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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
No. In Philippine jurisprudence, a certificate of stock is not a negotiable instrument. “Although it is sometime regarded as quasi-negotiable, in the sense that it may be transferred by endorsement, coupled with delivery, it is well-settled that it is non-negotiable, because the holder thereof takes it without prejudice to such rights or defenses as the registered owners or transferor’s creditor may have under the law, except insofar as such rights or defenses are subject to the limitations imposed by the principles governing estoppel.” (De los Santos vs. McGrath, 96 Phil. 577)
A certificate of stock is the paper representative or tangible evidence of the stock itself and of the various interests therein. The certificate is not stock in the corporation but is merely evidence of the holder’s interest and status in the corporation, his ownership of the share represented thereby, but is not in law the equivalent of such ownership. It expresses the contract between the corporation and the stockholder, but it is not essential to the existence of a share in stock or the creation of the relation of shareholder to the corporation. (13 Am. Jur. 2d, 769)||| (Tan v. Securities and Exchange Commission, G.R. No. 95696, [March 3, 1992], 283 PHIL 692-706)
Jurisprudence provides that –
In Philippine jurisprudence, a certificate of stock is not a negotiable instrument. “Although it is sometime regarded as quasi-negotiable, in the sense that it may be transferred by endorsement, coupled with delivery, it is well-settled that it is non-negotiable, because the holder thereof takes it without prejudice to such rights or defenses as the registered owners or transferor’s creditor may have under the law, except insofar as such rights or defenses are subject to the limitations imposed by the principles governing estoppel.” (De los Santos vs. McGrath, 96 Phil. 577)
A by-law which prohibits a transfer of stock without the consent or approval of all the stockholders or of the president or board of directors is illegal as constituting undue limitation on the right of ownership and in restraint of trade. (Fleisher v. Botica Nolasco, Co., Inc. 47 Phil. 583)
Read also: What is the procedure for the issuance of lost stock certificates?
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