Capco indorsed and delivered two stock certificates to Macasaet without filling in the blanks on the back. Macasaet acknowledged receiving them "in trust and for safekeeping only." When Capco later demanded their return to sell the stocks, Macasaet failed to immediately return them. The Supreme Court ruled that by signing the back of the certificates without filling in the blanks, Capco conferred apparent ownership on Macasaet based on the legal principle that stock certificates are "quasi-negotiable" instruments. Therefore, Macasaet was within his rights to entrust the certificates to another party for a potential business deal.
Capco indorsed and delivered two stock certificates to Macasaet without filling in the blanks on the back. Macasaet acknowledged receiving them "in trust and for safekeeping only." When Capco later demanded their return to sell the stocks, Macasaet failed to immediately return them. The Supreme Court ruled that by signing the back of the certificates without filling in the blanks, Capco conferred apparent ownership on Macasaet based on the legal principle that stock certificates are "quasi-negotiable" instruments. Therefore, Macasaet was within his rights to entrust the certificates to another party for a potential business deal.
Capco indorsed and delivered two stock certificates to Macasaet without filling in the blanks on the back. Macasaet acknowledged receiving them "in trust and for safekeeping only." When Capco later demanded their return to sell the stocks, Macasaet failed to immediately return them. The Supreme Court ruled that by signing the back of the certificates without filling in the blanks, Capco conferred apparent ownership on Macasaet based on the legal principle that stock certificates are "quasi-negotiable" instruments. Therefore, Macasaet was within his rights to entrust the certificates to another party for a potential business deal.
NEGOTIABLE INSTRUMENTS; STOCK CERTIFICATES; PRINCE
CAPCO vs. Macasaet, G.R. No. 90888, September 13, 1990
Petitioner v. Respondents NARRATIVE FACTS. Capco was a stockholder of record, director and executive vice-president of Monte Oro Mineral Resources, Inc. whose shares were traded in the stock market. He owned shares of the capital stock of Monte Oro as evidenced by Stock Certificate No. 002 and Stock Certificate No. 026. On February 18, 1976, Capco indorsed and delivered Nos. 002 and 026 to Macasaet, board chairman and President of Monte Oro. Capco signed the printed form at the back of both Stock Certificate Nos. 002 and 026 without filling in the blanks at the time the said stock certificates were delivered to Macasaet. Macasaet personally received Nos. 002 and 026. He acknowledged receiving Nos. 002 and .026 in trust and safe-keeping only as clearly stated in his Acknowledgement Receipt. On April 26, 1976, Capco, intending to sell shares of stocks, demanded the return of No. 002 and 026 from Macasaet but the latter failed to produce them immediately. Two days later, Macasaet replaced No. 026 with his own Stock Certificate No. 025. Capco duly acknowledged the receipt of the said replacement. On May 4, 1976, Macasaet returned No. 002 to Capco as evidenced by the handwritten receipt signed by the latter who likewise made a handwritten notation stating "all cleared" at the left hand margin thereof. On August 12, 1976, Capco filed a complaint for damages in the RTC against Macasaet et al for their failure to return the stock certificates upon demand which caused Capco's loss of profit in his sales of stocks. RESPONDENT'S DEFENSE. Macasaet said that he had in turn entrusted Nos. 002 and 026 to Feliciano to be shown to a certain group for the purpose of a joint venture. He also had actually made several demands for the return of the Nos. 002 and 026 from Feliciano who refused and failed to do so. Lastly, the words "ALL CLEARED" written by Capco himself on his acknowledgment receipt undoubtedly meant to discharge Macasaet from any responsibility or liability. The RTC rendered judgment favorable to Capco. Macasaet et al, thereafter, appealed to the CA who reversed and set aside the RTC for lack of proof. Capco moved for reconsideration but was later denied by CA. Thus, he petitioned to the SC for review of CA's judgment. ISSUE: Were the stock certificates already been indorsed even if the indorsee's acknowledgement receipt says that the certificates are held in trust and safe-keeping only? HELD: YES. PETITIONED DISMISSED. CA AFFIRMED. RULEs/REASONs: 1) What applicable law or legal principle was used for the most legally significant facts? From the applicable law or legal principle, what guideline/standard/requisites/essentials/tests were used? Define/Describe. Certificates of stocks are considered as "quasi-negotiable" instruments. When the owner or shareholder of these certificates signs the printed form of sale or assignment at the back of every stock certificate without filling in the blanks provided for the name of the transferee as well as for the name of the attorney-in-fact, the said owner or shareholder, in effect, confers on another all the indicia of ownership of the said stock certificates. 2) Why were the guideline/standard/requisites/ essentials used in the decision? It is true that when the petitioner delivered Stock Certificate Nos. 002 and 026 to respondent Macasaet the latter acknowledged receiving them "in trust and for safekeeping only." This acknowledgment, however, cannot outweigh the legal effects of the stock certificates having been "already indorsed". There is no dispute that respondent Macasaet received the petitioner's certificates in that condition as evidenced by the same Acknowledgment Receipt dated February 18, 1976. In the case at bar, Capco signed the printed form at the back of both Stock Certificate Nos. 002 and 026 without filling in the blanks at the time the said stock certificates were delivered to Macasaet. 3) How were the guideline/standard/requisites/essentials/tests used in the facts? How the facts fit or did not fit with the guideline/standard/requisites/essentials? In the case at bar, Capco signed the printed form at the back of both Stock Certificate Nos. 002 and 026 without filling in the blanks at the time the said stock certificates were delivered to Macasaet. Hence, Capco's acts of indorsement and delivery conferred on Macasaet the right to hold them as though they were his own. On account of this apparent transfer of ownership, it was not irregular on the part of respondent Macasaet to deliver the stock certificates in question to respondent Feliciano for consideration in connection with a contemplated tie-up between two business groups.