De Silva subscribed for 650 shares of stock of Aboitiz = Paid 200 shares only
The corporation became insolvent = Phil Trust became the ASSIGNEE during
bankruptcy
Phil Trust instituted to recover one-half of the stock subscription of the defendant
( w/c was NOT PAID by Mariano )
Trial judge ruled resolution relied upon was without effect and was still liable for the
unpaid balance.
Hence appeal.
Held: YES
1.
subscription to the capital of a corporation constitute a find to which
creditors have a right to look for satisfaction of their claims and that the
assignee in insolvency can maintain an action upon any unpaid stock
subscription in order to realize assets for the payment of its debts
2.
1.
Issue:
WON collect subscription by another method different from that prescribed in the bylaws?
Held: YES
1.
it is discretionary on the part of the board of directors to do whatever is
provided in the said article relative to the application of a part of the 70
per cent of the profit
2.
If the board of directors does not wish to make use of said authority it
has two other remedies for accomplishing the same purpose
3.
the plaintiff has no right whatsoever under the provision of the above
cited article 46 of the said by-laws to prevent the board of directors from
applying any other method than that mentioned in the said article
Chua Soco subscribed 500 shares of China Banking Corporation = paid half of the
subscription price
Condition = failure to pay = 500 shares specified in this receipt is subject to sale by
the China Banking Corporation for the payment of any unpaid subscriptions
Chua Soco executed a promissory note in favor of the plaintiff Fua Cun = chattel
mortgage on the shares
500 shares were attached and levied upon to satisfy his debt with China Banking
Corp
Fua Cun thereupon brought the present action = Grounds:
1.
by virtue of the payment of the one-half of the subscription price
2.
in effect became the owner of 250 shares
3.
By virtue of Chattle Mortgage = hold priority over the claim
Trial court ruled in favor of Fua Cun = ORDER the return of the shares. Hence
appeal
Issue:
WON by paying one-half of the subscription in effect became the owner of 250
shares?
Held: NO
A subscriber does not become the owner of a particular number of shares
corresponding to the amount he already paid but merely holds a right of equity in
the total number of shares subscribed.
Complete ownership over the total number of shares subscribed will only vest
with the stockholder upon payment of the whole subscription price.
Supplementary Notes:
A banking corporation has no lien upon its own stock for the indebtedness of
the stockholders even when the by-laws provide that the shares shall be
transferable only upon the books of the corporation and that no such transfer
shall be made if the holder of the shares is indebted to the corporation.
1.
the terms and conditions set forth therein use the word "may"
= HENCE OPTIONAL
The Central Bank also made a finding that the Bank has been
suffering from chronic reserve deficiency = ORDERED not to
redeem any preferred shares Since redemption would reduce
the assets of the Bank to the prejudice of its depositors and
creditors
2.
3.
even if there are existing profits, the board of directors has the
discretion to determine whether or not dividends are to be
declared
2.
Robes Realty secured a loan P120000 from the Republic Planters Bank
** Partially in the form Money and Partially in the form ofpreferred shares of
stocks
Stocks bear the following terms and conditions:
1.
right to receive a quarterly dividend of 1% (cumulative and participating )
2.
such preferred shares may be redeemed
Supplementary Notes
preferred share of stock = one which entitles the holder thereof to certain
preferences over the holders of common stock
RULE = There is no guarantee, however, that the share will receive any
dividends.
Shareholders, both common and preferred are considered = risk takers who
invest capital in the business arid who can look only to what is left after
corporate debts and liabilities are fully paid.
Redeemable shares
usually preferred
Robes Realty filed a complaint = Failure of the bank to give dividends and redeem
the shares
A Trust agreement was entered into because: Reeses desire that Mantrasco and
Mantrasocs 2 subsidiaries to continue under the management of Manning et al
upon his [Reese] death
Hence Appeal.
Reese died = Mantrasco paid Reeses estate the value of his shares
= This shares was cancelled and a new certificate was issued in the
name of Mantrasco
Issue:
WON the bank can be compelled to redeem the preferred shares issued to RFRDC
and Robes?
WON entitled to the payment of certain rate of interest on the stocks as a matter of
right without necessity of a prior declaration of dividend?
Held: NO and NO
When said purchase price has been fully paid = shares which were declared as
dividends
BIR issued assessments = failed to declare the said stock dividends as part of their
taxable income
3.
Issue:
WON the shares are treasury shares?
Held: NO
1.
Treasury shares = are stocks issued and fully paid for and re-acquired by
the corporation either by purchase, donation forfeiture or other means
3.
Supplementary Notes
The dividend is only the basis but not the source for such
payment
Supplementary Notes
Steinberg v. Velasco
2.
3.
Steinberg prayed that the Officers be liable for the amount of the capital stock
purchased and the amount of the dividends paid
The lower court dismissed the complained and rendered judgment in favor of the
defendants.
shares not fully paid up may be voted provided no subscription is unpaid and
delinquent.
it modified sec 36 of the old corporation law by making payment of par valueas
prerequisite for the issuance of certificates of par value stocks and makes payment
of full subscription as prerequisite for issuance of certificates of no-par value stocks.
Stated in another way, the present law requires as a condition before a share
holder can vote his shares, that his full subscription be paid in the case of no
par value stock; and in case of stock corporation with par value, the
stockholder can vote the shares fully paid by him only, irrespective of the
unpaid delinquent shares.
Issue:
WON Board of Directors of Sibuguey could legally declare a dividend?
Gonzalo Toco mortgaged his shares to Chua Chiu to guarantee the payment of debt
Held: NO
1.
there was no stipulation as to the actual cash value of those
accounts.
Chua Chiu assigned all his right and interest in said mortgage to Chua Guan was
registered in the
1.
office of the register of deeds in the City of Manila
2.
the office of the said corporation
Toco defaulted = HENCE Chua Guan foreclosed said mortgage
Chua Guan = Highest bidder
= Sheriff executed in his favor a certificate of sale of said shares
tendered the certificates of stock standing in the name of Toco = wants to:
1.
have it canceled
2.
Issue new ones in his name
Officers REFUSED = Reason: prior to the date when the Chua made demands = 9
attachments were made on the stocks
: Chua Refused to have these attachments noted on
the new certificates
Issue:
WON registration of said chattel mortgage give constructive notice to the said
attaching creditors?
Held: NO it was invalid
The registration of the chattel mortgage in the office of the corporation was
not necessary and had no legal effect.
two ways for executing a valid chattel mortgage which shall be effective against third
persons.
a)
the possession of the property mortgage must be delivered to and
retained by the mortgagee
b)
without such delivery the mortgage must be recorded in the proper office
or offices of the register or registers of deeds
the proper place of registration of such a mortgage
Enrique Monserrat assigned the usufruct of half of his common shares of stock to
Ceron
Condition = prohibiting Ceron from selling, mortgaging, encumbering, or exercising
any act implying absolute ownership
Ceron = mortgaged and endorsed the shares of stock including Monserrats shares
to Eduardo Matute
= as payment of his debt
Matute was not informed of the condition
Trial court ruled in favor of Monserrat and declared the mortgage null and void
The Fua vs Cun (equity on vote) principle does not come in this case
sec 37 (64) states that No certificate of stock shall be issued to a
subscriber as fully paid up until the full par value thereof, or the full subscription in
the case of no par stock, has been paid by him to the corporation. Subscribed
Held:
Section 35 of the Corporation Law does not require any entry except
of transfers of shares of stock in order that such transfers may be valid as
against third persons
Supplementary Notes
USON vs DIOSOMITO
Then Barcelon presented the certificates for registration = 9 months after the
attachment had been levied 3
Trial Court ruled in favor of Uson = Hence the Shares were foreclosed
VCC was renamed Floro Cement Corporation (FCC) and then to Alsons Cement
Corporation (ACC)
right of the owner of the shares of stock to transfer the same by delivery
= limited and restricted by the law
Reason = since at the time it was attached, the shares still stood in
the name of Diosomito on the books of the corporation
RULE = an attachment lien prevails over a prior unregistered bona fide stock
transfer.
The CFI of Manila ordered Salvosa to transfer and deliver to Escano shares of the
Filipinas Mining Corp.
The escrow however was only to be transferred upon its release by the said
Company.
mere indorsement of stock certificates does not in itself give to the indorsee
such a right to have a transfer of the shares of stock on the books of the
company
3.
mandamus - proper remedy to make him the rightful owner and holder of a
stock certificate to be issued in his name
Despite the said order = Salvosa was able to sell the shares to Bengzon
Bengzon thereafter sold the shares to Standard Investment
Filipinas Mining thereafter issued certificates of shares of stock to Standard
Investment
** despite the fact that the sales and transfers from Salvosa to Bengzon, Bengzon
to Standard, were not recorded in the corporate books until 3 years after the
said shares were attached by garnishment.
Issue: Whether the issuance of the certificate of shares of stock by Filipinas Mining
to Standard Investment was valid as against the attaching creditor of the said
shares?
Held: No.
1.
transfer needs to be recorded in the corporate books to be effective
as against 3rd persons This recording is required
reasons:
1) to know who the real owner of the shares
2) gives the corporation a chance to object to such transfer =
against any claims it may have on the stock
3) to avoid fictitious and fraudulent transfers
RULE = There is no valid reason to treat unissued shares held in escrow
differently from the issued shares insofar as their sale and transfer are
concerned.
TAN v. SEC
Alfonso = owner of 400 shares of the capital stock ( evidenced by certificate number
2)
= elected as President
Young and Ong ( incorporators ) = withdrew by assigning to the corp. their shares
Tan's certificate of stock was cancelled by virtue of a resolution = made new stocks
certificate for Alfonso and Angel
Tan sold (50) shares out of his capital stock to Angel = in order to complete the
Directors
Alfonso S. Tan was given back Stock Certificate = for him to endorse and he
deliberately withheld it for reasons of his own
** so as if no delivery
Incoporated Mining's counsel presented the certificate for registration for transfer to
his name
Batong buhay refused to transfer = Reason = that they might he held liable for
damages
ISSUE:
WON transfer is valid w/o delivery?
Held: YES
Section 63 of the Corporation Code of the Philippines is NOT "mandatory in
nature"
But delivery is not essential where it appears that the persons sought
to be held as stockholders are officers of the corporation, and have
the custody of the stock book
The certificate is not stock in the corporation but is merely evidence of the
holder's interest and status in the corporation
HAGER vs BRYAN
Hager filed a writ of mandamus against the Bryan ( Corp Sec ) = to compel him to
transfer upon the books of the company certain shares of stock SOLD TO HIM BY
LEVERING
certificates were issued in the name of Bryan-London & Co. and by them indorsed
to your petitioner
Bryan refused to transfer stocks and filed a demurrer
Issue:
WON a writ of mandamus is proper in this case?
Held: NO
1.
No share of stock against which the corporation holds any unpaid
claim, shall be transferable on the books of the corporation.
Writ will not ordinarily issue if the plaintiff has other remedies
corporation improperly refuses to transfer = clearly liable for the damages
Issue:
WON Court of Appeals award damages by way of unrealized profits despite the
absence of supporting evidence?
Held: NO
Stipulation of facts of the parties = (X) show intent to sell on specific dates