NAVA V. PEERS MARKETING CORP.

G.R. No. L-28120 November 25, 1976

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.