MANILA — The Supreme Court (SC) has ruled that inclusion in a corporation’s General Information Sheet (GIS) is insufficient to establish stockholder status.

In a resolution penned by Associate Justice Ramon Paul L. Hernando, the SC’s First Division ruled that Ma. Christina Patricia C. Lopez and John Rusty Lito Lopez are not stockholders of LC Lopez and Conqueror, despite being listed in the companies’ GIS submitted to the Securities and Exchange Commission.

The case arose from special stockholders’ meetings convened by the two companies to elect new board members. Christina and John Rusty attempted to participate via proxies, but the companies denied their proxies, asserting that their principals were not registered stockholders. The meetings proceeded, resulting in the election of new directors.

Christina and John Rusty questioned the elections before the Regional Trial Court (RTC), arguing that their exclusion invalidated the proceedings due to lack of quorum. The RTC ruled in their favor, citing the GIS as proof of their stockholder status.

The Court of Appeals reversed the RTC’s ruling, noting that the names of Christina and John Rusty did not appear in the companies’ stock and transfer books.

Initially, the SC upheld the RTC’s ruling, recognizing the GIS and witness testimonies as sufficient evidence. However, upon review through a motion for reconsideration, the SC reversed its earlier decision.

The Court clarified that under Section 62 of the Revised Corporation Code, a transfer of shares is not valid—except between the parties—until properly recorded in a corporation’s stock and transfer book. The book, along with stock certificates issued in the shareholder’s name, serves as the official and primary proof of stock ownership.

The SC found that Christina and John Rusty failed to present sufficient evidence to rebut the records in the companies’ stock and transfer books. As a result, they are not stockholders of record, and their exclusion from the meetings did not affect quorum or invalidate the elections.

In his dissenting opinion, Associate Justice Ricardo R. Rosario agreed that the stock and transfer book and stock certificates hold more weight than the GIS, but emphasized that these documents are not conclusive and absolute proof of stock ownership.