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.