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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:
When a stock certificate is endorsed in blank by the owner thereof, it constitutes what is termed as “street certificate”, so that upon its face, the holder is entitled to demand its transfer into his name from the issuing corporation. (Simny Guy, et al. v. Gilbert Guy, G.R. No. 189486, September 05, 2012)
A certificate of stock is an instrument formally issued by the corporation with the intention that the same constitutes the best evidence of the rights and status of a shareholder.
A stock certificate is the paper representative or tangible evidence of the stock itself and of the various interests therein. It is merely evidence of the interest of the holder in the corporation, and his ownership of the share represented thereby.
When a stock certificate is endorsed in blank by the owner thereof, it constitutes what is termed as “street certificate”, so that upon its face, the holder is entitled to demand its transfer into his name from the issuing corporation. (Simny Guy, et al. v. Gilbert Guy, G.R. No. 189486, September 05, 2012)
Stated otherwise, a street certificate is a stock certificate endorsed in blank by the owner thereof.
Upon its face, the holder is entitled to demand the transfer into his name from the issuing corporation. Such certificate is deemed quasi-negotiable, and as such, the transferee thereof is justified in believing that it belongs to the holder and transferor.
Jurisprudence provides that when a stock certificate is endorsed in blank by the owner thereof, it constitutes what is termed as “street certificate”, so that upon its face, the holder is entitled to demand its transfer into his name from the issuing corporation. (Simny Guy, et al. v. Gilbert Guy, G.R. No. 189486, September 05, 2012)
The Revised Corporation Code states:
“Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner, his attorney-in-fact, or any other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation showing the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates, and the number of shares transferred.” (Section 62, Revised Corporation Code)
However, the case of Simny Guy, et al. v. Gilbert Guy (G.R. No. 189486, September 05, 2012) holds that where stock certificates endorsed in blank were stolen from the possession of the beneficial owners thereof, the transfer void for lack of delivery and want of value.
Read also: Is a stock certificate a negotiable instrument?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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