Case Digest (G.R. No. 90888)
Facts:
The case involves Fructuoso R. Capco as the petitioner and Manuel R. Macasaet and Jacobo Feliciano as the respondents. The events leading to this case began on February 18, 1976, when Capco, a stockholder, director, and executive vice-president of Monte Oro Mineral Resources, Inc. (Monte Oro), delivered two stock certificates to Macasaet, the board chairman and president of the company. The stock certificates, totaling 56,588,358 shares, were acknowledged by Macasaet in a receipt stating that he received them in trust and for safekeeping, to be returned upon demand. On April 26, 1976, Capco demanded the return of his stock certificates, but Macasaet failed to produce them, claiming he had given them to Feliciano for a joint venture. Subsequently, Macasaet replaced one of Capco's stock certificates with his own, which covered more shares. Capco later received one of his stock certificates back on May 4, 1976, with a handwritten note stating "all cleared."
On A...
Case Digest (G.R. No. 90888)
Facts:
Background of the Case
- The petitioner, Fructuoso R. Capco, was a stockholder, director, and executive vice-president of Monte Oro Mineral Resources, Inc. (Monte Oro), a mining company whose shares were traded in the stock market.
- He owned 56,588,358 shares of Monte Oro, evidenced by Stock Certificate Nos. 002 and 026.
Delivery of Stock Certificates
- On February 18, 1976, Capco indorsed and delivered Stock Certificate Nos. 002 and 026 to private respondent Manuel Macasaet, the board chairman and president of Monte Oro.
- Macasaet signed an Acknowledgment Receipt, stating that the certificates were received "in trust and for safekeeping only" and were to be returned to Capco or his heirs upon demand.
Demand for Return and Replacement
- On April 26, 1976, Capco demanded the return of his stock certificates. Macasaet failed to produce them, as he had given them to Jacobo Feliciano, another officer of Monte Oro, for a contemplated joint venture.
- On April 28, 1976, Macasaet replaced Capco’s Stock Certificate No. 026 with his own Stock Certificate No. 025, covering 42,578,700 shares (149,925 shares more than Capco’s original certificate).
- On May 4, 1976, Macasaet returned Stock Certificate No. 002 to Capco, who acknowledged receipt with a handwritten notation stating "all cleared."
Filing of the Complaint
- On August 12, 1976, Capco filed a complaint for damages against Macasaet and Feliciano, alleging:
- He had a ready buyer for his shares at P0.014 per share, but due to the respondents' failure to return the certificates, he lost P306,115.25 in unrealized profits.
- He sought actual, moral, and exemplary damages, as well as attorney’s fees.
Trial Court Decision
- The trial court ruled in favor of Capco, awarding him:
- P302,658.20 as actual damages,
- P100,000.00 as moral damages,
- P50,000.00 as exemplary damages, and
- P50,000.00 as attorney’s fees and litigation expenses.
- The court dismissed the complaint and counterclaims against Feliciano.
Court of Appeals Decision
- On appeal, the Court of Appeals reversed the trial court’s decision, dismissing Capco’s complaint and the counterclaims, citing lack of merit and supporting proof.
Issue:
- Whether the Court of Appeals erred in interpreting the notation "all cleared" on the acknowledgment receipt as discharging Macasaet from liability for both Stock Certificate Nos. 002 and 026.
- Whether the Court of Appeals erred in disregarding the Acknowledgment Receipt as a voluntary contract of trust.
- Whether the Court of Appeals erred in clearing Macasaet of liability for damages suffered by Capco.
- Whether the Court of Appeals erred in concluding that there was insufficient evidence to support Capco’s claim for damages.
Ruling:
- The Supreme Court dismissed Capco’s petition and affirmed the decision of the Court of Appeals.
- The Court held that:
- The notation "all cleared" on the acknowledgment receipt discharged Macasaet from liability regarding the stock certificates.
- The indorsement of the stock certificates in blank conferred on Macasaet the right to hold them as though they were his own, despite the Acknowledgment Receipt.
- Capco failed to provide substantial evidence to support his claim for unrealized profits and damages.
- Moral and exemplary damages could not be awarded in the absence of malice or bad faith.
Ratio:
Indorsement of Stock Certificates in Blank:
- Stock certificates are quasi-negotiable instruments. When indorsed in blank, they confer on the holder all indicia of ownership, even if delivered for safekeeping.
- Capco’s act of indorsing the certificates in blank allowed Macasaet to treat them as his own, despite the Acknowledgment Receipt.
Discharge of Liability:
- The notation "all cleared" on the acknowledgment receipt indicated that Capco had no further claims against Macasaet regarding the stock certificates.
- This notation was interpreted as a discharge of liability, especially since Capco accepted the replacement certificate and returned Stock Certificate No. 002 without objection.
Burden of Proof for Damages:
- Claims for actual or compensatory damages must be supported by substantial and convincing evidence.
- Capco’s claim of unrealized profits was speculative and lacked evidentiary support, as there was no proof of a ready buyer or a binding agreement to sell the shares.
Moral and Exemplary Damages:
- Moral and exemplary damages cannot be awarded in the absence of malice, bad faith, or any of the grounds enumerated in the Civil Code.
- Macasaet acted in good faith by replacing the missing certificate with one of higher value and returning the other certificate promptly.
Finality of Appellate Court Findings:
- The findings of fact by the Court of Appeals are deemed final and conclusive if supported by substantial evidence.
- The Supreme Court found no reversible error in the appellate court’s decision and upheld its ruling.
Concurring Opinion (Justice Feliciano)
- Justice Feliciano concurred with the result but noted that the Acknowledgment Receipt’s restrictive language ("for safekeeping only") qualified the indorsement in blank.
- He suggested that the arrangement had both fiduciary and practical utility, allowing Capco to retain control over the certificates while facilitating their transferability if needed.