Ms. Emilie C. Paglinawan

April 13, 1992 Ms. Emilie C. Paglinawan 602 Sisa Street, Sampaloc Manila M a d a m : This refers to your letter of April 10, 1992 requesting opinion whether the president of the Rural Bank of Mansalay, Inc. can lawfully issue new certificates in replacement of lost stock certificates. cdll The manner of issuing stock certificates is commonly regulated, generally at least, by the charter or statutes, and ordinarily the officers or persons within the corporation whose duty is to issue the certificates are designated, by general reference or in specific terms. In the absence of provisions to the contrary, certificates can only be issued by the officer specified in the charter or general law. (11 Fletcher sec. 5162) The pertinent provision of the Corporation Code provides: "SECTION 63. Certificate of stock and transfer of shares . The capital stock of stock corporations shall be divided into shares for which certificates signed by the president or vice-president, countersigned by the secretary or assistant secretary ,and sealed with the seal of the corporation shall be issued in accordance with the by-laws ...." ( (Emphasis supplied) Thus, the manner of issuing stock certificate depends upon the provisions of the by-laws of the corporation. In the absence of a by-law provision, the function of issuing stock certificates usually pertains to that of the corporate secretary, and it is mandatory under the above provisions of law that the certificate shall be signed by the president or vice-president and countersigned by the corporate secretary or assistant corporate secretary. As to the procedure for the issuance of new certificates of stock in lieu of those which have been lost, stolen or destroyed, the following provisions of the Corporation Code shall be followed: "SECTION 73. Lost or destroyed certificates . The following procedure shall be followed for the issuance by a corporation of new certificates of stock in lieu of those which have been lost, stolen or destroyed: 1. The registered owner of certificate(s) of stock in a corporation or his legal representative shall file with the corporation an affidavit in triplicate setting forth, if possible, the circumstances as to how the certificate(s) were lost, stolen or destroyed, the number of shares represented by each certificate, the serial number(s) of the certificate(s) and the name of the corporation which issued the same. He shall also submit such other information and evidence which he may deem necessary. 2. After verifying the affidavit and other information and evidence with the books of the corporation said corporation shall publish a notice in a newspaper of general circulation published in the place where the corporation has its principal office, once a week for three (3) consecutive weeks at the expense of the registered owner of the certificate(s) of stock which have been lost, stolen or destroyed, the notice shall state the name of said corporation, the name of the registered owner and the serial number(s) of said certificate(s) and the number of shares represented by such certificate(s),and that after the expiration of one (1) year from the date of the last publication, if no contest has been presented to said corporation regarding said certificate(s) of stock, the right to make such contest shall be barred and said corporation shall cancel in its books the certificate(s) of stocks which have been lost, stolen or destroyed and issue in lieu thereof new certificate(s) of stock, unless the registered owner files a bond or other security in lieu thereof as may be required, running for a period of one (1) year for a sum and in such form and with such sureties as may be satisfactory to the board of directors, in which case a new certificate may be issued even before the expiration of the one (1) year period provided herein: Provided, That if a contest has been presented to said corporation or if an action is pending in court regarding the ownership of said certificate(s) of stock which have been lost, stolen or destroyed, the issuance of new certificate(s) of stock in lieu thereof shall be suspended until the final decision by the court regarding the ownership of said certificate(s) of stock which have been lost, stolen or destroyed. Except in case of fraud, bad faith, or negligence on the part of the corporation and its officers, no action may be brought against any corporation which shall have issued certificate(s) of stock in lieu of those lost, stolen or destroyed pursuant to the procedure above-described. LibLex Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman