RAZON V. INTERMEDIATE APPELLATE COURT
[CHUIDIAN]
FACTS:
1. Enrique Razon organized the E. Razon, Inc. for the purpose of bidding for
the arrastre services in South Harbor, Manila.
2. The business, however, did not start operations based on the original
schedule causing some of the incorporators to withdraw from the
corporation. Enrique Razon then distributed the stocks previously placed
in the names of the withdrawing nominal incorporators to some friends,
among them, is Juan Chuidian, to whom Razon gave 1,500 shares of
stock.
3. The shares of stock were then registered in the name of Chuidian only as
nominal stockholder and with the agreement that the aid shares of stock
were owned and held by the petitioner but Chuidian was given the option
to buy the same.
4. In view of this arrangement, Chuidian delivered to Razon the stock
certificate covering the 1,500 shares of stock. Since then, Razon had in his
possession the said certificate until the time, he delivered it for deposit
with the Philippine Bank of Commerce under the parties’ joint custody
pursuant to their agreement.
5. Petitioner Vicente B. Chuidian, as the administrator of the intestate-
estate proceedings of Juan Chuidian, prayed that defendants Razon et. Al.
be ordered to deliver certificates of stocks representing the shareholding
of the deceased Juan T. Chuidian in the E.Razon, Inc and to restrain them
from disposing of the same.
6. RTC: ruled for E. Razon as the owner of the said shares of stock.
7. CA: reversed, ruling in favor of Chuidian as the rightful owner of the said
shares of stock.
8. Razon now comes to the Court.
ISSUES:
1. Who between Razon and Chuidian is the rightful owner of the 1,500
CLEMENTE
shares of stock in the E. Razon, Inc.
2. W/N the CASH AND STOCK DIVIDENDS and ALL THE PRE-EMPTIVE RIGHTS
are also owned by Chuidian? [YES]
HELD 1:
GENERAL RULE: The ruling in the case of Nava v. Peers Marketing Corporation
points out that for an effective transfer of shares of stock, the mode and manner of
transfer as prescribed by law must be followed. The Corporation Code provides
that shares of stock may be transferred by delivery to the transferee of the
certificate properly indorsed. Title may be vested in the transferee by delivery of
the duly indorsed certificate of stock.
EXCEPTION: No transfer shall be valid except as between the parties until the
transfer s properly recorded in the books of the corporation.
APPLICATION TO THE CASE:
● In order for Razon to prove ownership of the said shares, he must show
that the same were transferred to him in accordance with the
corporation’s by-laws and in accordance with the Corporation Code. He
failed to present any by-laws which could show that he owned the said
shares of stock nor were they validly transferred to him.
● In fact, he had failed to overcome the following pieces of evidence that
were gathered during the trial:
o The questioned shared of stock are in the name of the late Juan
Chuidian in the books of the corporation;
o During Chuidian’s lifetime, he was a member of the Board of
Directors which signified that he was a stockholder of the
corporation;
o The said certificate of stock was never indorsed to Razon.
HELD 2:
● The rights of stockholders are generally enumerated as follows:
1. To have a certificate or other evidence of his status as stockholder
issued to him.
2. To vote at meetings of the corporation.
3. To participate proportionately in the distribution of the corporate
assets upon the dissolution or winding up.

CLEMENTE