Uson v Diosomito (1935)
Topic: Unregistered transfer of shares of stock
Doctrine: The right of the owner of the shares of stock of a Philippine
corporation to transfer the same by delivery of the certificate, whether it be
regarded as statutory or common law right, is limited and restricted by the
express provision that "no transfer, however, shall be valid, except as
between the parties, until the transfer is entered and noted upon the books of
the corporation." Therefore, an attachment lien prevails over a prior
unregistered bona fide stock transfer.
Facts: (Dates are relevant in this case)
• Toribia Uson filed a civil action for debt against Vicente Dioisomito
• Jan 18, 1932 - An attachment was issued and D’s property was
levied including 75 shares of the North Electric Co., which is in his
(Diosomito) name on the books of the company when the attachment
was levied
• June 23, 1932 - in that civil case, Uson obtained a judgment against
D for the sum of P2,300
• March 20, 1933 - the sheriff sold the shares at a public auction to
satisfy the judgment to which Uson was the higest bidder and shares
were adjudicated to her
• HPL Jollyee now claims that she is the owner of the 75 shares and
presented a certificate of stock issued by the company on Feb 13,
1933
Evaluation of the facts before the lower court then showed:
1. Diosmito was the original owner of the shares
2. Feb. 3, 1931 - he sold it to Barcelon and delivered the certificates
3. Sep. 16 1932 - Barcelon presented the certificates to the company for
registration
4. Feb 13, 1933 - HPL Jollyee was issued a new certificate because it
registered such after Barcelon sold it to the former
In short, the transfer of the shares from Diosomito to Bareclon was registered
and noted on the books of the corporation only 9 MONTHS AFTER the
attachment had been levied on the same 75 shares
ISSUE:
• Whether or not a bona fide transfer of the shares of a corporation, not
registered or noted on the books of the corporation, is valid as
against a subsequent lawful attachment of said shares, regardless of
whether the attaching creditor had actual notice of said transfer or
not? NO.
HELD:
Under Sec 25 of the Corporation Law it states that:
“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.”
Hence, all transfers of shares should be entered on the books of the
corporation. And all transfers of shares not entered are invalid as to:
a. attaching or execution creditors of the assignors
b. corporation
c. subsequent purchasers in good faith
d. all persons interested
o With the exception of the parties directly involved in that
transfer.
• And all transfers not entered on the books of the corporation are void
because they are made so void by statute and NOT BECAUSE the
transfer are without notice or fraudulent in law or fact
Ø And in this case, the transfer of 75 shares in the North Electric
Company made by Diosomito to Barcelon was not valid as to Uson
on Jan. 18, 1932 (date on which she obtained her attachment line on
shares of still) because it still stood in the name of Diosomito on the
books of corporation.
Ø And because that transfer to Barcelon was not valid, the subsequent
transfer to HPL Jollyee was also not valid as to Uson.