G.R. No. 154069, June 6, 2016
Oceanic Inc. entered into a subscription agreement with R.C. Lee covering 5M of its shares. R.C. Lee paid 25% of the subscription, leaving 75% unpaid. Consequently, Oceanic issued five subscription agreements to R.C. Lee.
Oceanic merged with Interport, with the latter as the surviving corporation. Under the terms of the merger, each share of Oceanic was exchanged for a share of Interport. SSI received through stock assignment, five Oceanic Subscription Agreements, indorsed in blank by R.C. Lee. Later on, R.C. Lee requested Interport for a list of subscription agreements and stock certificates issued in the name of R.C. Lee and other individuals named in the request.
Upon finding no records showing any transfer or assignment of the Oceanic subscription agreements and stock certificates of Interport as contained in the list, R.C. Lee paid its unpaid subscriptions and was accordingly issued stock certificates corresponding thereto. SSI however tendered payment for the balance of the 5M shares covered by the Oceanic Subscription Agreements. Interport refused to honor the Oceanic subscriptions and rejected tender of payment.
Whether Interport was liable to deliver to SSI the Oceanic shares of stock.
Yes. The assignment of the subscription agreements is a form of novation by substitution of a new debtor and which required the consent of or notice to the creditor. In this case, the change of debtor took place when R.C. Lee assigned subscription agreements to SSI so that the latter became obliged to settle the 75% unpaid balance on the subscription. Interport was duly notified of the assignment when SSI tendered its payment. The effect of the assignment of the subscription agreements is that Interport was no longer obliged to accept any payment from R.C. Lee.
The statutory rule that, no transfer of shares of stock shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation so as to show 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 cannot be strictly applied herein, however, because Interport had unduly refused to recognize the assignment of the shares between R.C. Lee and SSI. The subscription agreements were now binding between Interport and SSI only, and only such parties were expected to comply with the terms thereof.
*Case Digest by Rezeile S. Morandarte, Refresher, Andres Bonifacio College, SY 2019 – 2020