Teng V Sec GR No. 184332 February 17, 2016 Facts

TENG v SEC liberty to dispose of them in favor of whomsoever he pleases, without any other
GR No. 184332 limitation in this respect, than the general provisions of law.
February 17, 2016
Under the provision, certain minimum requisites must be complied with for there to
FACTS: be a valid transfer of stocks, to wit: (a) there must be delivery of the stock certificate;
This case has its origin in G.R. No. 129777 entitled TCL Sales Corporation and Anna (b) the certificate must be endorsed by the owner or his attorney-in-fact or other
Teng v. Hon. Court of Appeals and Ting Ping Lay. Herein respondent Ting Ping persons legally authorized to make the transfer; and (c) to be valid against third
purchased 480 shares of TCL Sales Corporation (TCL) from Peter Chiu (Chiu) on parties, the transfer must be recorded in the books of the corporation.
February 2, 1979; 1,400 shares on September 22, 1985 from his brother Teng Ching
Lay (Teng Ching), who was also the president and operations manager of TCL; and It is the delivery of the certificate, coupled with the endorsement by the owner or
1,440 shares from Ismaelita Maluto (Maluto) on September 2, 1989. his duly authorized representative that is the operative act of transfer of shares from
the original owner to the transferee
Upon Teng Ching's death in 1989, his son Henry Teng (Henry) took over the
management of TCL. To protect his shareholdings with TCL, Ting Ping on August 31, The delivery contemplated in Section 63, however, pertains to the delivery of the
1989 requested TCL's Corporate Secretary, herein petitioner Teng, to enter the certificate of shares by the transferor to the transferee, that is, from the original
transfer in the Stock and Transfer Book of TCL for the proper recording of his stockholder named in the certificate to the person or entity the stockholder was
acquisition. Lie also demanded the issuance of new certificates of stock in his favor. transferring the shares to, whether by sale or some other valid form of absolute
TCL and Teng, however, refused despite repeated demands. Because of their refusal, conveyance of ownership. "[S]hares of stock may be transferred by delivery to the
Ting Ping filed a petition for mandamus with the SEC against TCL and Teng transferee of the certificate properly indorsed. Title may be vested in the transferee
by the delivery of the duly indorsed certificate of stock."
ISSUE: W/N the surrender of the certificates of stock is a requisite before registration
of the transfer be made in the corporate books and for the issuance of new It is thus clear that Teng's position - that Ting Ping must first surrender Chiu's and
certificates? Maluto's respective certificates of stock before the transfer to Ting Ping may be
registered in the books of the corporation -does not have legal basis. The delivery or
HELD: A certificate of stock is a written instrument signed by the proper officer of a surrender adverted to by Teng, i.e., from Ting Ping to TCL, is not a requisite before
corporation stating or acknowledging that the person named in the document is the the conveyance may be recorded in its books. To compel Ting Ping to deliver to the
owner of a designated number of shares of its stock. It is prima facie evidence that corporation the certificates as a condition for the registration of the transfer would
the holder is a shareholder of a corporation. A certificate, however, is merely a amount to a restriction on the right of Ting Ping to have the stocks transferred to his
tangible evidence of ownership of shares of stock. It is not a stock in the corporation name, which is not sanctioned by law. The only limitation imposed by Section 63 is
and merely expresses the contract between the corporation and the when the corporation holds any unpaid claim against the shares intended to be
stockholder. The shares of stock evidenced by said certificates, meanwhile, are transferred.
regarded as property and the owner of such shares may, as a general rule, dispose
of them as he sees fit, unless the corporation has been dissolved, or unless the right In the same vein, Teng cannot refuse registration of the transfer on the pretext that
to do so is properly restricted, or the owner's privilege of disposing of his shares has the photocopies of Maluto's certificates of stock submitted by Ting Ping covered only
been hampered by his own action. 1,305 shares and not 1,440. As earlier stated, the respective duties of the
corporation and its secretary to transfer stock are purely ministerial.
Section 63 of the Corporation Code prescribes the manner by which a share of stock
may be transferred. Said provision is essentially the same as Section 35 of the old
Corporation Law, which, as held in Fleisher v. Botica Nolasco Co., defines the nature,
character and transferability of shares of stock. Fleisher also stated that the
provision on the transfer of shares of stocks contemplates no restriction as to whom
they may be transferred or sold. As owner of personal property, a shareholder is at

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