Case Summary (G.R. No. L-4818)
Factual Background
The plaintiffs claim that De los Santos purchased 500,000 shares from Juan Campos and 300,000 shares from Carl Hess, followed by a purchase of 800,000 shares from Hess for Astraquillo's benefit, all during December 1942. A vesting order dated February 18, 1945, designated these shares as property of the Alien Property Custodian as Japanese property. However, the claims of the plaintiffs were initially approved but later reversed by the Philippine Alien Property Administrator, which led to the current action.
Legal Issues and Initial Court Findings
The plaintiffs sought a declaration of ownership, as well as the recovery of dividends and rights associated with the shares. The defendant contested the claim, arguing that the shares belonged to the Mitsui Bussan Kaisha. The Court of First Instance of Manila subsequently ruled in favor of the plaintiffs, declaring them as the absolute owners of the shares and nullifying the transfer of ownership made in favor of the Alien Property Custodian.
Appellants' Arguments and Evidence
On appeal, the main issue was whether the plaintiffs had validly purchased the shares. The appellants presented testimony from Vicente Madrigal, who claimed he acted as a trustee for the Mitsuis, and stated that he had delivered the stock certificates to them prior to the war. Several witnesses corroborated this defense, stating that the stock certificates had been kept securely until their alleged looting during the liberation of Manila.
Plaintiffs' Evidence and Testimony
To support their claims, the plaintiffs presented their testimonies, supplemented by evidence from third parties like Primitivo Javier and Leonardo Recio, regarding their alleged purchases of the shares. However, much of their evidence relied heavily on the plaintiffs' oral accounts, as the original sellers, Campos and Hess, were deceased.
Evaluation of Credibility
The lower court found the defense's evidence inherently improbable. However, the appellate court scrutinized if the trial court had correctly assessed the credibility of the witnesses. It noted that the burden of proof lay squarely on the plaintiffs, meaning that mere improbabilities in the defense’s testimony would not suffice to undermine the defense’s position.
Legal Standards on Transfer of Stock
The court referenced Section 35 of the Corporation Law, which stipulates the requirements for transferring stock, including the necessity for such transfers to be noted in the corporation's books. Thus, since no such entry had been made for the alleged transfers from Campos and Hess, the transfers could not be deemed valid against the registered owners.
The Court's Decision
The appellate court ultimately concluded that the plaintiffs had failed to establish their claim by a preponderance of the evidence. As the shares were registered under Madrigal in trust for the Mitsuis, the plaintiffs could not acquire better title than what their supposed vendors held. The ruling from the lower court was reversed, with the appeal dismissed and costs imposed on the plaintiffs.
Dis
...continue readingCase Syllabus (G.R. No. L-4818)
Case Overview
- This case revolves around the title to 1,600,000 shares of stock in the Lepanto Consolidated Mining Co., Inc.
- Plaintiffs, Apolinario G. De Los Santos and Isabelo Astraquillo, claim ownership of the shares, with De Los Santos asserting he purchased 500,000 shares from Juan Campos and 1,300,000 shares from Carl Hess in December 1942.
- The shares were initially registered in the name of Vicente Madrigal, who had blank endorsements on the back of the stock certificates.
- The shares were claimed as Japanese property and vested in the Alien Property Custodian of the U.S. through a vesting order in 1945.
- The Philippine Alien Property Administration allowed the claims of the plaintiffs but was later reversed by the Administrator, leading to the current action.
Plaintiffs' Claims
- De Los Santos alleges he purchased shares from Campos and Hess at a price of P0.06 each.
- Astraquillo claims to have acquired shares through De Los Santos for his own account.
- The plaintiffs seek a court declaration of ownership, the transfer of shares to their names, and payment of costs.
- The plaintiffs argue that they are the rightful owners of the shares, which have accrued dividends and other rights.
Defendant's Position
- The defendant, J. Howard McGrath, argues that the shares were purchased by Vicente Madrigal in trust for Mitsui Bussan Kaisha (Mitsuis), a Japanese corporation.
- The defense maintains that Madrigal delivered the stock certificates to Mitsuis before the war, and the shares were not sold or disposed of.
- The defendant seeks to uphold the vesting order, asserting that the shares should remain under the Philippine Alien Property Administration.
Evidence and Testimonies
Defendant's Evidence:
- Vicent