This document summarizes a court case regarding a dispute over shares of stock. The petitioner claimed ownership of 239,500 shares originally held by Fausto Gaid based on a deed and indorsement transferring the shares. However, the transfer was never recorded in the corporation's stock and transfer book. The Court of Appeals dismissed the case, holding that without registering the transfer, the petitioner failed to establish a cause of action against the corporation. The Supreme Court affirmed, finding no legal duty for the corporation to issue new certificates without the transfer being properly recorded.
This document summarizes a court case regarding a dispute over shares of stock. The petitioner claimed ownership of 239,500 shares originally held by Fausto Gaid based on a deed and indorsement transferring the shares. However, the transfer was never recorded in the corporation's stock and transfer book. The Court of Appeals dismissed the case, holding that without registering the transfer, the petitioner failed to establish a cause of action against the corporation. The Supreme Court affirmed, finding no legal duty for the corporation to issue new certificates without the transfer being properly recorded.
This document summarizes a court case regarding a dispute over shares of stock. The petitioner claimed ownership of 239,500 shares originally held by Fausto Gaid based on a deed and indorsement transferring the shares. However, the transfer was never recorded in the corporation's stock and transfer book. The Court of Appeals dismissed the case, holding that without registering the transfer, the petitioner failed to establish a cause of action against the corporation. The Supreme Court affirmed, finding no legal duty for the corporation to issue new certificates without the transfer being properly recorded.
VICENTE C. PONCE, petitioner, vs. ALSONS CEMENT CORPORATION, and FRANCISCO M. GIRON, JR., respondents. Facts:The late Fausto G. Gaid was an incorporator of Victory Cement Corporation (VCC), having subscribed to and fully paid 239,500 shares of said corporation. Plaintiff Vicente Ponce and Fausto Gaid executed a "Deed of Undertaking" and "Indorsement" whereby the latter acknowledges that the former is the owner of said shares and he was therefore assigning/endorsing the same to the plaintiff. VCC was renamed Floro Cement Corporation (FCC for brevity). Later on FCC was renamed Alsons Cement Corporation (ACC for brevity) as shown by the Amended Articles of Incorporation of ACC. No certificates of stock corresponding to the 239,500 subscribed and fully paid shares of Gaid were issued in the name of Fausto G. Gaid and/or the plaintiff. The defendants refused and continue to refuse without any justifiable reason to issue to plaintiff the certificates of stocks corresponding to the shares of Gaid, in violation of plaintiff’s right to secure the corresponding certificate of stock in his name. Petitioner prayed that judgment be rendered ordering respondents (a) to issue in his name certificates of stocks covering the 239,500 shares of stocks and its legal increments and (b) to pay him damages. Respondents moved to dismiss the complaint. They argued, inter alia, that there being no allegation that the alleged "INDORSEMENT" was recorded in the books of the corporation, said indorsement by Gaid to the plaintiff of the shares of stock in question—assuming that the indorsement was in fact a transfer of stocks—was not valid against third persons such as ALSONS under Section 63 of the Corporation Code. There was, therefore, no specific legal duty on the part of the respondents to issue the corresponding certificates of stock, and mandamus will not lie. SEC Hearing Officer Enrique L. Flores, Jr. granted the motion to dismiss.The Commission En Banc reversed the appealed Order and directed the Hearing Officer to proceed with the case. The Court of Appeals held that in the absence of any allegation that the transfer of the shares between Fausto Gaid and Vicente C. Ponce was registered in the stock and transfer book of ALSONS, Ponce failed to state a cause of action. Thus, CA dismissed the complaint for mandamus. Issue: Whether or not the Court of Appeals erred in holding that herein petitioner has no cause of action for a writ of mandamus? Ruling:No. SEC. 63. Certificate of stock and transfer of shares.–The capital stock of stock corporations shall be divided into shares for which certificates signed by the president or vice-president, countersigned by the secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance with the by-laws. Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner or his attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation so as to show the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates and the number of shares transferred. No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation. The stock and transfer book is the basis for ascertaining the persons entitled to the rights and subject to the liabilities of a stockholder Where a transferee is not yet recognized as a stockholder, the corporation is under no specific legal duty to issue stock certificates in the transferee’s name. In a case such as that at bar, a mandamus should not issue to compel the secretary of a corporation to make a transfer of the stock on the books of the company Unless it affirmatively appears that he has failed or refused so to do, upon the demand either of the person in whose name the stock is registered, or of some person holding a power of attorney for that purpose from the registered owner of the stock. Mereindorsee of a stock certificate, claiming to be the owner, will not necessarily be recognized as such by the corporation and its officers, in the absence of express instructions of the registered owner to make such transfer to the indorsee, or a power of attorney authorizing such transfer Mandamus - proper remedy to make him the rightful owner and holder of a stock certificate to be issued in his name