THE Supreme Court (SC) has ruled that a company’s general information sheet is not enough to prove one’s stockholder status.
In a ruling dated April 21, 2025 but only made public yesterday, the SC’s first division, through Associate Justice Ramon Paul Hernando, held that Maria Christina Patricia Lopez and John Rusty Lito Lopez are not stockholders of LC Lopez and Conqueror, despite being listed in the company’s general information sheet submitted to the Securities and Exchange Commission.
Concurring with the ruling were Chief Justice Alexander Gesmundo and Associate Justices Rodil Zalameda, Ricardo Rosario and Jose Midas Marquez.
The case started when the two sent proxies to participate in a special stockholders’ meeting the company conducted, but were rejected because their principals were not registered stockholders.
The meeting saw the election of new directors.
Christina and John Rusty challenged the elections before the regional trial court, arguing that their exclusion from the meeting and subsequent elections invalidated the latter due to a lack of quorum.
The RTC ruled in their favor, citing the company’s general information sheet as evidence that they were stockholders of said company.
However, the Court of Appeals (CA) reversed the decision, pointing out that their names did not appear in the company’s stock and transfer books.
The CA also pointed out that they did not present sufficient proof of ownership of their shares in the company.
The SC initially affirmed the trial court’s ruling but after a motion for reconsideration was filed, it reversed its earlier decision.
In its ruling, the SC held that the two “failed to satisfactorily establish their status as stockholders with acceptable evidence.
It added that the stock and transfer book is the primary basis for determining the shareholders of a corporation, not the general information sheet.
“The stock and transfer book of LC and Conqueror remains as a good basis for determining the stockholders of the respective corporations,” the SC said, adding that Christina and John Rusty failed to present enough proof to challenge the records in the stock and transfer books.
“Therefore, they are not stockholders of record and their exclusion from the meetings did not affect the quorum or invalidate the board elections,” the SC said.
The SC stressed that mere inclusion in the general information sheet of a company “is by itself insufficient proof that such person is a shareholder.
“Between the stock and transfer book and the general information sheet, the former is controlling,” the SC added.
Furthermore, the SC held that under Section 62 of the Revised Corporation Code, a transfer of shares is not valid — except between the parties — until it is recorded in the company’s books.
