GR 133969; (January, 2000) (Digest)
G.R. No. 133969. January 26, 2000.
NEMESIO GARCIA, petitioner, vs. NICOLAS JOMOUAD, Ex-officio Provincial Sheriff of Cebu and SPOUSES JOSE ATINON & SALLY ATINON, respondents.
FACTS
The spouses Atinon obtained a final judgment for a sum of money against Jaime Dico. To execute the judgment, the sheriff levied upon Proprietary Ownership Certificate (POC) No. 0668 in the Cebu Country Club, which was registered in Dico’s name. Petitioner Nemesio Garcia filed an action for injunction to stop the auction, claiming ownership of the certificate. Garcia alleged he had originally lent his own POC to Dico, who was then his employee, and that the Club later issued POC No. 0668 in Dico’s name. After Dico resigned, he executed a Deed of Transfer dated November 18, 1992, conveying the certificate back to Garcia and returned the physical certificate. The Club was furnished a copy, but the transfer was never recorded in the corporate books because Garcia failed to present proof of capital gains tax payment. The Regional Trial Court dismissed Garcia’s complaint, and the Court of Appeals affirmed.
ISSUE
Whether the unrecorded transfer of the certificate from Dico to Garcia is valid against the spouses Atinon, who are judgment creditors seeking to levy on the certificate.
RULING
The petition is without merit. The Supreme Court denied the petition, upholding the levy. The case is governed by Section 63 of the Corporation Code, which provides that no transfer of shares is valid, except as between the parties, until recorded in the books of the corporation. Applying the doctrine in Uson v. Diosomito, the Court held that an unrecorded transfer is void as against an attaching or execution creditor of the registered owner, regardless of whether the creditor had actual knowledge of the transfer. The statutory requirement is absolute. Since the transfer from Dico to Garcia was never entered in the Club’s corporate books, it remained invalid as to third parties like the spouses Atinon. The certificate rightly stood in Dico’s name at the time of the levy. The Court also rejected Garcia’s argument that the Club’s board minutes noting Dico’s resignation constituted compliance with Section 63, as the law strictly requires recording in the corporate books themselves. Thus, the appellate court committed no reversible error.