Neugene Marketing Inc. v. Court of Appeals

Summary

This case involved a dispute over the validity of Neugene Marketing Inc.'s dissolution in 1987. Three stockholders holding 5,250 out of 7,000 shares voted to dissolve the corporation, but petitioners claimed these shares had been previously transferred to them, invalidating the dissolution vote. The SEC initially nullified the dissolution, finding the transfers valid. However, the Court of Appeals reversed this decision, and the Supreme Court affirmed, finding that the stock transfers were fraudulent and made without consideration. The Court ruled that the stock certificates, though endorsed in blank, were held by the Uy family as beneficial owners for safekeeping, and the purported transfers were stolen and improperly recorded. The dissolution was therefore valid as the respondents legitimately held the requisite two-thirds majority under Section 118 of the Corporation Code. The case establishes important precedent regarding stock transfer validity, the requirement of consideration in transfers, and corporate dissolution procedures.