Fernandez, Frank Napoleon P.
VICENTE C. PONCE, Petitioner, vs. ALSONS CEMENT CORPORATION,
and FRANCISCO M. GIRON, JR., Respondents.
Facts: On Feb 8, 1968, Gaid, the incorporator of Victory Cement Corp(VCC),
assigned/indorsed 239,500 of his shares to Ponce, herein petitioner, as
evidenced by an executed “Deed of Undertaking” and Indorsement letter. VCC
was later named as Alsons Cement Corporation(ACC). From the time of
incorporation up to the time when Ponce filed a petition, no certificate of stock
were issued in the name of Gaid or Ponce. Hence, Ponce demanded that herein
respondents to issue him certificate of stocks amounting to 239,500 shares, its
legal increments, and pay damages for failing to do so.
Respondents moved to dismiss the petition on the grounds that complaint
states no cause of action, mandamus is improper and not available to petitioner,
petitioner is not the real party in interest, and the cause of action is barred by
statute of limitations, and petitioners cause of action is barred by laches.
Issue: WON Ponce is a real party in interest?
WON the Corporation should have issued Ponce certificate of stocks upon
Ponce’s presentation of the Indorsement letter?
Ruling: No, Ponce is not a real party in interest.
Under Section 63 of the Corporation Code:
“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
Fernandez, Frank Napoleon P.
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.”
The real party in interest here is Gaid, his estate, or his heirs. As stated in the
provision of the Corporation Code, it was the owner of such stock which should
invoke such demand to issue himself a certificate of stock, and not by a person
who possess merely a letter of Indorsement.
No, the corporation cannot issue Ponce a certificate of stock.
As taken from the same vein. Section 63 of the Corporation Code states that no
transfers shall be valid until the transfer is recorded in the books of the
corporation. Only a transfer between the contracting parties is valid, and not
between the transferee and the corporation.
It is only through Gaid’s act of transferring such ownership of stocks in the
books of corporation wherein Ponce may have the right to compel the
corporation’s secretary to issue him a certificate stock. Mere possession and
presentation of a letter of Indorsement does not warrant him a right to demand
a certificate of stock in his name.
As decided in a case by the Supreme Court, “a mere indorsement by the
supposed owners of the stock, in the absence of express instructions from them,
cannot be the basis of an action for mandamus and that the rights of the parties
have to be threshed out in an ordinary action.
Fernandez, Frank Napoleon P.
Before a transferee may ask for the issuance of stock certificates, he must first
cause the registration of the transfer and thereby enjoy the status of a
stockholder insofar as the corporation is concerned. A corporate secretary may
not be compelled to register transfers of shares on the basis merely of an
indorsement of stock certificates.”
Absent an allegation that the transfer of shares is recorded in the stock and
transfer book of respondent ALSONS, there appears no basis for a clear and
indisputable duty or clear legal obligation that can be imposed upon the
respondent corporate secretary, so as to justify the issuance of the writ of
mandamus to compel him to perform the transfer of the shares to petitioner.
One may own shares of corporate stock without possessing a stock
certificate. But a certificate of stock is the tangible evidence of the stock itself
and of the various interests therein. The certificate is the evidence of the holders
interest and status in the corporation, his ownership of the share represented
thereby. The certificate is in law, so to speak, an equivalent of such ownership.
it rests on the will of the stockholder whether he wants to be issued stock
certificates, and a stockholder may opt not to be issued a certificate.
