Francisco V. Arzadon, Jr.

August 24, 1993 Francisco V. Arzadon, Jr. 17 Carangalan District Dagupan City 2400 S i r : This refers to your letter of July 22, 1993 inquiring whether the transfer of ownership of shares of stocks of a deceased stockholder to the heirs requires registration with the Register of Deeds. prcd The pertinent provision of the Corporation Code provides in part: "SECTION 63. Certificate of stock and transfer of shares ....Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner or his attorney-in-fact or 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 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." (Emphasis supplied) Thus, to make a transfer of shares of stock binding against the corporation and third parties, the same must be recorded or registered in the stock and transfer book of the corporation. The same does not require registration with the Register of Deeds. To transfer the shares of stock in favor of the heirs of the deceased stockholder, a judicial or extra-judicial partition of the estate is necessary if he died intestate. Otherwise, it will be necessary to wait for the termination of the testamentary proceedings and the final adjudication of the shares of stock in accordance with the will of the decedent. Furthermore, to record changes in stockholdings resulting from the death of a stockholder, existing internal revenue laws require the presentation of proof of payment by the heirs of the inheritance and estate taxes before any transfer of stock in their favor can be recorded in the books of the corporation. Once the legal requirements for transfer of shares under existing laws have been complied with, it would be a ministerial duty on the part of the corporation to register the transfer in the corporate books in the name of the legal heir. If a corporation wrongfully refuses to record a transfer of shares when it has the power and is under an obligation to record the same, it may be compelled to do so by a suit in equity for specific performance or mandamus. Mandamus is an appropriate remedy to compel the recording where the conditions, facts and circumstances of a given case bring it within the legal rules which govern the granting of the writ. Mandamus will lie to compel the corporation to register the transfer of stock if the transferee seeking relief has performed and complied with all the statutory requirements for valid transfer of shares. prcd Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman