G.R. No. L-24983 May 20, 1968
FLORENTINO GENATO, FRANCISCO GENATO, and GENATO COMMERCIAL CORPORATION, petitioners, vs. FELISA GENATO DE LORENZO, respondent.

FACTS

The Genato Commercial Corporation is a family corporation founded by spouses Vicente Genato and Simona B. de Genato. They had six children: Francisco, Florentino, Manuel, Carmen, Felisa, and Juan. As of March 26, 1928, Simona owned 430 shares represented by Certificate No. 7. On December 23, 1942, the Board of Directors, including Simona, Francisco, and Florentino, designated Florentino as Assistant Secretary-Treasurer. Four or five days later, Florentino, acting in that capacity, cancelled Certificates Nos. 7 and 18 and issued new Certificates Nos. 118 (for 265 shares to Florentino) and 119 (for 265 shares to Francisco). The indorsement on the back of the original certificates, dated December 25, 1942, stated a sale, assignment, and transfer to Florentino and Francisco Genato, signed by Simona and witnessed by Juan Camus. After Simona’s death, an intestate proceeding was filed. The inventory did not include these 530 shares. The Philippine Trust Company (judicial administrator) and heirs Manuel, Felisa, and Juan filed a complaint to recover the shares for inclusion in the estate. Defendants Florentino and Francisco claimed they acquired the shares by simple donation from their mother. The trial court dismissed the complaint, finding a valid simple donation. Only plaintiff Felisa Genato de Lorenzo appealed to the Court of Appeals.

ISSUE

Whether there was a valid donation of the 530 shares of stock from Simona B. Vda. de Genato to her sons Florentino and Francisco Genato.

RULING

No, there was no valid donation. The Supreme Court affirmed the decision of the Court of Appeals, which reversed the trial court. The Court found no clear and convincing evidence of a simple donation. Assuming, for argument’s sake, that Simona delivered the certificates with instructions to transfer them, this did not constitute a valid manual donation under the Civil Code of 1889 due to lack of proper acceptance. The acceptance must be simultaneous with delivery. Here, one donee, Francisco, was not present at the alleged delivery, and there was no showing he authorized Florentino to accept on his behalf. Since the intended donation was joint to both donees, one could not accept independently of the other. There being neither a valid donation nor a valid sale (as no consideration was proven), the cancellation of the original certificates and issuance of new ones were illegal. Thus, the shares remained part of Simona’s estate. The Court also ruled that Felisa’s appeal inured to the benefit of her co-plaintiffs because the interests of all heirs in the unliquidated estate were interwoven and inseparable.