Delos Santos vs Attorney General

Concepcion, J.
Facts:
This action involves the title to 1,600,000 shares of stock of the Lepanto
Consolidated Mining Co., Inc.

800,000 of the shares are claimed by Plaintiff delos Santos and the other
800,000 by co-plaintiff Astraquillo.

The stocks are covered by certificates issued in favor of Vicente Madrigal, who is
registered in the books of the Lepanto as owner of said stocks. The certificates
are in the plaintiffs possession except for one certificate covering 55,000 shares.

Plaintiffs version: Delos Santos bought 55,000 shares from Juan Campos. The
rest he bought from Carl Hess. The certificates were delivered to him when he
purchased the stocks.

Defendants version: Stocks were bought by Vicente Madrigal, in trust for, and for
the benefit of Mistui (a Japanese corporation). Madrigal delivered the
corresponding stock certificates, with his blank indorsement thereon to Mitsui
which kept them in its office. The certificates were looted from its office during the
liberation of Manila.

The CFI of Manila found the version of defendants inherently improbably and
found for the plaintiffs.
Issue: W/N plaintiffs purchased shares of stock in question.
Held: No.
Ratio:
CORPO RELATED (but is obiter)
Unrebutted evidence in the records show Vicente Madrigal bought the shares
and the certificates were endorsed to Mitsui. Mitsui never alienated the stocks.

Section 35 of the Corporation Law reads:
o xxx No transfer, however, shall be valid, except as between the parties,
until the transfer is entered and noted upon the books of the corporation
xxx

Pursuant to this provision, a share of stock may be transferred by endorsement
of the corresponding stock certificate, coupled with its delivery. However, the
transfer shall "not be valid, except as between the parties," until it is "entered and
noted upon the books of the corporation."

No such entry in the name of the plaintiffs herein having been made, it follows
that the transfer allegedly effected by Juan Campos and Carl Hess in the
plaintiffs favor is "not valid, except as between" themselves. It does not bind
either Madrigal or the Mitsuis, who are not parties to said alleged transaction.

Not valid means "absolutely void" and, hence, as good as non-existent (Uson
vs Diosomito).

NON-CORPO RELATED
The evidence of the plaintiff is more improbable than the defense. Rejecting the
theory of the defense, the court of origin was guided, not by the conduct of the
witnesses in the name course of their testimony, but by what His Honor, the trial
Judge, regarded as the inherent weakness thereof. It overlooks that fact that the
burden of proof is upon the plaintiffs.

The only evidence on the alleged sale of the shares of stock in question to the
plaintiffs is the uncorroborated testimony of Apolinario de los Santos.

The evidence of the defense shows that Vicente Madrigal did buy the stocks for
Mitsui and the subsequent handling and safekeeping of the certificates were
corroborated by Madrigal and two managers of the corporation. The managers
alleged that the certificates were kept in the office and were never sold to
anyone.

Furthermore, delos Santos claims that in 1942, the stocks were sold to him and
the certificates delivered as well. According to the court, this cannot be true
because during that time, the certificates were kept in the offices of Mitsui. The
SC found the testimony of Mitsuis managers credible and delos Santoss self-
serving.