This case discusses the registration of shares transferred from one individual to another when the original subscriber had not fully paid for the shares.
Teofilo Po subscribed to 80 shares but only paid 25% so far. He then sold 20 of those shares to Ricardo Nava, but the corporation refused to register the transfer since Po had not fully paid. Nava filed a case to compel the registration but lost.
The Court affirmed that until a subscriber fully pays for shares, no certificate need be issued. A partial payment only entitles the subscriber to vote those shares but not freely transfer them. Thus, Nava had no right to compel registration of the transfer since Po had not fully paid yet.
This case discusses the registration of shares transferred from one individual to another when the original subscriber had not fully paid for the shares.
Teofilo Po subscribed to 80 shares but only paid 25% so far. He then sold 20 of those shares to Ricardo Nava, but the corporation refused to register the transfer since Po had not fully paid. Nava filed a case to compel the registration but lost.
The Court affirmed that until a subscriber fully pays for shares, no certificate need be issued. A partial payment only entitles the subscriber to vote those shares but not freely transfer them. Thus, Nava had no right to compel registration of the transfer since Po had not fully paid yet.
This case discusses the registration of shares transferred from one individual to another when the original subscriber had not fully paid for the shares.
Teofilo Po subscribed to 80 shares but only paid 25% so far. He then sold 20 of those shares to Ricardo Nava, but the corporation refused to register the transfer since Po had not fully paid. Nava filed a case to compel the registration but lost.
The Court affirmed that until a subscriber fully pays for shares, no certificate need be issued. A partial payment only entitles the subscriber to vote those shares but not freely transfer them. Thus, Nava had no right to compel registration of the transfer since Po had not fully paid yet.
This case discusses the registration of shares transferred from one individual to another when the original subscriber had not fully paid for the shares.
Teofilo Po subscribed to 80 shares but only paid 25% so far. He then sold 20 of those shares to Ricardo Nava, but the corporation refused to register the transfer since Po had not fully paid. Nava filed a case to compel the registration but lost.
The Court affirmed that until a subscriber fully pays for shares, no certificate need be issued. A partial payment only entitles the subscriber to vote those shares but not freely transfer them. Thus, Nava had no right to compel registration of the transfer since Po had not fully paid yet.
Lessons Applicable: Stock and Transfer Book (Corporate Law) FACTS: Teofilo Po as an incorporator subscribed to 80 shares of Peers Marketing Corporation at P100 PV and paid 25%. No certificate of stock was issued to him or to any incorporator, subscriber or stockholder. April 2, 1966: Po sold to Ricardo A. Nava for P2,000 20 of 80 shares Nava requested to register the sale in the books of the corporation. Denied - Po has not paid fully the amount of his subscription Po was delinquent of the balance due so the corporation claimed on his entire subscription of which included 20 shares sold to Nava. December 21, 1966: Nava filed this mandamus to register 20 shares in Nava's name in the corporation's transfer book. CFI: court dismissed the petition Nava appealed on the basis that: Section 37: "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 case of no par stock, has been paid by him to the corporation"
SEC. 35. The capital stock of stock corporations shall be
divided into shares for which certificates signed by the president or the vice-president, countersigned by the secretary or clerk and sealed with the seal of the corporation, shall be issued in accordance with the by-laws. Shares of stock so issued are personal property and may be transferred by delivery of the certificate 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 entered and noted upon 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, and the number of shares transferred. No share of stock against which the corporation holds any unpaid claim shall be transferable on the books of the corporation. SEC. 36. (re voting trust agreement) The certificates of stock so transferred shall be surrendered and cancelled, and new certificates therefor issued to such person or persons, or corporation, as such trustee or trustees, in which new certificates it shall appear that they are issued pursuant to said agreement.
ISSUE:
A stock subscription is a subsisting liability from the time the
subscription is made. The subscriber is as much bound to pay his subscription as he would be to pay any other debt. The right of the corporation to demand payment is no less incontestable.
W/N officers of Peers Marketing Corporation can be
compelled by mandamus to enter in its stock and transfer book the sale made
No clear legal duty on the part of the officers of the
corporation to register the 20 shares in Nava's name - no cause of action for mandamus.
HELD: NO. Dismissal affirmed.
Baltazar case: partial payment = entitled to vote the said
shares although he has not paid the balance of his subscription and a call or demand had been made for the payment of the par value of the delinquent shares
No provision of the by-laws of the corporation covers that
situation
Thus, Ricardo Nava, to whom Teofilo Po transferred 20 of the
80 shares the latter subscribed but has not yet fully paid, and for which no certificate of stock has been issued, has no cause of action against the officers of the corporation for the recognition and recording of the transaction in the corporate books. The transfer of the shares to Nava is valid only between him and Po. Issuance of Certificate Once full payment for the stocks have been tendered to the corporation in any of the valid forms of consideration for the issuance of stocks, the purchaser or the subscribers entitled to be issued the corresponding certificate of stock which evidences their ownership of shares in a particular corporation Lost or Destroyed Certificate Sec. 73. Lost or destroyed certificates. The following procedure shall be followed for the issuance by a corporation of new certificate(s) of stock in lieu of those which have been lost, stolen or destroyed. 1. The registered owner of certificate(s) or his legal representative shall file with the corporation an affidavit in triplicate setting forth, if possible, the circumstances as to how the certificate(s) were stolen or destroyed, the number of shares represented by each certificate, the serial number (s) of the certificate(s) and the name of the corporation which issued the same. He shall also submit such other information and evidence which he may deem necessary; 2. After verifying the affidavit and other information and evidence with the books of the corporation, said corporation
shall publish a notice in a newspaper of general circulation
published in the place where the corporation has its principal office, once a week for three (3) consecutive weeks at the expense of the registered owner of the certificate(s) of stock which have been lost, stolen or destroyed. The notice shall state the name of said corporation, the name of the registered owner and the serial number(s) of said certificate(s), and the number of shares represented by such certificate(s), and that after the expiration of one (1) year from the date of the last publication, if no contest has been presented to said corporation regarding said certificate(s) of stock, the right to make such contest shall be barred and said corporation shall cancel in its books the certificate(s) of stock which have been lost, stolen or destroyed and issue in lieu thereof new certificate(s) of stock, unless the registered owner files a bond or other security in lieu thereof as may be required, running for a period of one (1) year for a sum and in such form and with such sureties as may be satisfactory to the board of directors, in which case a new certificate may be issued even before the expiration of one (1) year period provided herein; Provided, That if a contest has been presented to said corporation or if an action is pending in court regarding the ownership of said certificate(s) of stock which have been lost, stolen or destroyed, the issuance of the new certificate(s) of stock in lieu thereof shall be suspended until the final decision by the court regarding the ownership of said certificate(s) of stock which have been lost, stolen or destroyed. Except in case of fraud, bad faith, or negligence on the part of the corporation and its officers, no action may be brought against any corporation which shall have issued certificate(s) of stock in lieu of those lost, stolen or destroyed pursuant to the procedure above-described.