Case Summary (G.R. No. 139802)
Procedural History
- January 25, 1996 – Ponce filed an SEC complaint for mandamus and damages.
- February 29, 1996 – SEC Hearing Officer granted respondents’ motion to dismiss for failure to state a cause of action, non-joinder of the real party in interest, prescription and laches.
- January 6, 1997 – SEC En Banc reversed and directed further proceedings.
- SEC motion for reconsideration denied.
- Court of Appeals (CA) in CA-G.R. SP No. 46692 set aside the SEC En Banc decision and reinstated the dismissal.
- August 10, 1999 – CA denied petition for reconsideration.
- Petitioner elevated the matter to the Supreme Court by petition for review on certiorari.
Applicable Law and Constitutional Basis
• Constitution: 1987 Philippine Constitution (case decided December 10, 2002).
• Corporation Code (Batas Pambansa Blg. 68):
– Section 63 requires that any transfer of shares, to be valid against the corporation, must be recorded in the corporate books showing parties, date, certificate numbers, and number of shares.
– Section 64 limits issuance of certificates to fully paid subscriptions.
Issue Presented
Whether Ponce stated a valid cause of action for a writ of mandamus compelling the corporate secretary to record the transfer of shares and issue stock certificates in his name despite no prior registration of the transfer in Alsons Cement Corporation’s stock and transfer book.
Supreme Court’s Analysis
- Section 63’s plain text makes an unrecorded transfer “non-existent” as far as the corporation is concerned; the corporation looks solely to its books to determine its stockholders and has no duty to issue certificates to unrecorded transferees.
- A petition for mandamus requires a clear, indisputable duty on the part of the respondent. By failing to allege that the transfer was ever recorded or that he held a power of attorney or express instructions from Gaid, Ponce omitted essential elements of his cause of action.
- In Hager v. Bryan (1911) and Rivera v. Florendo (1986), the Court held that mere indorsement without recorded transfer or authority does not justify mandamus. Rural Bank of Salinas (1992) is distinguishable because the transferee there presented a valid power of attorney from the registered owner.
- Jurisdictional precedents (e.g., Abejo v. De la Cruz) addre
Case Syllabus (G.R. No. 139802)
Facts
- In January 1996, Vicente C. Ponce filed with the Securities and Exchange Commission (SEC) a complaint for mandamus and damages against Alsons Cement Corporation (ACC) and its corporate secretary, Francisco M. Giron, Jr.
- Ponce alleged that Fausto G. Gaid, an original incorporator of Victory Cement Corporation (later FCC, then ACC), had subscribed to and fully paid for 239,500 shares, and by a Deed of Undertaking and Indorsement dated February 8, 1968, assigned those shares to Ponce.
- No stock certificates were ever issued in the name of Gaid or Ponce despite repeated demands.
- Ponce prayed that respondents be ordered to issue certificates covering the 239,500 shares and to pay damages.
Procedural History
- Respondents moved to dismiss, arguing: no cause of action; mandamus improper; Ponce not real party in interest; prescription; laches; and absence of registration of transfer in corporation’s books.
- SEC Hearing Officer Flores granted the motion to dismiss (Feb. 29, 1996), holding that no assignment or transfer was recorded in ACC’s books and Ponce lacked authority from Gaid.
- Ponce appealed to the SEC En Banc. On January 6, 1997, the En Banc reversed and directed the hearing officer to proceed, invoking Abejo v. De la Cruz on SEC’s jurisdiction over unregistered stock transfers.
- Respondents filed a motion for reconsideration, which was denied.
- They then appealed to the Court of Appeals (CA), which reinstated the dismissal for failure to allege registration of transfer in ACC’s stock and transfer book.
- Ponce’s motion for reconsideration before the CA was denied on August 10, 1999.
- Ponce filed a petition for review on certiorari before the Supreme Court, challenging the CA’s holding on cause of action and its reliance on Section 63 of the Corporation Code and earlier jurisprudence.
Issues
- Whether the CA erred in ruling that Ponce’s complaint for mandamus failed to state a cause of action because it did not allege registration of the share transfer in ACC’s stock and tran