Atty. Perpetuo M. Virtusio

December 4, 1991 Atty. Perpetuo M. Virtusio Bataan Shipyard & Engineering Co., Inc. Engineer Island Compound 2nd Street Port Area, Manila S i r : This refers to your letter dated November 14, 1991 relative to your proposal to secure a new "stock and transfer book" for Bataan Shipyard & Engineering Co., Inc. (BASECO) and to record the outstanding shares deemed to have been assigned in blank to then President Marcos as a Memorandum Entry. As stated, inspite of your diligent efforts as Corporate Secretary to locate the "stock and transfer book" of BASECO, the same cannot be found. In view thereof, the Board of Directors, in its last meeting, has declared the "stock and transfer book" of the Corporation lost and consequently, ordered you to secure a new one. Further, you made a proposal to make a memorandum entry in the new stock and transfer book of the outstanding shares deemed to have been assigned in blank to then President Marcos based on the Supreme Court declaration, in the case of "Bataan Shipyard & Engineering Co., Inc. vs. Presidential Commission on Good Government", G.R. No. 75885, May 27, 1987. Thus, you request for Commission's conformity on the above proposals. Corporate books and records are merely private books and records, and as such, they are subject to the general rules of evidence which are commonly applicable to documentary evidence. (5 Fletcher Cyc. Corp.,1976 rev. vol.,sec. 2196 at 643).As held in a number of cases, the general rule is that such original books and records, if they are in existence and can be produced, are prima facie evidence of the matters recorded therein. (Fletcher, p. 643) However, it is not to be implied from the foregoing that original books and records are the exclusive evidence of the matters and things which ordinarily are or should be written therein, since parol or other extraneous evidences are admissible in many situations. (Fletcher Sec. 2196 at 644).Moreover, "the word 'evidence' is sometimes used in connection with corporate books and records where judicial evidence or the use of such books and records in a judicial or quasi-judicial sense is not intended. To illustrate, stock and transfer books are commonly said to be evidence of stock ownership and voting for purposes of corporate elections, or for purposes of dividend payment".(Fletcher, p. 644). Extrinsic evidence of the acts or matters which are or should be recorded in the corporate books and records may be admitted where the original corporate records are lost, mislaid or destroyed, or are otherwise inaccessible. Proper foundation proof explaining the failure to produce the original books and records must first be laid for the introduction of other evidence. Such secondary evidence ordinarily consists of copies of the records, either certified or sworn to, or parol testimony. (Fletcher, sec. 2197, at 648). Apropos thereto, Rule 130 of our Rules of Court reads thus: "SECTION 4. Secondary evidence when original is lost or destroyed. When the original writing has been lost, destroyed, or cannot be produced in court, upon proof of its execution and loss or destruction, or unavailability, its contents may be proved by a copy, or by a recital of its contents in some authentic documents or by the recollection of witnesses." Hence, when the original stock and transfer book of a corporation has been lost or destroyed, secondary or extrinsic evidence may be introduced to reconstitute its contents. In line, however, with our rules requiring the maintenance of a stock and transfer book, said new book should be presented to this Commission for proper registration, accompanied by a sworn statement executed by any responsible corporate officer setting forth the circumstances attending the loss. As to whether you can make a memorandum entry in the new stock and transfer book of the alleged transfer/assignment of the shares in favor of then President Marcos, the Commission, in a previous opinion, has ruled that assignment/transfer of shares of stock need not be submitted to this Commission for approval because the question of whether or not such transfer should or should not be recorded in the stock and transfer book of that corporation is one that only the corporation itself can resolve. ( Letter dated September 29, 1964 addressed to Mr. Emmanuel T. Santos ) Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman