Atty. Jose C. Castro

May 27, 1996 Atty. Jose C. Castro Securities Transfer Services, Inc. 4th Flr., Benpres Bldg. Meralco Ave. cor. Exchange Road Pasig City S i r : This refers to your letter dated April 16, 1996 requesting opinion whether or not Sec. 73 of the Corporation Code, which provides for the procedure of issuance of new stock certificate in lieu of lost or destroyed original certificate, covers a situation where the certificate of stock was delivered by registered mail at the address of the shareholder as appearing in the signature card on file with the corporation but was not in fact received by the shareholder, and if the situation is not covered by said Section, what guidelines/procedures should be followed before a replacement certificate may be issued. LibLex Foreign jurisprudence is replete with authorities to the effect that a corporation may voluntarily issue a new certificate of stock in place of an original certificate which has been lost or destroyed and it can be compelled to issue a new certificate without any indemnity where, upon the facts, it is reasonably certain that the original certificate will not reappear , as where there is a clear proof that the original had been destroyed, or that it had been lost or stolen, not having an assignment by the owner, or where the certificate was lost by the corporation itself by carelessness, or if the corporation was otherwise protected, for in such a case the corporation could not incur any liability by reason of the original certificate. (11 Fletcher Sec. 5180, citing several decided cases) Thus, the Commission previously opined that while Section 73 of the Corporation Code appears to be mandatory, the same admits exceptions, such that a corporation may voluntarily issue a new certificate in lieu of the original certificate of stock which has been lost without complying with the requirements under Section 73 of the Corporation Code, provided that the corporation is certain as to the real owner of the share to whom the new certificate shall be issued . ( Ltr. to Josephine A Batiller, dtd. June 11, 1990 ) Under the circumstances presented in your letter, since neither the corporation nor the stockholder is at fault, the requirements under Section 73 of the Corporation Code may not be strictly complied with. It is within the prerogative of the corporation to determine whether or not, under the circumstances surrounding the situation, there is a necessity to impose the conditions and requirements laid down under said provision, and if it finds that compliance therewith is unnecessary, it would be an internal matter for the corporation to find measures in ascertaining who are the real owners of stock to whom the new certificates shall be issued. It is well-settled that unless proven otherwise, the " stock and transfer book " of the corporation is the best evidence to establish stock ownership. Any controversy pertaining to ownership of stocks may be raised to the Commission by filing a formal complaint with the Securities Investigation Department of this Commission pursuant to the provisions of PD 902-A, as amended and the Revised Rules of Procedures in the SEC . LibLex Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner