G.R. No. L-28120 - Nava vs. Peers Marketing Corp.

Teofilo Po, an incorporator of Peers Marketing Corporation, subscribed to eighty shares at one hundred pesos per share, amounting to a total subscription of eight thousand pesos.
Po made a partial payment of two thousand pesos (25% of his total subscription), leaving an outstanding balance of six thousand pesos.
No certificate of stock was issued to Po or any other subscriber, incorporator, or stockholder.

On April 2, 1966, Po sold twenty of his eighty subscribed shares to Ricardo A. Nava for two thousand pesos.
In his deed of sale, Po represented himself as the "absolute and registered owner" of those twenty shares.
Nava subsequently requested that the corporation register the sale in its stock and transfer book; however, this request was denied on the ground that Po’s subscription had not been fully paid.

The corporation had an unpaid claim on the entire subscription of eighty shares due to Po’s delinquent balance of six thousand pesos.
The respondents (the corporation and its officers) maintained that no shares subject to any unpaid claim could be transferred in the corporate books as per existing practices and legal provisions.
The corporation's by-laws, though not submitted or specifically invoked in evidence, were understood to provide that only shares without any unpaid claim (i.e., that have been fully paid) could be validly transferred.

On December 21, 1966, Nava filed a mandamus action in the Court of First Instance of Negros Occidental, Bacolod City Branch.
The petition sought to compel the corporation and its designated officers (Renato R. Cusi and Amparo Cusi) to register the twenty shares in the transfer book in Nava’s name.
The trial court dismissed the petition, basing its decision on the premise that the shares, being subject to an unpaid claim, were not eligible for transfer in the corporate records.

Nava appealed the trial court’s decision, contending that it erroneously relied on the ruling in Fua Cun vs. Summers and China Banking Corporation, 44 Phil. 705.
He argued that under section 37 of the Corporation Law (formerly section 36 before amendment by Act No. 3518), partial payment should not preclude the issuance of a certificate of stock for the shares paid for.
Nava maintained that even if Po had not fully paid his subscription, the twenty shares for which the par value had been paid should be registered in his name.

Whether the officers of Peers Marketing Corporation can be compelled by mandamus to record in the corporation’s stock and transfer book the twenty shares sold by Po to Nava, despite an existing unpaid balance on the overall subscription.

Whether the payment of only a partial subscription (twenty-five percent in this case) entitles the subscriber to obtain a stock certificate for any portion of the subscribed shares.
Whether section 37 of the Corporation Law permits the issuance of a certificate for shares that have been paid for in part while the overall subscription remains unpaid.
Whether the absence of a stock certificate for the twenty shares precludes their transfer in the corporate records.
The applicability and relevance of the precedent (Fua Cun vs. Summers and China Banking Corporation) in justifying the refusal to record the transfer.