Mr. Amancio R. Garcia

January 17, 1985 Mr. Amancio R. Garcia Room 204, Estuar Building 41 Timog Avenue, Quezon City Sir : This refers to your letter dated December 11 and 28, 1984 requesting for opinion of the Commission on the query posed therein. cdlex It appears that certificates of stocks of Pacific Farms, Inc. were issued in favor of Fatimah and Leon Araneta, both minors, naming their father, Antonio S. Araneta, Jr. as trustee .The consideration of the said shares had been paid by their grandfather, Don Antonio Araneta. In view of a pending sale of the Araneta's shareholdings in the Pacific Farms, Inc.,it is requested by Antonio S. Araneta, Jr. that the certificates of stocks issued in favor of Fatimah and Leon Araneta be transferred to him, not as trustee but as owner of the said shares for purposes of eventual sale. Your query is whether the company can issue new certificates of stocks in favor of Antonio S. Araneta, Jr. as owner thereof upon the surrender of the certificate of stocks issued in the name of Fatimah and Leon Araneta, duly signed by himself as trustee on the indorsement portion of the certificate of stocks in question. You are also inquiring as to the necessary documents required to be submitted to the Corporate Secretary to legally effect such transfer. Inasmuch as the certificates of stocks were issued in the name of the minor children, they are considered as owners of the stocks or shares represented by the certificates. It is to be noted that the issuance of the certificates of stock in their names is a written acknowledgment by the corporation of the minor children's interest in the corporation. However, as to its administration , Article 326 of the Civil Code provides, to wit: "ARTICLE 326. When the property of the child is worth more than two thousand pesos, the father or mother shall be considered as guardian of the child's property, subject to the duties and obligations of guardians under the Rules of Court ." (emphasis supplied) LibLex Under the Rules of Court in the Philippines, when the property of the child is worth more than two thousand pesos, the father or mother shall be considered guardian of the child's property only after the issuance of Court Order appointing a general guardian. Section 7 of Rule 93 of the Rules of Court provides, thus: "SECTION 7. When the property of the child under parental authority is worth two thousand pesos or less, the father or mother, without the necessity of court appointment ,shall be his legal guardian. When the property of the child is worth more than two thousand pesos ,the father or the mother shall be considered guardian of the child's property with the duties and obligations of guardians under these rules and shall file the petition required by Section 2 hereof. For good reasons, the court may, however, appoint another suitable person." (emphasis supplied). Considering that under the aforecited provision the administration of property of minor children worth more than P2,000.00 requires court appointment of a legal guardian, it follows that the disposition or transfer of ownership thereof likewise necessitates issuance of Court order. It is worth mentioning that the selling and encumbering of the property of the ward is subject to the provisions of Rule 95 of the Rules of Court. Thus, if the value of the property of minor children is worth more than P2,000.00, the administration as well as the disposition or transfer of ownership of the shares of stock owned by them requires Court Order issued pursuant to the provisions of the Rules of Court. Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman