8/6/2019 David Lao and Jose Lao v Dionisio Lao

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David Lao and Jose Lao v. Dionisio Lao

(Gador)

Nature: Petition for review on certiorari of the Amended Decision of the Court of Appeals

affirming the Decision of the Regional Trial Court

Facts:

1. David and Jose Lao filed a petition with the SEC against Dionisio (President of PFSC).They prayed for:a. To be declared as stockholders and directors of PFSCb. The issuance of certificates of shares in their namec. To be allowed to examine the corporate books of PFSC

2. David and Jose claimed that they are stockholders of PFSC based on the GeneralInformation Sheet filed with the SEC by PFSC wherein it was indicated in the General

Information Sheet that they were stockholders and directors of the PFSC.

3. David said that he inherited his shares while Jose said that he purchased the stocksdirectly from Dionisio.

4. Dionisio denied David and Joses claim. He said that the inclusion of the petitionersname in the General Information Sheet was inadvertently made.

5. Before the case was tried with the SEC, RA 8799 was enacted. This law transferred thejurisdiction on intra-corporate disputes from the SEC to the RTC. So pursuant to the law

the case was transferred to the RTC in Cebu.6. RTC ruled in favor of Dionisio on the ground that;

a. David and Jose have no stock certificates in their names.b. Their shares was not registered in the Stock and Transfer Book of the

Corporation

7. The CA, however, reversed the RTCs decision.8. Dionisio filed a motion for reconsideration with the CA. This motion was granted.

However, this time the justice who penned the previous CA decision inhibited himself

from deciding the case. Thus, a different justice penned the decision.

9. The CA then reversed its previous ruling. This time it ruled in favor of Dionisio.Issue: Is the fact that the name of Jose and David in the General Information Sheet that the PFSC

submitted to the SEC, recognized them as the stockholder of the corporation?

Held: No.1. Records show that petitioners have no certificates of stock in their name. A certificate of

stock is the evidence of a holders interest and status in a corporation.

a. It is a written instrument signed by the proper officer of a corporation statingand acknowledging that the person named in the document is the owner of a

designated number of shares of its stock.

b. It is a prima facie evidence that the holder is a shareholder of a corporation.2. Neither was there any written document with regards to the sale of stocks to the

petitioners.

a. Shares of stock so issued are personal property and may be transferred bydelivery of the certificate or certificates indorsed by the owner or his attorney-

in-fact or other person legally authorized to make the transfer. No transefer,

however, shall be valid, except as between the parties, until the transfer is

recorded in the books of the corporation so as to show the names of the parties to

the transaction, the date of transfer, the number of the certificate or certificatesand the number of shares transferred. (Sec. 63, Corporation Code)

3. In contrast, Dionision was able to prove that he is the owner of the disputed shares.4. While it may be true that David and Joses name were in the General Information Sheet,

this document alone does not conclusively prove that they are shareholders of PFSC. The

information in the document will still have to be correlated with the corporate books of

PFSC.

a. As between the General Information Sheet and Corporate Books, it is the latterthat is controlling.