G.R. No. L-18216; October 30, 1962
STOCKHOLDERS OF F. GUANZON AND SONS, INC., petitioners-appellants, vs. REGISTER OF DEEDS OF MANILA, respondent-appellee.

FACTS

The stockholders of F. Guanzon and Sons, Inc., following a resolution to dissolve the corporation, executed a certificate of liquidation distributing the corporate assets, including real properties, among themselves. Upon presentation to the Register of Deeds of Manila for registration, the document was denied registration on several grounds. The stockholders contested three specific requirements: the need to state the number of parcels in the acknowledgment, the payment of P430.50 in registration fees, and the affixture of P940.45 worth of documentary stamps. The Register of Deeds and, on consulta, the Commissioner of Land Registration, sustained these requirements, treating the certificate as a conveyance.
The stockholders appealed, arguing that the certificate of liquidation is not a conveyance but a mere distribution of assets following corporate dissolution. They contended that, as a simple distribution, it should not be subject to the formalities and fees applicable to transfers of real property, making the disputed requirements improper.

ISSUE

Whether the certificate of liquidation executed by the stockholders constitutes a transfer or conveyance of real property, thereby subjecting it to the corresponding registration fees, documentary stamp taxes, and formal requirements for acknowledgment.

RULING

The Supreme Court affirmed the resolution of the Commissioner of Land Registration, ruling that the certificate of liquidation is in the nature of a transfer or conveyance. The Court’s legal logic is anchored on the fundamental principle of corporate personality. A corporation is a juridical entity distinct from its stockholders. Property registered in the corporation’s name is owned by the corporate entity itself, not by the stockholders collectively or individually.
While stockholders own shares representing an aliquot interest in the corporate assets, they do not own specific corporate property. A share of stock is personal property typifying a right to a proportionate share in the net assets upon lawful distribution, but it does not equate to co-ownership or a vested title in any specific asset of the corporation. Consequently, the dissolution and liquidation process necessarily involves the transfer of title from the corporate entity to the individual stockholders. The act of distributing real property assets via the certificate of liquidation effectively conveys title from the dissolving corporation (the registered owner) to the stockholders as individuals.
Therefore, for registration purposes, the document effects a transfer of real property and must comply with the attendant formalities, including a proper acknowledgment stating the number of parcels and the payment of corresponding registration fees and documentary stamp taxes computed on the value of the property transferred. The Court found the requirements imposed by the Register of Deeds to be legally correct.