 1932.
2. Unson was able to attachd 75 shares of stock of
Diosomito.
3. This was opposed by HPL Jollye who claimed
ownership of such thrs cert issed in 1993.
4. It turned out that Diosomito sold the shares to
barcelon and delivered the certificate on Febrary
1931.
5. But barcelon did not present these certificates to the
corporation for registration until 16 of Sep 1932 or 8
months after it was attached.
6. Barcelon was a buy in good faith.

Issue: WON Barcelon was deemed to have fully paid before
the attachment.

Held:
A - No.
L - Sec 63 of the corporation code state that to be fully
paid, the stocks must be registered.
- A valid attachment will prevail over an unregistered
sale of shares of stock, even in good faith.
A - In the cae at bar, Barcelon bought the shares in
good faith more than 11 months before the attachment but
only registered it 9 months after the attachment.

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Escano v Filipinas Mining

Even shares held in escrow but nregistered are covered by
the doctrine in Unson v Dosimito

Facts:

1. Antonio eScano had 116 shares with Filipinas
Mining.
2. Savlosa soght to enforce collection for some of mony
from Escano and so the court attached the shares of
Escano in 1937.
3. Judgement was rendered in 1936.
4. After the attachment, Escano sold his shares to
Bengzon.
5. Bengzon sold it to Standard Investment of the Phil.
6. It was only in 1940 that the certificates were
registered.
7. In 1941, Standard Issued certificates in favor of
Standard Investment.

Issue: WON, petitioner had better right over the stocks.

Held: Yes.

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Razon v IAC

Facts:

1. Razon created a corporation E Razon Inc to be able
to be able to bid to the arrastre services of south
harbor.
2. However, some incorporators withdrew and so he
gave some 1500 shares to his friend Chuidian,
allegedly as nominal stockholder.
3. Chuidian thus delivered these certificates to Razon
who held such eversince.
4. However, when Chidian died, his heirs claim right to
the certificates.
5. Petitioner insist ownership to the certificate as well
as all incidental profits to it that accrued.

Issue: WON Chuidian owned the certificates

Held:
A - Yes
L - Sec 35 is clear that it requires indorsment
A - Case at bar, no indorsement
- excuse of defendant that no indorsement was
needed since they were friends cannot overcome the failure
to follow the law

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Hager v Bryan

Facts:
1. Petitioner claims that Visayan Electric hold no
unpaid claim to the shares of stock with Hager and
that Hager does not owe anything to Visayan
Electric.
2. Hager wants to comple the corporation to transfer
the certificates under his name.
3. Petitioner files for Mandamus.

Issue: WON mandamus is the proper remedy in the case at
bar.

Held:
A - No.
L - Mandamus will lieif the ff are present:
1. due application was made
2. no unpaid claims agains the corporation for
damages
3. an ordinary action against the corporation for
damages would be inadequate
4. an action in the nature of a suit in equity is
inadequate.
A - petitioner is not the owner of the certificates

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