G.R. No. 112941 - NEUGENE MARKETING INC., LEONCIO TAN, NICANOR MARTIN, SONNY MORENO, JOHNSON LEE AND SECURITIES AND EXCHANGE COMMISSION, VS. COURT OF APPEALS, ARSENIO YANG, JR., CHARLES O. SY, LOK CHUN SUEN, BAN HUA U. FLORES, BAN HA U. CHUA AND ROGER REYES. D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, judgment is hereby rendered: 1. Declaring as null and void the Certificate of Filing of Resolution of Voluntary Dissolution of NEUGENE MARKETING, INC. issued by this Commission on March 1, 1988 for violation of Section 118 of the Corporation Code of the Philippines; 2. Ordering the respondents, particularly respondent Roger Z. Reyes or any other persons acting as trustees of NEUGENE from representing himself/themselves from acting as such; 3. Directing the respondents, particularly respondents Ban Ha U. Chua, Ban Hua U. Flores, Charles O. Sy and Arsenio Yang, Jr., or whoever is in possession of the corporate books and records of NEUGENE, to turn over the same to its Secretary, petitioner Sonny Moreno, within ten (10) days from the finality of this Decision; and to revert back to NEUGENE the Cash on Hand appearing in the Balance Sheet as of November 30, 1987 in the amount of P860,591.98; 4. Ordering the respondents to pay attorney's fees to the petitioners in the amount of FOUR HUNDRED THOUSAND PESOS (P400,000.00)." [6] x x x x x x x x x On June 10, 1993, the aforesaid judgment of SEC was reversed by the Court of Appeals. Upholding the validity of NEUGENE's dissolution, the Court of Appeals found that at the time of dissolution of NEUGENE on November 30, 1987, the private respondents owned at least two-thirds (2/3) of NEUGENE's stocks, it appearing that the certificates of stock of private respondents, which were endorsed in blank, as earlier mentioned, were not validly transferred to petitioners herein. The Court of Appeals ratiocinated and concluded: x x x x x x x x x To constitute a valid transfer, a stock certificate must be delivered and its delivery must be coupled with an intention of constituting the person to whom the stock is delivered the transferred (sic) thereof. (Fetcher Cyc Corp., Sec. 5484) Furthermore, in order that there is a valid transfer, the person to whom the stock certificates are endrosed (sic) must be a bona fide transferee and for value. In the case at bar, Nicanor Martin and Leoncio Tan were not bona fide transferees for value and in good faith. Private respondents alleged that petitioners Sy, Lok and Yang, Jr. indorsed and delivered their stock certificates to Nicanor Martin and Leoncio Tan. However, private respondents Johnson Lee testified that he acquired his shares of stock from Johnny Uy, who in turn sold them to Nicanor Martin and Leoncio Tan (tsn, pp., 49-50, July 18, 1989). Likewise, evidence shows that no consideration was paid by Leoncio Tan and Nicanor Martin when they allegedly acquired the stock certificates from the Uy Family. Johnson Lee failed to produce any document evidencing the transaction or a receipt showing his payment for the stocks. Therefore, it is clear that they were not bona fide transferees for value and in good faith. Consequently, they cannot be considered stockholders for the purpose of determining the 2/3 votes of the outstanding capital stock required to dissolve Neugene, i