Stockholders of F. Guanzon v. RD

Stockholders of F. Guanzon and Sons, Inc v. Register of Deeds of Manila (1962) G.R. No. L-18216 October 30, 1962 Lessons Applicable: Strong Juridical Personality (Corporate Law)

FACTS: Sept 19, 1960: 5 stockholders of F Guanzon executed a certificate of liquidation of the assets of the corporation. By virtue of a resolution dissolving the corporation, they wish to distribute as liquidated dividends among themselves and in proportion to their shareholdings, the assets of the corporation, which includes real estate properties in Manila. The Register of Deeds however, upon presentment of the certificate of liquidation by the 5 stockholders, denied registration of the properties to be distributed on 7 grounds, 3 of which were questioned by the stockholders: (1) no statement of the # of parcels of land to be distributed (2) registration fees iao P430.50 (3) doc stamp tax iao P940.45 (4) court judgment approving the dissolution and directing disposition of the assets. The stockholders claim that the certificate of liquidation merely partitions/distributes the corporate assets among them because the corporation has already been dissolved. Hence they need not comply with the requirements imposed by the Register of Deeds and the Land Registration Authority. The LRA counters that the distribution of the corporate assets upon dissolution of the corporation, is ultimately a transfer/conveyance of property to the stockholders. ISSUE: W/N the certificate of liquidation involves a mere distribution of corporate assets or a transfer or conveyance of property. HELD:  It is a transfer/conveyance of property. A corporation is a juridical person separate and distinct from the stockholders. Properties registered in the name of the corporation are owned by it as a separate entity. The shares held by stockholders are their personal property and not the corporation, and it only typifies an aliquot part of the corporation’s property or the right to share in the proceeds. The holder of such share is not the o wner of any part of the capital of the corporation, nor is he entitled to possession of any definite portion of its assets, neither is he a co-owner. Liquidation by stockholders after a corporation’s dissolution is not mere partitioning of community property, but already a conveyance or transfer of title to them from the corporation.

The distribution of the corporate properties to the SHs was deemed not in the nature of a partition among co-owners, but rather a disposition by the corporation to the SHs as opposite parties to a contract Properties registered in the name of the corporation are owned by it as an entity separate and distinct from its members; shares of stock are personal property, and NOT corporate property share of stock typifies an aliquot part of the corporation’s property, or the right to share in the proceeds to that extent when distributed holder of shares is not the owner of any part of the capital of the corporation, nor is he entitled to the possession of any definite portion of its property or assets