Title
British-American Engineering Corp. vs Alto Surety and Insurance Co., Inc.
Case
G.R. No. L-17009
Decision Date
Sep 13, 1966
Appellee sought stock certificates for shares allegedly purchased from Alto, but the Supreme Court ruled the claim had prescribed and shares were already issued to others.
Font Size:

Case Digest (G.R. No. L-17009)

Facts:

  1. Parties Involved:

    • Plaintiff and Appellee: British-American Engineering Corporation (hereinafter referred to as "appellee").
    • Defendants and Appellants: Alto Surety and Insurance Company, Inc. (hereinafter referred to as "Alto"), Antonio Quirino, and Aleli R. Guzman-Quirino, in their respective capacities as President and Secretary-Treasurer of Alto.
  2. Background of the Case:

    • On April 1, 1957, appellee filed a case in the Court of First Instance of Manila to compel Alto to issue certificates of stock corresponding to 2,500 shares of Alto's capital stock.
    • Appellee also sought a refund of P99,769.48, representing cash advances and payments made, with legal interest and attorney's fees.
  3. Appellee's Claims:

    • On April 1, 1947, appellee paid Alto P150,000 for 1,500 shares of its capital stock at P100 per share (Exhibit A).
    • On November 19, 1947, appellee paid Alto P100,084.42 for 1,000 shares of its capital stock at the same par value (Exhibit B).
    • Despite repeated demands, Alto failed to issue the corresponding stock certificates.
  4. Appellants' Defense:

    • Appellants argued that appellee's cause of action had prescribed.
    • They contended that Exhibits A and B did not represent the true agreement of the parties.
    • The amounts paid were allegedly for Antonio Quirino's share in the profits from a joint venture with appellee involving the importation and exportation of heavy equipment.
  5. Corporate Background:

    • Alto was formally incorporated on April 8, 1947.
    • One week prior to incorporation, Mrs. Quirino, as Secretary-Treasurer, issued a voucher (Exhibit A) acknowledging receipt of P150,000, which was credited to the original subscribers of Alto's capital stock.
    • On November 19, 1947, a similar voucher (Exhibit B) was issued for P100,000, also credited to the original subscribers.
  6. Stock Issuance:

    • Certificates for the initial 1,500 shares were issued in the names of the original subscribers.
    • Certificates for the additional 1,000 shares were issued in the name of the Quirino spouses.
  7. Joint Venture:

    • Nicolas Lynevitche, President and Managing Director of appellee, admitted to a joint venture with Antonio Quirino, which realized profits.
    • Appellee and Alto had close business dealings, including loans from Alto to appellee.
  8. Appellee's Inaction:

    • Appellee did not receive any stock certificates for its alleged investment in Alto.
    • Appellee made no inquiry or demand for stock certificates for nearly ten years.
    • The first demand was made on October 25, 1956, by Lynevitche, and by appellee on December 24, 1956.
    • The case was filed on April 1, 1957, the last day of the prescription period.

Issue:

  • (Unlock)

Ruling:

  • (Unlock)

Ratio:

  1. Prescription:

    • Appellee's inaction for nearly ten years, despite knowing that stock certificates were issued to others, indicated that its claim had prescribed.
  2. Stock Issuance:

    • The issuance of stock certificates to the original subscribers was valid, and Alto had no further obligation to issue additional certificates to appellee.
  3. Appellee's Right to Relief:

    • Appellee's claim, if valid, should have been directed against the Quirinos and other original subscribers, not Alto.
  4. Proper Parties:

    • The failure to include the Quirinos in their personal capacity and other original subscribers as parties to the case rendered the relief sought by appellee unattainable.

Conclusion:

The Supreme Court dismissed the case, ruling that appellee's claim had prescribed and that Alto had no obligation to issue additional stock certificates. Appellee's right to relief, if any, was against the parties in whose names the stock certificates were issued, not Alto.


Jur is an AI-powered legal research platform in the Philippines for case digests, summaries, and jurisprudence. AI-generated content may contain inaccuracies; please verify independently.