7) The judgment of the Court approving the dissolution and
1. Stockholders of F. Guanson & Sons Inc. v. Register of Deeds
(Vi)
Oct. 30, 1962| Bautista Angelo, J. | Rights of stockholders & members
PETITIONER: STOCKHOLDERS OF F. GUANZON AND SONS, INC.
RESPONDENTS: REGISTER OF DEEDS OF MANILA (ROD)
SUMMARY: The 5 stockholders of F. Guanzon and Sons executed a
certificate of liquidation of assets of the corporation, dissolving it. They
claim that they should not pay the required fees that the ROD charged them
for a transfer or conveyance. They claim that it is just distribution of their
property. Issue: Whether it is a transfer – YES. The Court said that a
corporation is distinct from the members. The assets belong to the
corporation and not to the members directly. Therefore, if the stockholders
distribute the assets of the corporation among themselves, it is not merely a
distribution of something that is theirs but is a transfer of the assets of the
corporation to its stockholders. The stockholders then should pay and treat
it as a transfer not just distribution.
DOCTRINE: While shares constitute personal property, they are not the
property of the corporation. They are property of the stockholders to whom
issued, and they represent an aliquot part to share in its proceeds of the
liquidation of the corporation properties when distributed according to law
and equity. The stockholder is not a co-owner of corporate property, nor is
he entitled to any definite portion of its assets. (From the outline)
FACTS:
1. On September 19, 1960, the 5 stockholders of F. Guanzon and Sons,
Inc. executed a certificate of liquidation of the assets of the
corporation which stated that by a resolution adopted by the
stockholders on Sept.17, 1960, dissolving the corporation, they have
distributed among themselves in proportion to their shareholdings,
as liquidating dividends, the assets of said corporation, including
real properties located in Manila.
2. The certificate of liquidation, when presented to the Register of
Deeds of Manila (ROD), was denied registration on 7 grounds.
Among those, the stockholders disputed:
3) The number of parcels not certified to in the acknowledgment
5) P430.50 Reg. fees need be paid
6) P940.45 documentary stamps need be attached to the document
directing the disposition of the assets of the corporation need be
presented (Rule 104, Sec 3, RoC)
3. The Commissioner of Land Registration overruled ground No. 7 and
sustained requirements Nos. 3, 5 and 6.
4. Stockholders: They contend that the certificate of liquidation is not
a conveyance or transfer but merely a distribution of the assets of
the corporation which has ceased to exist (dissolved). This is shown
in the minutes of dissolution attached to the document. The
certificate does not need a statement of the numbers of parcels of
land involved in the distribution because it is not a conveyance.
Thus, the amount of documentary stamps should only be P0.30 and
not P940.45, as required by the ROD. It is also wrong to require
them to pay P430.50 as registration fee.
5. Commissioner of Land Registration: He concurred with the ROD
that the certificate of liquidation, though it involves a distribution of
the corporation's assets, in the last analysis represents a transfer of
said assets from the corporation to the stockholders. Hence, in
substance it is a transfer or conveyance.
ISSUE:
1. Whether the certificate of liquidation is merely a distribution of the
corporation assets or should be considered a transfer or conveyance
– IT IS A TRANSFER
RATIO:
1. A corporation is a juridical person distinct from the members
composing it. Properties registered in the name of the
corporation are owned by it as an entity separate and distinct
from its members. While shares of stock constitute personal
property, they do not represent property of the corporation. The
corporation has property of its own which consists chiefly of real
estate. A share of stock only typifies an aliquot part of the
corporation's property, or the right to share in its proceeds to
that extent when distributed according to law and equity, but its
holder is not the owner of any part of the capital of the
corporation. Nor is he entitled to the possession of any definite
portion of its property or assets. The stockholder is not a co-
owner or tenant in common of the corporate property.
2. It is clear that the act of liquidation made by the stockholders of the
assets is not a partition of community property, but rather a
transfer or conveyance of the title of its assets to the individual
stockholders. Since the purpose of the liquidation and distribution
of the assets of the corporation is to transfer their title from the
corporation to the stockholders in proportion to their
shareholdings, that transfer cannot be effected without the
corresponding deed of conveyance from the corporation to the
stockholders. It is, therefore, fair and logical to consider the
certificate of liquidation as one in the nature of a transfer or
conveyance.