Mr. Ricardo C. Silverio

April 16, 1993 Mr. Ricardo C. Silverio House of Representatives Quezon City, Metro Manila S i r : This refers, to your letter of February 22, 1993 requesting for comments on the following House Bills: cdlex 1. HB 1438 AN ACT FURTHER AMENDING SUB-PARAGRAPH C, SEC 6 OF PD NOS. 2653 and 1758. (AN ACT FURTHER AMENDING SUB-PARAGRAPH (C), SECTION 6 OF PRESIDENTIAL DECREE NUMBERED 902-A, AS AMENDED BY PRESIDENTIAL DECREES NUMBERED 1653 AND 1758, BY PROVIDING THAT ONLY ACTIONS FOR MONEY CLAIMS ARE SUSPENDED UPON APPOINTMENT OF A MANAGEMENT COMMITTEE, REHABILITATION RECEIVER, BOARD OR BODY, FOR CORPORATIONS, PARTNERSHIPS OR ASSOCIATIONS UNDER RECEIVERSHIP AND FOR OTHER PURPOSES.) 2. HB 1802 AN ACT PROVIDING FOR THE ESCHEAT IN FAVOR OF THE STATE OF THE SHARES OF STOCKS, THE ACCUMULATED STOCK AND CASH DIVIDENDS PERTAINING THEREON IN THE NAMES OF PERSONS, ASSOCIATIONS, CORPORATIONS, PARTNERSHIPS, AND OTHER BUSINESS ENTITIES UNHEARD OF FOR THE LAST TEN YEARS OR WHERE THERE HAVE BEEN NO CLAIMANTS THERETO FOR THE SAME PERIOD. Considering that what is sought to be effected by H.B. 1436 is only to clear out the meaning of the term "claims" as intended by the framers of the original law, to purely cover "money claims" excluding actions involving question of title to or ownership of real property, the Commission interposes no objection to the passage of said Bill. However, it is suggested that the exclusion of questions of title to or ownership of real property from the coverage thereof should not include those claims against corporate properties which arose from debtor-creditor relationship of distressed corporation and the claimant. Relative to the second Bill, the present ruling of the Commission on the matter is that in cases of shares whose owners cannot be identified or located a trust relation is impliedly created between the corporation and the unknown stockholders. As previously ruled, these shares may be entered in the corporate books and shall stand in the name of the corporation as "trustee" or said holder may be described, as a trustee in the certificate. The fact that one stock stands on the corporate book in the name of a person as trustee in the certificate, is notice to both the corporation and to the persons who may purchase such shares from the trustee that he does not hold the shares in his own right. ( Letter addressed to Mr. Candido Dizon, Planters Foundation, Inc. dated September 10, 1982 ).The fact that the cestui que trust is not named is immaterial. Mere lapse of time after failure of cestuis que trustent to appear and claim the stock and dividends thereof will not raise a presumption of ownership in the person named in the certificate as trustee nor will the fact that the person seeking the transfer had been unable to discover the cestuis que trustent. (Ibid citing 12 Fletcher, Cyc. Corp. sec. 5547).The entry in the books of the corporation is a continuous assertion that the stock is not a private property of the trustee, and thus, prevents the running of the statute of limitations. In line with Rule 91 of the Rules of Court which provides for a proceeding whereby the real and personal properties of a person who dies without leaving any will or legal heirs will be escheated in favor of the State upon his death and the Unclaimed Balances Law (Act No. 3936) which provides for the escheating of all deposits, credits, bullions, securities, or other evidences of indebtedness and the interests thereon with banks in favor of persons unheard of for a period of ten years or more or in the case of deposits where no further deposits or withdrawals have been made during the preceding ten years or more, the Commission is inclined to recommend for the passage of said Bill. However, it is suggested that since under P.D. 902-A, as amended, the Commission is vested with the exclusive and original jurisdiction to hear and decide cases involving intra-corporate or partnership relations between and among stockholders, members, or associates, between any or all of them and the corporation, partnership or association of which they are stockholders, members, or associates, it is suggested that instead of the Regional Trial Court acquiring jurisdiction over the escheat proceeding of unclaimed shares as provided for under Sec. 4 of the Bill, the jurisdiction over such cases should be vested with the SEC. Very truly yours, (SGD) ROSARIO N. LOPEZ Chairman