Case Summary (G.R. No. 184332)
Petitioner and Respondent
- Petitioner: Anna Teng, in her capacity as corporate secretary of TCL.
- Respondent: Securities and Exchange Commission (SEC) and Ting Ping Lay.
Key Dates
- February 2, 1979; September 22, 1985; September 2, 1989: Dates of share acquisitions by Ting Ping Lay.
- July 20, 1994: SEC Hearing Officer’s decision granting mandamus relief.
- June 11, 1996: SEC en banc order modifying liability for damages.
- January 31, 1997: Court of Appeals dismissal of SEC en banc decision appeal.
- January 5, 2001: Supreme Court decision in G.R. No. 129777 affirming lower court rulings.
- August 9, 2006: SEC order granting alias writ of execution.
- April 29, 2008; August 28, 2008: Court of Appeals decision and resolution in CA-G.R. SP No. 99836 denying Teng’s petition to quash the writ.
- February 17, 2016: Supreme Court decision in the present petition.
Applicable Law
- 1987 Philippine Constitution
- Corporation Code, Section 63 (manner of transferring shares and issuance of certificates)
Factual Background
Ting Ping Lay acquired shares in TCL from three transferors: 480 shares from Peter Chiu (1979), 1,400 shares from Teng Ching Lay (1985), and 1,440 shares from Ismaelita Maluto (1989). He requested the corporate secretary, Anna Teng, to record these transfers in the Stock and Transfer Book and to issue new certificates of stock. They refused, prompting Ting Ping Lay to file a petition for mandamus with the SEC.
Procedural History
- SEC Hearing Officer (1994): Ordered TCL and Teng to record transfers, issue new certificates, and pay moral damages and attorney’s fees.
- SEC en banc (1996): Affirmed with modification, holding Teng solely liable for damages.
- Court of Appeals (1997): Dismissed appeal for lack of timeliness.
- Supreme Court (2001): Denied review and affirmed CA dismissal in G.R. No. 129777.
- RTC interpleader (2004–2005): Proceeding on ownership dispute over the 1,400 shares; partial decision in favor of Henry Teng.
- SEC alias writ of execution (2006): Enforced recording and issuance of certificates covering the 480 and 1,440 shares.
- CA in CA-G.R. SP No. 99836 (2008): Denied Teng’s petition to quash the alias writ.
- Present petition for certiorari under Rule 45 (2016).
Issue
Whether surrender of the original certificates of stock is a requisite condition before registering share transfers in the corporate books and issuing new certificates under Section 63 of the Corporation Code.
Ruling
The Supreme Court denied the petition. It affirmed the CA’s decision and ordered:
- Respondent Ting Ping Lay to surrender the original certificates covering Chiu’s and Maluto’s shares.
- Petitioner Anna Teng (or the incumbent corporate secretary) to cancel those certificates and issue new ones in Ting Ping Lay’s name, including shares not previously covered by any certificate.
Reasoning
- Nature of Stock Certificates: Certificates are merely tangible evidence of ownership; the shares themselves are personal property.
- Transfer under Section 63: Valid transfer requires (a) delivery of the certificate by transferor to transferee, (b) endorsement, and (c) recording in the corporate books. Surrender to the corporation is not a precondition for recording.
- Ministerial Duty: Recording transfers and issuing new certificates is a purely ministerial act; refusal without legal basis may be remedied by mandamus.
- Precedents:
- Fil-Estate Golf v. Vertex Sales (2013): Physical delivery to the transferee is essential.
- Rural Bank of Salinas v. CA (1992): Corporations cannot impose restrictions on transfers beyond Section 63; secretarial duties are ministerial.
- Surrender for Cancellation vs. Registration: While surrender of the old certificate is necessary before issuing a new one (to effect canc
Case Syllabus (G.R. No. 184332)
Facts
- Respondent Ting Ping Lay acquired shares of TCL Sales Corporation (TCL) as follows:
- 480 shares from Peter Chiu by Deed of Sale dated February 2, 1979
- 1,400 shares from his brother Teng Ching Lay by Deed of Sale dated September 22, 1985
- 1,440 shares from Ismaelita Maluto by Deed of Assignment dated September 2, 1989
- Upon Teng Ching’s death in 1989, his son Henry Teng assumed management of TCL.
- On August 31, 1989, Ting Ping requested corporate secretary Anna Teng to:
- Record the transfers in TCL’s Stock and Transfer Book
- Issue new certificates in his name
- Both TCL and Teng refused despite repeated demands.
- Ting Ping filed SEC Case No. 3900 (petition for mandamus) to compel registration and issuance of new certificates.
Procedural History
- July 20, 1994 (Hearing Officer’s Decision, SEC):
- Ordered recording of all acquired shares in TCL’s books
- Directed issuance of new certificates
- Awarded P100,000 moral damages and P50,000 attorney’s fees against TCL and Teng
- June 11, 1996 (SEC en banc Order):
- Affirmed the Decision with modification: Teng held solely liable for damages and fees
- January 31, 1997 (Court of Appeals, CA-G.R. SP No. 42035):
- Dismissed TCL and Teng’s petition for review as filed out of time
- January 5, 2001 (Supreme Court, G.R. No. 129777):
- Denied petition and affirmed CA’s Decision and Resolution
- Post-finality: SEC issued writ of execution; Teng filed Civil Case No. 02-102776 (interpleader) over the 1,400 shares
- March 13, 2003 (RTC Manila, Branch 46 Decision):
- Held Henry Teng had better right to the 1,400 shares except those under Certificate No. 011 (262.5 shares)
- August 9, 2006 (Ex parte SEC Order and alias writ):
- Granted partial enforcement of SEC’s July 20, 1994 Decision (as modified)
- May 25, 2007 (SEC Resolution):
- Denied Teng and TCL’s motions to quash the alias writ of execution
- April 29, 2008 (CA Decision, CA-G.R. SP No. 99836):
- Dismissed Teng