BATONG BUHAY GOLD MINES, INC., petitioner, vs.

THE COURT OF APPEALS and INCO

MINING CORPORATION, respondents. (asawa nagbenta ng shares walang alam si misis)
Francisco Aguac who is married with Paula Aguac sold his shares of stock absent consent of the latter.
Paula objected to the sale and asked for her share on the proceeds of the sale thus sent a letter to the
defendant Batong Buhay withholding the transfer of the New Certificate of Sale to the plaintiff who
bought the shares sold by her husband. However, the plaintiff demanded to transfer the shares and
issue a New Stocks Certificate but to no avail. The contention of Batong Buhay is that considering the
objection of the wife Paula, that they may be held liable for damages. Plaintiff thus filed an action
compelling defendant to release the new stock certificate. The trial court adjudged in the plaintiff’s
favor.The CA modified such decision

FACTS:

The defendant Batong Buhay Gold Mines, Inc. issued Stock Certificate No. 16807 covering 62,495 shares
with a par value of P0.01 per share to Francisco Aguac who was then legally married to Paula G. Aguac,
but the said spouses had lived separately for more than fourteen (14) years prior to the said date.
On December 16, 1969, Francisco Aguac sold his 62,495 shares covered by Stock Certificate No. 16807
for the sum of P9.374.70 in favor of the plaintiff, The said sale was made by him without the knowledge
or consent of his wife Paula G. Aguac.

On the same date of the sale, December 16, 1969, Paula G. Aguac wrote a letter to the president of
defendant Batong Buhay Gold Mines, Inc. asking that the transfer of the shares sold by her husband be
withheld, inasmuch as the same constituted conjugal property and her share of proceeds of the sale was
not given to her

On January 5, 1970, under a covering letter dated December 26, 1969, plaintiff’s counsel presented Stock
Certificate No. 16807 duly endorsed by Francisco Aguac for registration and transfer of the said stock
certificate in the name of the plaintiff. The said letter was addressed to defendant Del Rosario and
Company which was the transfer agent of Batong Buhay at that time.
In a letter dated February 24, 1970 also addressed to Del Rosario and Company, plaintiff’s counsel
requested information as to the action taken on the transfer of Stock Certificate No. 16807 in favor of the
plaintiff, but to no avail.
In a reply letter dated February 28, 1970, Del Rosario and Company informed plaintiff’s counsel that
Batong Buhay has referred the matter to their attorneys, inasmuch as there was a “technical problem that
has developed in the transfer of stock,” and further advised that the plaintiff communicate directly with
Batong Buhay for further details.
CONTENTION OF DEFENDANT:
It developed that when Batong Buhay was about to effect the cancellation of Stock Certificate No. 16807
and transfer the 62,495 shares covered thereby to the plaintiff and had, in fact, prepared new Stock
Certificate No. 27650 dated January 5,1970, it received the letter of Paula G. Aguac advising it to
withhold the transfer of the subject shares of stock on the ground that the same are conjugal property.

On March 12, 1970, Francisco Aguac was charged in a criminal complaint for concubinage filed by Paula
G. Aguac before the Municipal Court of Pasil, Kalinga-Apayao.
The defendants justify their refusal to transfer the shares of stock of Francisco Aguac in the name of the
plaintiff in view of their apprehension that they might he held liable for damages under Article 173 of the
Civil Code.
In view thereof, plaintiff filed an action for failure of the defendant to release the transfer Stock
Certificate. The trial court adjudged in the plaintiff’s favor.The CA modified trial courrt’s decision.
Hence, this petition.

ISSUE: WON the respondent may recover damages by way of unrealized profits when it has not shown
that it was damaged in any manner by the act of petitioner. (NO)

RULING:
The SC held in the negative.

Speculative damages cannot be recovered.

In case of refusal of the corporation to issue new certificates, the claim for damages pertaining to the
value of the shares could have sold at the stock market is considered SPECULATIVE DAMAGE and
CANNOT BE RECOVERED. (This only applies for publicly listed shares)

The stipulation of facts of the parties does not at all show that private respondent intended to
sell, or would sell or would have sold the stocks in question on specified dates. While it is true
that shares of stock may go up or down in value (as in fact the concerned shares here really rose
from fifteen (15) centavos to twenty three or twenty four (23/24) centavos per share and then fell
to about two (2) centavos per share, still whatever profits could have been made are purely
SPECULATIVE, for it was difficult to predict with any decree of certainty the rise and fall in the
value of the shares. Thus this Court has ruled that speculative damages cannot be recovered.
It is easy to say now that had private respondent gained legal title to the shares, it could have
sold the same and reaped a profit of P5.624.95 but it could not do so because of petitioner’s
refusal to transfer the stocks in the former’s name at the time demand was made, but then it is
also true that human nature, being what it is, private respondent’s officials could also have
refused to sell and instead wait for expected further increases in value.

G.R. No. L-10122 August 30, 1958

LEE E. WON alias RAMON LEE, plaintiff-appellant,

vs.
WACK WACK GOLF and COUNTRY CLUB, INC., defendant-appellee.

SYNOPSIS>A membership certificate was transferred and assigned to plaintiff Lee. However, the
defendant refused to register said certificate as the owner of one share of stock of said defendant
Wackwack golf. Hence, plaintiff Lee filed an action in the CFI. However, the defendant Wackwack
moved to dismiss the complaint on the ground of prescription being that 11 years have elapsed, that
such complaint was filed beyond the 5 year period as provided in Art. 1149 of the civil code.
Meantime, record shows that The certificate in question contains a condition to the effect that no
assignment thereof "shall be effective with respect to the club until such assignment is registered in
the books of the club, as provided in the By-Laws."

On December 2, 1942, the defendant (a non-stock corporation) issued to Iwao Teruyama

Membership Certificate No. 201 which was assigned to M. T. Reyes on April 22, 1944. Subsequently
in the same year 1944, M. T. Reyes transferred and assigned said certificate to the plaintiff.

On April 26, 1955, the plaintiff filed an action in the Court of First Instance of Manila against the
defendant, alleging that shortly after the rehabilitation of the defendant after the war, the plaintiff
asked the defendant to register in its books the assignment in favor of the plaintiff and to issue to the
latter a new certificate, but that the defendant had refused and still refuses to do so unlawfully; and
praying that the plaintiff be declared the owner of one share of stock of the defendant and that the
latter be ordered to issue a correspondent new certificate.

CONTENTION OF THE DEFENDANT:On June 6, 1955, the defendant filed a motion to dismiss,
alleging that from 1944, when the plaintiff's right of action had accrued, to April 26, 1955, when the
complaint was filed, eleven years have elapsed, and that therefore the complaint was filed beyond
the 5-year period fixed in Article 1149 of the Civil Code.

The moment the certificate was assigned to the plaintiff, the latter’s right to have the assignment
registered commenced to exist.
The certificate in question contains a condition to the effect that no assignment thereof "shall be
effective with respect to the club until such assignment is registered in the books of the club, as
provided in the By-Laws."

The CFI of Manila issued an order dismissing the complaint. Both MRs of the plaintiff were denied.
Hence, this appeal.

ISSUE: WON the registering of assignment is subject of prescription. (NO)

RULING:

There is no fixed period for registering an assignment so the complaint cannot be barred by
the Statute of Limitations

A stipulation on the stock certificate that the assignment thereof would not be binding on the
corporation unless such assignment is registered in the books of the club as required under the by-laws,
which does not provide when the registration should be made, this would mean that the cause of action
and determination of the prescription would begin only upon demand for registration is made and not
at the time of the assignment of the certificate.
The defendant has not made herein any pretense to that effect; but it contends that from the moment
the certificate was assigned to the plaintiff, the latter's right to have the assignment registered
commenced to exist. This contention is correct, but it would not follow that said right should be
exercised immediately or within a definite period. The existence of a right is one thing, and the
duration of said right is another.

On the other hand, it is stated in the appealed order of dismissal that the plaintiff sought to register
the assignment on April 13, 1955; whereas in plaintiff's brief it is alleged that it was only in February,
1955, when the defendant refused to recognize the plaintiff. If, as already observed, there is no fixed
period for registering an assignment, how can the complaint be considered as already barred by the
Statute of Limitations when it was filed on April 26, 1955, or barely a few days (according to the
lower court) and two months (according to the plaintiff), after the demand for registration and its
denial by the defendant. Plaintiff's right was violated only sometime in 1955, and it could not
accordingly have asserted any cause of action against the defendant before that.

[No. 7991. January 29, 1914.]

LEON J. LAMBERT, plaintiff and appellant, vs. T. J. Fox, defendant and appellee.

1. .; SUSPENSION OF RIGHT TO SELL, CORPORATE STOCK.—Where the

suspension of the right to sell stock in a corporation has a beneficial purpose and results
in the protection of the corporation as well as of the individual parties to the contract
and is reasonable as to time, the suspension is legal.

FACTS:

In 1911, the firm of John R. Edgar and Company (engaged in the retail book and stationery business)
found itself in such a financial condition that its creditors, including the defendant and plaintiff, agreed
to take over the business, incorporate it and accept shares therein in payment of their respective
credits. The plaintiff and defendant, being the 2 largest stockholders of the corporation, entered into an
agreement, that neither of them would sell, transfer or otherwise dispose of any part of their
shareholdings till after one year from the date thereof. They further agreed that the party violating such
agreement would pay p1,000 to the other party as liquidated damages in breach of contract.

Notwithstanding this contract the defendant Fox on October 19, 1911, sold his stock in the
said corporation to E. C. McCullough of the firm of E. C. McCullough & Co. of Manila, a strong
competitor of the said John R, Edgar & Co., Inc.
This sale was made by the defendant against the protest of the plaintiff and with the warning that
he would be held liable under the contract hereinabove set forth and in accordance with its terms.
In fact, the defendant Fox offered to sell his shares of stock to the plaintiff for the same sum that
McCullough was paying for them less P1,000, the penalty specified in the contract

ISSUE: WON the agreement made between the parties is legal and valid. (YES)

RULING:

In upholding the agreement, the SC held that the stipulation was not illegal nor in restraint of trade and
offends no public policy. The suspension of the power to sell has a beneficial purpose, results in the
protection of the corporation as well as of the individual parties to the contract, and is reasonable as
to the length of time of the suspension. But in holding so, this case made it clear that the doctrine did
not mean to cover suspension of the right of alienation of stock, limiting ourselves to the statement that
the suspension in this particular case is legal and valid.

No. 23241. March 14, 1925]

HENRY FLEISCHER, plaintiff and appellee, vs. BOTICA NoLASCO Co., INC., defendant
and appellant.
FACTS:
Plaintiff prayed that the board of directors of Botica Nolasco Co., Inc. be ordered to register in
the books of the corporation five shares of its stock in his name.