TRANSFER OF SHARES

 Uson vs. Diomosoto, 61 Phil 535

 Escano vs. Filipinas Mining Corporation, 74 Phil 711
 Rivera vs. Florendo, 144 SCRA 647
 Nautica Canning Corp. vs. Yumol, 473 SCRA 415
 Razon vs. IAC, 207 SCRA 235, 207 SCRA 234
 Rural Bank of Salinas vs. CA 210 SCRA 511
 Santamaria vs. HSBC, 89 Phil 472
 Makati Sports Club, Inc. vs. Cheng, 621 SCRA 103
 Bitong vs. CA 292 SCRA 503
 Torres vs. CA 278 SCRA 793
 SME Bank, Inc. vs. De Guzman, 707 SCRA 242
 AQUILINO RIVERA, ISAMU AKASAKO, FUJIYAMA HOTEL & RESTAURANT, INC.
vs.
THE HON. ALFREDO C. FLORENDO, as Judge of the Court of First Instance of
Manila (Branch XXXVI), LOURDES JUREIDINI and MILAGROS TSUCHIYA
G.R. No. L-57586. October 8, 1986

FACT:

Petitioner corporation was organized and register under Philippine laws with a
capital stock of P1,000,000.00 divided into 10,000 shares of P100.00 par value each
by the herein petitioner Rivera and four (4) other incorporators. Sometime thereafter
petitioner Rivera increased his subscription from the original 1,250 to a total of 4899
shares.
Subsequently, Isamu Akasako, a Japanese national and co-petitioner who is
allegedly the real owner of the shares of stock in the name of petitioner Aquilino
Rivera, sold 2550 shares of the same to private respondent Milagros Tsuchiya for a
consideration of P440,000.00 with the assurance that Milagros Tsuchiya will be made
the President and Lourdes Jureidini a director after the purchase. Aquilino Rivera who
was in Japan also assured private respondents by overseas call that he will sign the
stock certificates because Isamu Akasako is the real owner. However, after the sale
was consummated and the consideration was paid with a receipt of payment therefor
shown, Aquilino Rivera refused to make the indorsement unless he is also paid.

ISSUE:

Whether or not the respondent court of first instance have no jurisdiction over
the petition for mandamus and receivership "as well as in placing the corporate assets
under provisional receivership in the guise of a writ of preliminary mandatory
injunction.

RULING:

YES.

It has already been settled that an intracorporate controversy would call for the
jurisdiction of the Securities and Exchange Commission. On the other hand, an intra-
corporate controversy has been defined as "one which arises between a stockholder
and the corporate. There is no distinction, qualification, nor any exemption
whatsoever."
This Court has also ruled that cases of private respondents who are not
shareholders of the corporation, cannot be a "controversy arising out of intracorporate
or partnership relations between and among stockholders, members or associates;
between any or all of them and the corporation, partnership or association, of which
they are stockholders, members or associates, respectively."
 ENRIQUE RAZON
vs.
INTERMEDIATE APPELLATE COURT and VICENTE B. CHUIDIAN, in his capacity
as Administrator of the Estate of the Deceased JUAN T. CHUIDIAN
G.R. No. 74306 March 16, 1992

FACTS:

In his complaint filed on June 29, 1971, and amended on November 16, 1971,
Vicente B. Chuidian prayed that defendants Enrique B. Razon, E. Razon, Inc.,
Geronimo Velasco, Francisco de Borja, Jose Francisco, Alfredo B. de Leon, Jr., Gabriel
Llamas and Luis M. de Razon be ordered to deliver certificates of stocks representing
the shareholdings of the deceased Juan T. Chuidian in the E. Razon, Inc. with a
prayer for an order to restrain the defendants from disposing of the said shares of
stock, for a writ of preliminary attachment v. properties of defendants having
possession of shares of stock and for receivership of the properties of defendant
corporation.
In their answer filed on June 18, 1973, defendants alleged that all the shares of
stock in the name of stockholders of record of the corporation were fully paid for by
defendant, Razon; that said shares are subject to the agreement between defendants
and incorporators; that the shares of stock were actually owned and remained in the
possession of Razon. Appellees also alleged . . . that neither the late Juan T. Chuidian
nor the appellant had paid any amount whatsoever for the 1,500 shares of stock in
question

ISSUE:

Whether or not petitioner have right over the ownership of the 1,500 shares of
stock in E. Razon, Inc.

RULING:

NO.

In the instant case, there is no dispute that the questioned 1,500 shares of
stock of E. Razon, Inc. are in the name of the late Juan Chuidian in the books of the
corporation. Moreover, the records show that during his lifetime Chuidian was ellected
member of the Board of Directors of the corporation which clearly shows that he was a
stockholder of the corporation. From the point of view of the corporation, therefore,
Chuidian was the owner of the 1,500 shares of stock. In such a case, the petitioner
who claims ownership over the questioned shares of stock must show that the same
were transferred to him by proving that all the requirements for the effective transfer
of shares of stock in accordance with the corporation's by laws, if any, were followed or
in accordance with the provisions of law.
The petitioner failed in both instances. The petitioner did not present any by-
laws which could show that the 1,500 shares of stock were effectively transferred to
him. In the absence of the corporation's by-laws or rules governing effective transfer of
shares of stock, the provisions of the Corporation Law are made applicable to the
instant case.
The law is clear that in order for a transfer of stock certificate to be effective, the
certificate must be properly indorsed and that title to such certificate of stock is vested
in the transferee by the delivery of the duly indorsed certificate of stock. Since the
certificate of stock covering the questioned 1,500 shares of stock registered in the
name of the late Juan Chuidian was never indorsed to the petitioner, the inevitable
conclusion is that the questioned shares of stock belong to Chuidian. The petitioner's
asseveration that he did not require an indorsement of the certificate of stock in view
of his intimate friendship with the late Juan Chuidian cannot overcome the failure to
follow the procedure required by law or the proper conduct of business even among
friends. To reiterate, indorsement of the certificate of stock is a mandatory.
 RURAL BANK OF SALINAS, INC., MANUEL SALUD, LUZVIMINDA TRIAS and
FRANCISCO TRIAS
vs.
COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION, MELANIA A.
GUERRERO, LUZ ANDICO, WILHEMINA G. ROSALES, FRANCISCO M. GUERRERO,
JR., and FRANCISCO GUERRERO, SR.
G.R. No. 96674, June 26, 1992

FACTS:

Clemente G. Guerrero, President of the Rural Bank of Salinas, Inc., executed

a Special Power of Attorney in favor of his wife, private respondent Melania Guerrero,
giving and granting the latter full power and authority to sell or otherwise dispose of
and/or mortgage 473 shares of stock of the Bank registered in his name (represented
by the Bank's stock certificates nos. 26, 49 and 65), to execute the proper documents
therefor, and to receive and sign receipts for the dispositions. On February 27, 1980,
and pursuant to said Special Power of Attorney, private respondent Melania Guerrero,
as Attorney-in-Fact, executed a Deed of Assignment for 472 shares out of the 473
shares, in favor of private respondents Luz Andico (457 shares), Wilhelmina Rosales
(10 shares) and Francisco Guerrero, Jr. (5 shares).Almost four months later, or two (2)
days before the death of Clemente Guerrero on June 24, 1980, private respondent
Melania Guerrero, pursuant to the same Special Power of Attorney, executed a Deed of
Assignmentfor the remaining one (1) share of stock in favor of private respondent
Francisco Guerrero, Sr.
Subsequently, private respondent Melania Guerrero presented to petitioner
Rural Bank of Salinas the two (2) Deeds of Assignment for registration with a request
for the transfer in the Bank's stock and transfer book of the 473 shares of stock so
assigned, the cancellation of stock certificates in the name of Clemente G. Guerrero,
and the issuance of new stock certificates covering the transferred shares of stocks in
the name of the new owners thereof. However, petitioner Bank denied the request of
respondent Melania Guerrero.

ISSUE:

Whether or not a Mandamus lie against the Rural Bank of Salinas to register in
its stock and transfer book the transfer of 473 shares of stock to private respondents.

RULING:

YES.

Section 5 (b) of P.D. No. 902-A grants to the SEC the original and exclusive
jurisdiction to hear and decide cases involving intracorporate controversies. An intra-
corporate controversy has been defined as one which arises between a stockholder and
the corporation. There is neither distinction, qualification, nor any exception
whatsoever. The case at bar involves shares of stock, their registration, cancellation
and issuances thereof by petitioner Rural Bank of Salinas. It is therefore within the
power of respondent SEC to adjudicate.
A corporation, either by its board, its by-laws, or the act of its officers, cannot
create restrictions in stock transfers, because: Restrictions in the traffic of stock must
have their source in legislative enactment, as the corporation itself cannot create such
impediment. By-laws are intended merely for the protection of the corporation, and
prescribe regulation, not restriction; they are always subject to the charter of the
corporation. The corporation, in the absence of such power, cannot ordinarily inquire
into or pass upon the legality of the transactions by which its stock passes from one
person to another, nor can it question the consideration upon which a sale is based.
Whenever a corporation refuses to transfer and register stock in cases like the
present, mandamus will lie to compel the officers of the corporation to transfer said
stock in the books of the corporation.
 JOSEFA SANTAMARIA, assisted by her husband, FRANCISCO SANTAMARIA, Jr.
vs.
THE HONGKONG AND SHANGHAI BANKING CORPORATION and R. W. TAPLIN.
G.R. No. L-2808 August 31, 1951

FACTS:

Mrs. Josefa T. Santamaria bought 10,000 shares of the Batangas Minerals,

Inc., through the offices of Woo, Uy-Tioco & Naftaly, a stock brokerage firm and pay
therefore the sum of P8,041.20 as shown by receipt Exh. B. The buyer received Stock
Certificate No. 517 issued in the name of Woo, Uy-Tioco & Naftaly and indorsed in
bank by this firm.
On March 9, 1937, Mrs. Santamaria placed an order for the purchase of 10,000
shares of the Crown Mines, Inc. with R.J. Campos & Co., a brokerage firm, and
delivered Certificate No. 517 to the latter as security therefor with the understanding
that said certificate would be returned to her upon payment of the 10,000 Crown
Mines, Inc. shares. Exh. D. is the receipt of the certificate in question signed by one
Mr. Cosculluela, Manager of the R.J. Campos & Co., Inc. According to certificate Exh.
E, R. J. Campos & Co., Inc. bought for Mrs. Josefa Santamaria 10,000 shares of the
Crown Mines, Inc. at .225 a share, or the total amount of P2,250. Two days later, on
March 11, Mrs. Santamaria went to R.J. Campos & Co., Inc. to pay for her order of
10,000 Crown Mines shares and to get back Certificate No. 517. Cosculluela then
informed her that R.J. Campos & Co., Inc. was no longer allowed to transact business
due to a prohibition order from Securities and Exchange Commission. She was also
informed that her Stock certificate was in the possession of the Hongkong and
Shanghai Banking Corporation.

ISSUE:

Whether or not the obligation of the defendant Bank to have inquired into the
ownership of the certificate when it received it from R.J. Campos & Co., Inc. and not
conclude that the Bank was negligent for not having done so, contrary to the claim of
the plaintiff that defendant Bank acted negligently, if not in bad faith, in accepting
delivery of said certificate from RJ. Campos & Co., Inc.

RULING:

YES.

Certificate No. 517 came into the possession of the defendant Bank because
R.J. Campos & Co., Inc. had opened an overdraft account with said Bank and to this
effect it had executed on April 16, 1946, a letter of hypothecation by the terms of
which R.J. Campos & Co., Inc. pledged to the said Bank "all Stocks, Shares and
Securities which I/we may hereafter come into their possession on my/our account
and whether originally deposited for safe custody only or for any other purpose
whatever or which may hereafter be deposited by me/us in lieu of or in addition to the
Stocks, Shares, and Securities now deposited or for any other purpose whatsoever."
It should be noted that the certificate of stock in question was issued in the
name of the brokerage firm-Woo, Uy-Tioco & Naftaly and that it was duly indorsed in
blank by said firm, and that said indorsement was guaranteed by R.J. Campos & Co.,
Inc., which in turn indorsed it in blank. This certificate is what it is known as street
certificate. Upon its face, the holder was entitled to demand its transfer into his name
from the issuing corporation. The Bank was not obligated to look beyond the
certificate to ascertain the ownership of the stock at the time it received the same from
R.J. Campos & Co., Inc., for it was given to the Bank pursuant to their letter of
hypothecation. Even if said certificate had been in the name of the plaintiff but
indorsed in blank, the Bank would still have been justified in believing that R.J.
Campos & Co., Inc. had title thereto for the reason that it is a well-known practice that
a certificate of stock, indorsed in blank, is deemed quasi negotiable, and as such the
transferee thereof is justified in believing that it belongs to the holder and transferor.

Makati Sports Club Inc

vs.
Cecile Cheng
G.R. No. 178523               June 16, 2010

FACTS:

October 20, 1994: Makati Sports Club Inc (MSCI) BOD adopted a

resolution authorizing the sale of 19 unissued shares at a floor price of P400,000
and P450,000 per share for Class A and B, respectively. Cheng was a Treasurer and
Director of Makati Sports Club in 1995
On July 7, 1995, Hodreal expressed his interest to buy a share, for this purpose
he sent the letter requesting to be wait listed. On November 1995, McFoods acquired
shares of Makati Sports Club at P1,800,000 through Urban Bank. Thereafter,
Cheng advised sale by McFoods to Hodreal of the share evidenced by a certificate
new certificate was issued. Investigation showed that Cheng profited from the
transaction because of her knowledge MSCI sought judgment that would order
respondents to pay the sum of P1,000,000.00, representing the amount allegedly
defrauded, together with interest and damages.

ISSUE:

Whether or not MSCI was defrauded by Cheng's collaboration with Mc Foods.

RULING:

NO.

No evidence on record that the Membership Committee acted

on Hodreal's letter. SEC. 29. (a) The Membership Committee shall process applications
for membership; ascertain that the requirements for stock ownership, including
citizenship, are complied with; submit to the Board its recommended on applicants for
inclusion in the Waiting List; take charge of auction sales of shares of stock; and
exercise such other powers and perform such other functions as may be authorized by
the Board. Membership Committee failed to question the alleged irregularities
attending Mc Foods’ purchase price of P1,800,000.00 is P1,400,000.00 more than the
floor price – it is not detrimental.
Upon payment and the execution of the Deed of Absolute Sale, it had the right
to demand the delivery of the stock certificate in its name. The right of a transferee to
have stocks transferred to its name is an inherent right flowing from its ownership of
the stocks certificate of stock paper representative or tangible evidence of the stock
itself and of the various interests therein not a stock in the corporation but is merely
evidence of the holder’s interest and status in the corporation, his ownership of the
share represented thereby MSCI failed to repurchase Mc Foods’ Class "A" share within
the 30 day pre-emptive period and no proof that Cheng personally profited.
 NORA A. BITONG
vs.
COURT OF APPEALS (FIFTH DIVISION), EUGENIA D. APOSTOL, JOSE A.
APOSTOL, MR. & MS. PUBLISHING CO., LETTY J. MAGSANOC
G.R. No. 123553 July 13, 1998

FACTS:

Petitioner Alleged before the SEC that she had been the Treasurer and a
Member of the Board of Directors of Mr. & Ms. from the time it was incorporated on 29
October 1976 to 11 April 1989, and was the registered owner of 1,000 shares of stock
out of the 4,088 total outstanding shares, petitioner complained of irregularities
committed from 1983 to 1987 by Eugenia D. Apostol, President and Chairperson of
the Board of Directors. Petitioner claimed that except for the sale of the
name Philippine Inquirer to Philippine Daily Inquirer (PDI hereafter) all other
transactions and agreements entered into by Mr. & Ms. with PDI were not supported
by any bond and/or stockholders' resolution. And, upon instructions of Eugenia D.
Apostol, Mr. & Ms. made several cash advances to PDI on various occasions
amounting to P3.276 million. On some of these borrowings PDI paid no interest
whatsoever. Despite the fact that the advances made by Mr. & Ms. to PDI were booked
as advances to an affiliate, there existed no board or stockholders' resolution, contract
nor any other document which could legally authorize the creation of and support to
an affiliate.
Petitioner further alleged that respondents Eugenia and Jose Apostol were
stockholders, directors and officers in both Mr. & Ms. and PDI. In fact, on 2 May 1986
respondents Eugenia D. Apostol, Leticia J. Magsanoc and Adoracion G. Nuyda
subscribed to PDI shares of stock at P50,000.00 each or a total of P150,000.00.

ISSUE:

Whether or not the petitioner is the holder of the proper certificates of share of
stock.

RULING:

NO.

The certificate of stock itself once issued is a continuing affirmation or

representation that the stock described therein is valid and genuine and is at
least prima facie evidence that it was legally issued in the absence of evidence to the
contrary. However, this presumption may be rebutted. 13 Similarly, books and records
of a corporation which include even the stock and transfer book are generally
admissible in evidence in favor of or against the corporation and its members to prove
the corporate acts, its financial status and other matters including one's status as a
stockholder. They are ordinarily the best evidence of corporate acts and proceedings.
However, the books and records of a corporation are not conclusive even
against the corporation but are prima facie evidence only. Parol evidence may be
admitted to supply omissions in the records, explain ambiguities, or show what
transpired where no records were kept, or in some cases where such records were
contradicted. The effect of entries in the books of the corporation which purport to be
regular records of the proceedings of its board of directors or stockholders can be
destroyed by testimony of a more conclusive character than mere suspicion that there
was an irregularity in the manner in which the books were kept. 
Thus, while petitioner asserts in her petition that Certificate of Stock No. 008
dated 25 July 1983 was issued in her name, private respondents argue that this
certificate was signed by respondent Eugenia D. Apostol as President only in 1989 and
was fraudulently antedated by petitioner who had possession of the Certificate Book
and the Stock and Transfer Book.

MANUEL A. TORRES, JR., (Deceased), GRACIANO J. TOBIAS, RODOLFO L.

JOCSON, JR., MELVIN S. JURISPRUDENCIA, AUGUSTUS CESAR AZURA and
EDGARDO D. PABALAN
vs.
COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION, TORMIL
REALTY & DEVELOPMENT CORPORATION, ANTONIO P. TORRES, JR., MA.
CRISTINA T. CARLOS, MA. LUISA T. MORALES and DANTE D. MORALES.
G.R. No. 120138 September 5, 1997

FACTS:

The late Manuel A. Torres, Jr. was the major stockholder of Tormil Realty &
Development Corporation while private respondents who are the children of Judge
Torres' deceased brother Antonio A. Torres, constituted the minority stockholders. In
particular, their respective shareholdings and positions in the corporation.
In 1984, Judge Torres, in order to make substantial savings in taxes, adopted
an "estate planning" scheme under which he assigned to Tormil Realty & Development
Corporation (Tormil for brevity) various real properties he owned and his shares of
stock in other corporations in exchange for 225,972 Tormil Realty shares. Hence, on
various dates in July and August of 1984, ten (10) deeds of assignment were executed
by the late Judge Torres. Consequently, the aforelisted properties were duly recorded
in the inventory of assets of Tormil Realty and the revenues generated by the said
properties were correspondingly entered in the corporation's books of account and
financial records.
Due to the insufficient number of shares of stock issued to Judge Torres and
the alleged refusal of private respondents to approve the needed increase in the
corporation's authorized capital stock (to cover the shortage of 972 shares due to
Judge Torres under the "estate planning" scheme), on 11 September 1986, Judge
Torres revoked the two (2) deeds of assignment covering the properties in Makati and
Pasay City. 

ISSUE:

Whether or not the deed of assignment executed can be revoked.

RULING:

NO.

The shortage of 972 shares would not be valid ground for respondent Torres to
unilaterally revoke the deeds of assignment he had executed on July 13, 1984 and
July 24, 1984 wherein he voluntarily assigned to TORMIL real properties covered by
TCT No. 374079 (Makati) and TCT No. 41527, 41528 and 41529 (Pasay) respectively. A
comparison of the number of shares that respondent Torres received from TORMIL by
virtue of the "deeds of assignment" and the stock certificates issued by the latter to the
former readily shows that TORMIL had substantially performed what was expected of
it. In fact, the first two issuances were in satisfaction to the properties being revoked
by respondent Torres. Hence, the shortage of 972 shares would never be a valid
ground for the revocation of the deeds covering Pasay and Quezon City properties.
Moreover, we agree with the contention of the Solicitor General that the
shortage of shares should not have affected the assignment of the Makati and Pasay
City properties which were executed in 13 and 24 July 1984 and the consideration for
which have been duly paid or fulfilled but should have been applied logically to the
last assignment of property — Judge Torres' Ayala Fund shares — which was executed
on 29 August 1984.