Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=53009:gr-177066-2009&catid=1522&Itemid=566
Timestamp: 2019-04-26 12:22:31+00:00

Document:
JOSELITO MUSNI PUNO (as heir of the late Carlos Puno), Petitioner, v. PUNO ENTERPRISES, INC., represented by JESUSA PUNO, Respondent.
Upon the death of a stockholder, the heirs do not automatically become stockholders of the corporation; neither are they mandatorily entitled to the rights and privileges of a stockholder. This, we declare in this Petition for Review on Certiorari of the Court of Appeals (CA) Decision1 dated October 11, 2006 and Resolution dated March 6, 2007 in CA-G.R. CV No. 86137.
Respondent filed a motion to dismiss on the ground that petitioner did not have the legal personality to sue because his birth certificate names him as "Joselito Musni Muno." Apropos, there was yet a need for a judicial declaration that "Joselito Musni Puno" and "Joselito Musni Muno" were one and the same.
The court ordered that the proceedings be held in abeyance, ratiocinating that petitioner's certificate of live birth was no proof of his paternity and relation to Carlos L. Puno.
WHEREFORE, judgment is hereby rendered ordering Jesusa Puno and/or Felicidad Fermin to allow the plaintiff to inspect the corporate books and records of the company from 1962 up to the present including the financial statements of the corporation.
The costs of copying shall be shouldered by the plaintiff. Any expenses to be incurred by the defendant to be able to comply with this order shall be the subject of a bill of costs.
Petitioner's motion for reconsideration was denied by the CA in its Resolution6 dated March 6, 2007.
I. THE HONORABLE COURT OF APPEALS ERRED IN NOT RULING THAT THE JOSELITO PUNO IS ENTITLED TO THE RELIEFS DEMANDED HE BEING THE HEIR OF THE LATE CARLOS PUNO, ONE OF THE INCORPORATORS [OF] RESPONDENT CORPORATION.
II. HONORABLE COURT OF APPEALS ERRED IN RULING THAT FILIATION OF JOSELITO PUNO, THE PETITIONER[,] IS NOT DULY PROVEN OR ESTABLISHED.
III. THE HONORABLE COURT ERRED IN NOT RULING THAT JOSELITO MUNO AND JOSELITO PUNO REFERS TO THE ONE AND THE SAME PERSON.
IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT RULING THAT WHAT RESPONDENT MERELY DISPUTES IS THE SURNAME OF THE PETITIONER WHICH WAS MISSPELLED AND THE FACTUAL ALLEGATION E.G. RIGHTS OF PETITIONER AS HEIR OF CARLOS PUNO ARE DEEMED ADMITTED HYPOTHETICALLY IN THE RESPONDENT['S] MOTION TO DISMISS.
The petition is without merit. Petitioner failed to establish the right to inspect respondent corporation's books and receive dividends on the stocks owned by Carlos L. Puno.
Petitioner anchors his claim on his being an heir of the deceased stockholder. However, we agree with the appellate court that petitioner was not able to prove satisfactorily his filiation to the deceased stockholder; thus, the former cannot claim to be an heir of the latter.
A certificate of live birth purportedly identifying the putative father is not competent evidence of paternity when there is no showing that the putative father had a hand in the preparation of the certificate. The local civil registrar has no authority to record the paternity of an illegitimate child on the information of a third person.10 As correctly observed by the CA, only petitioner's mother supplied the data in the birth certificate and signed the same. There was no evidence that Carlos L. Puno acknowledged petitioner as his son.
Sec. 74. Books to be kept; stock transfer agent. - x x x.
The records of all business transactions of the corporation and the minutes of any meeting shall be open to the inspection of any director, trustee, stockholder or member of the corporation at reasonable hours on business days and he may demand, in writing, for a copy of excerpts from said records or minutes, at his expense.
Upon the death of a shareholder, the heirs do not automatically become stockholders of the corporation and acquire the rights and privileges of the deceased as shareholder of the corporation. The stocks must be distributed first to the heirs in estate proceedings, and the transfer of the stocks must be recorded in the books of the corporation. Section 63 of the Corporation Code provides that no transfer shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation.16 During such interim period, the heirs stand as the equitable owners of the stocks, the executor or administrator duly appointed by the court being vested with the legal title to the stock.17 Until a settlement and division of the estate is effected, the stocks of the decedent are held by the administrator or executor.18 Consequently, during such time, it is the administrator or executor who is entitled to exercise the rights of the deceased as stockholder.
Thus, even if petitioner presents sufficient evidence in this case to establish that he is the son of Carlos L. Puno, he would still not be allowed to inspect respondent's books and be entitled to receive dividends from respondent, absent any showing in its transfer book that some of the shares owned by Carlos L. Puno were transferred to him. This would only be possible if petitioner has been recognized as an heir and has participated in the settlement of the estate of the deceased.
Corollary to this is the doctrine that a determination of whether a person, claiming proprietary rights over the estate of a deceased person, is an heir of the deceased must be ventilated in a special proceeding instituted precisely for the purpose of settling the estate of the latter. The status of an illegitimate child who claims to be an heir to a decedent's estate cannot be adjudicated in an ordinary civil action, as in a case for the recovery of property.19 The doctrine applies to the instant case, which is one for specific performance - to direct respondent corporation to allow petitioner to exercise rights that pertain only to the deceased and his representatives.
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated October 11, 2006 and Resolution dated March 6, 2007 are AFFIRMED.
1 Penned by Associate Justice Conrado M. Vasquez, Jr. (now Presiding Justice of the Court of Appeals) with Associate Justices Mariano C. del Castillo (now Associate Justice of the Supreme Court) and Santiago Javier Ranada, concurring; rollo, pp. 28-36.
6 CA rollo, pp. 90-91.
8 Fernandez v. Tarun, 440 Phil. 334, 349 (2002).
9 Social Security System v. Aguas, G.R. No. 165546, February 27, 2006, 483 SCRA 383, 395-396.
10 Cabatania v. Court of Appeals, 484 Phil. 42, 51 (2004).
13 5A Fletcher Cyclopedia of the Law of Private Corporations, '2213.
14 Gokongwei, Jr. v. Securities and Exchange Commission, 178 Phil. 266, 314 (1979).
15 Cesar Villanueva, Philippine Corporate Law, p. 259, citing Nielson & Co., Inc. v. Lepanto Consolidated Mining Co., 26 SCRA 540 (1968); Lopez, Rosario, the Corporation Code of the Philippines, p. 617, citing Knight v. Schultz, 141 Ohio St. 267, 47 NE (2d) 286.
16 Rosario Lopez, The Corporation Code of the Philippines, Vol. 2, p. 718, citing Miguel A.B. Sison et al v. Hon. Agellon et al, SEC-EB No. 293, November 23, 1992.
17 5A Fletcher Cyclopedia of the Law of Private Corporations., '2213.
18 Tan v. Sycip, G.R. No. 153468, August 17, 2006, 499 SCRA 216, 231.
19 Joaquino v. Reyes, G.R. No. 154645, July 13, 2004, 434 SCRA 260, 274.

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