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stock in the corporation and merely expresses the contract between the
corporation and the stockholder. The shares of stock evidenced by said
certificates, meanwhile, are regarded as property and the owner of such
shares may, as a general rule, dispose of them as he sees fit, unless the
corporation has been dissolved, or unless the right to do so is properly
restricted, or the owner’s privilege of disposing of his shares has been
hampered by his own action.
Same; Same; Same; Section 63 of the Corporation Code prescribes the
manner by which a share of stock may be transferred.—Section 63 of the
Corporation Code prescribes the manner by which a share of stock may be
transferred. Said provision is essentially the same as Section 35 of the old
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the stockholder was transferring the shares to, whether by sale or some
other valid form of absolute conveyance of ownership. “[S]hares of stock
may be transferred by delivery to the transferee of the certificate properly
indorsed. Title may be vested in the transferee by the delivery of the duly
indorsed certificate of stock.”
Same; Same; Same; The Supreme Court (SC) stressed that a
corporation, either by its board, its bylaws, or the act of its officers, cannot
create restrictions in stock transfers.—In Rural Bank of Salinas, Inc. v.
Court of Appeals, 210 SCRA 510 (1992), the Court ruled that the right of a
transferee/assignee to have stocks transferred to his name is an inherent
right flowing from his ownership of the stocks. In said case, the private
respondent presented to the bank the deeds of assignment for registration,
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transfer of the shares assigned in the bank’s books, cancellation of the stock
certificates, and issuance of new stock certificates, which the bank refused.
In ruling favorably for the private respondent, the Court stressed that a
corporation, either by its board, its bylaws, or the act of its officers,
cannot create restrictions in stock transfers. In transferring stock, the
secretary of a corporation acts in purely ministerial capacity, and does not
try to decide the question of ownership. If a corporation refuses to make
such transfer without good cause, it may, in fact, even be compelled to do so
by mandamus.
Same; Same; Same; To be valid against third parties and the
corporation, the transfer must be recorded or registered in the books of
corporation.—To be valid against third parties and the corporation, the
transfer must be recorded or registered in the books of corporation. There
are several reasons why registration of the transfer is necessary: one, to
enable the transferee to exercise all the rights of a stockholder; two, to
inform the corporation of any change in share ownership so that it can
ascertain the persons entitled to the rights and subject to the liabilities of a
stockholder; and three, to avoid fictitious or fraudulent transfers, among
others. Thus, in Chua Guan v. Samahang Magsasaka, Inc., 62 Phil. 472
(1935), the Court stated that the only safe way to accomplish the
hypothecation of share of stock is for the transferee [a creditor, in this case]
to insist on the assignment and delivery of the certificate and to obtain the
transfer of the legal title to him on the books of the corporation by the
cancellation of the certificate and the issuance of a new one to him. In this
case, given the Court’s decision in G.R. No. 129777,
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REYES, J.:
This petition for review on certiorari1 under Rule 45 of the Rules
of Court seeks the reversal of the Decision2 dated April
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29, 2008 and the Resolution3 dated August 28, 2008 rendered by
the Court of Appeals (CA) in C.A.-G.R. S.P. No. 99836. The CA
affirmed the orders of the Securities and Exchange Commission
(SEC) granting the issuance of an alias writ of execution,
compelling petitioner Anna Teng (Teng) to register and issue new
certificates of stock in favor of respondent Ting Ping Lay (Ting
Ping).
The Facts
This case has its origin in G.R. No. 1297774 entitled TCL Sales
Corporation and Anna Teng v. Hon. Court of Appeals and Ting Ping
Lay. Herein respondent Ting Ping purchased 480 shares of TCL
Sales Corporation (TCL) from Peter Chiu (Chiu) on February 2,
1979; 1,400 shares on September 22, 1985 from his brother Teng
Ching Lay (Teng Ching), who was also the president and operations
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In its Decision7 dated July 20, 1994, the SEC granted Ting Ping’s
petition, ordering as follows:
WHEREFORE, in view of all the foregoing facts and
circumstances, judgment is hereby rendered.
A. Ordering [TCL and Teng] to record in the Books of
the Corporation the following shares:
1. 480 shares acquired by [Ting Ping] from [Chiu] per
Deed of Sales [sic] dated February 20, 1979;
2. 1,400 shares acquired by [Ting Ping] from [Teng Ching]
per Deed of Sale dated September 22, 1985; and
3. 1,440 shares acquired by [Ting Ping] from [Maluto] per
Deed of Assignment dated Sept. 2, 1989 [sic].
B. Ordering [TCL and Teng] to issue corresponding new
certificates of stocks (sic) in the name of [Ting Ping].
C. Ordering [TCL and Teng] to pay [Ting Ping] moral
damages in the amount of One Hundred Thousand Pesos
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After the finality of the Court’s decision, the SEC issued a writ of
execution addressed to the Sheriff of the Regional Trial Court (RTC)
of Manila. Teng, however, filed on February 4, 2004 a complaint for
interpleader with the RTC of Manila, Branch 46, docketed as Civil
Case No. 02-102776, where Teng sought to compel Henry and Ting
Ping to interplead and settle the issue of ownership over the 1,400
shares, which were previously owned by Teng Ching. Thus, the
deputized sheriff held in abeyance the further implementation of the
writ of execution pending outcome of Civil Case No. 02-102776.12
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On March 13, 2003, the RTC of Manila, Branch 46, rendered its
Decision13 in Civil Case No. 02-102776, finding Henry to have a
better right to the shares of stock formerly owned by Teng Ching,
except as to those covered by Stock Certificate No. 011 covering
262.5 shares, among others.14
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10 TCL Sales Corporation v. Court of Appeals, supra note 4 at pp. 41-44; p. 39.
11 Id., at p. 50; p. 45.
12 Rollo, p. 43.
13 Issued by Judge Artemio S. Tipon; id., at pp. 104-113.
14 Id., at p. 112.
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On May 25, 2007, the SEC denied the motions to quash filed by
Teng and TCL, and affirmed its Order dated August 9, 2006.24
Unperturbed, Teng filed a petition for certiorari and prohibition
under Rule 65 of the Rules of Court, docketed as C.A.-G.R. S.P. No.
99836.25 The SEC, through the Office of the Solicitor General
(OSG), filed a Comment dated June 30, 2008,26 which,
subsequently, Teng moved to expunge.27
On April 29, 2008, the CA promulgated the assailed decision
dismissing the petition and denying the motion to expunge the
SEC’s comment.28
Hence, Teng filed the present petition, raising the following
grounds:
I. THE RESPONDENT [CA] GRAVELY ERRED IN
DECLARING THAT THERE WAS NO NEED TO
SURRENDER THE STOCK CERTIFICATES
(REPRESENTING THE SHARES CONVEYED BY
[MALUTO] TO [TING PING]) TO RECORD THE
TRANSFER THEREOF IN THE CORPORATE BOOKS
AND ISSUE NEW STOCK CERTIFICATES[;]
II. THE RESPONDENT [CA] GRAVELY ERRED IN
UPHOLDING THE POSE THAT THERE WAS NEITHER
AMENDMENT NOR ALTERATION OF THE FINAL
DECISION OF THE SUPREME COURT IN “TCL SALE[S]
CORP., ET AL. V. CA, ET AL.,” G.R. NO. 129777, DESPITE
THE CONTRARY RECORD THERETO[;]
III. THE RESPONDENT [CA] GRAVELY ERRED IN
DECLARING THAT THE [OSG] WAS ALREADY
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36 Makati Sports Club, Inc. v. Cheng, 635 Phil. 103, 114; 621 SCRA 103, 117
(2010).
37 Padgett v. Babcock & Templeton, Inc. and Babcock, 59 Phil. 232, 234 (1933),
citing 14 C.J., Sec. 1033, pp. 663, 664.
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40 Rural Bank of Lipa City, Inc. v. Court of Appeals, 418 Phil. 461, 472; 366
SCRA 188, 197 (2001).
41 Id.; Bitong v. Court of Appeals (Fifth Division), 354 Phil. 516, 541; 292 SCRA
503, 528 (1998).
42 710 Phil. 831; 698 SCRA 272 (2013).
43 Id., at pp. 835-836; p. 277, citing Raquel-Santos v. Court of Appeals, 609 Phil.
630, 657; 592 SCRA 169, 197-198 (2009).
44 See Monserrat v. Ceron, 58 Phil. 469 (1933).
45 Razon v. Intermediate Appellate Court, G.R. No. 74306, March 16, 1992, 207
SCRA 234, 240, citing Embassy Farms, Inc. v. Court of Appeals, 266 Phil. 549, 557;
188 SCRA 492, 498 (1990). See also Lao v. Lao, supra note 34.
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53 Republic v. Sandiganbayan, 450 Phil. 98, 129; 402 SCRA 84, 107 (2003),
citing Batangas Laguna Tayabas Bus Company, Inc. v. Bitanga, 415 Phil. 43, 57; 362
SCRA 635, 649 (2001). See also De Erquiaga v. Court of Appeals, 258 Phil. 626,
637; 178 SCRA 1, 11 (1989).
54 Republic v. Sandiganbayan, id., at pp. 129-130; p. 107.
55 Escaño v. Filipinas Mining Corp., 74 Phil. 711, 716 (1944).
56 62 Phil. 472 (1935).
57 Id., at p. 481.
58 See Reyes v. RTC of Makati, Br. 142, 583 Phil. 591; 561 SCRA 593 (2008).
59 Rural Bank of Salinas, Inc. v. Court of Appeals, supra note 32 at p. 516.
60 442 Phil. 98; 393 SCRA 602 (2002).
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