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G.R. No. L-2808 August 31, 1951

 JOSEFA SANTAMARIA, assist! "# $% $us"a&!, FRAN'IS'O SANTAMARIA, J%., ()ai&ti*-a(()),+s.TE ONGONG AN SANGAI /ANING 'ORORATION a&! R. . TALIN,

!&!a&ts-a(())a&t.

/ATISTA ANGELO, J.4

FA'TS4 Mrs. Josefa T. Santamaria bought 10,000 shares of the Batangas Minerals,Inc. (Batangas), through the oces of Woo, !"Tioco # $aftal! (Woo), a stoc%bro%erage &rm an' a! therefore *,0+1.0 as sho-n b! a receit. The bu!erreceie' Stoc% /erti&cate $o. 1 issue' in the name of Woo, !"Tioco # $aftal! an'in'orse' in blan% b! this &rm.

 Thereafter, Mrs. Santamaria lace' an or'er for the urchase of 10,000 shares of the/ro-n Mines, Inc. -ith 2.J. /amos # /o. (2J /amos), a bro%erage &rm, an''eliere' /erti&cate $o. 1 to the latter as securit! therefor -ith the un'erstan'ingthat sai' certi&cate -oul' be returne' to her uon a!ment of the 10,000 shares.3er name -as later -ritten in lea' encil on the uer right han' corner of thecerti&cate.

 T-o 'a!s later, -hen Mrs. Santamaria -ent to a! for her or'er, she -as informe'that 2.J. /amos -as no longer allo-e' to transact business 'ue to a rohibitionor'er from Securities an' 45change /ommission an' that her Stoc% certi&cate -as inthe ossession of the 3ong%ong an' Shanghai Ban%ing /ororation (3ong%ong)

It came into the ossession of the 3ong%ong because 2.J. /amos ha' oene' anoer'raft account -ith this ban% an' ha' e5ecute' a 'ocument of h!othecation. 6ser re7uest of 3ong%ong, Batangas issue' /erti&cate $o. 1 in lieu of /erti&cate $o.1, in the name of 2obert W. Talin as trustee.

/8I or'ere' 3ong%ong to a! the lainti9 the sum of *,0+1.0 lus the costs of suit. The case -as certi&e' to this /ourt of 6eals.

ISS4S: 1) W;$ lainti9"aellee -as chargeable -ith negligence in the transaction-hich gae rise to this case. ) W;$ the 'efen'ants Ban% obligate' to in7uire -ho-as the real o-ner of the shares reresente' b! the certi&cate of stoc%, an' coul' itbe charge' -ith negligence for haing faile' to 'o so<

1. =4S.

lainti9 'i' not ta%e an! recaution to rotect herself against the ossible misuse ofthe shares reresente' b! the certi&cate of stoc%. lainti9 coul' hae as%e' thecororation that ha' issue' sai' certi&cate to cancel it an' issue another in lieu

thereof in her name to arise the hol'er that she -as the o-ner of sai' certi&cate. This she faile' to 'o, an' instea' she 'eliere' sai' certi&cate, as it -as, to 2.J./amos hereb! clothing the latter -ith aarent title to the shares reresente' b!sai' certi&cate inclu'ing aarent authorit! to negotiate it b! 'eliering it to sai'coman! -hile it -as in'orse' in blan% b! the erson or &rm aearing on its face asthe o-ner thereof. The 'efen'ant Ban% ha' no %no-le'ge of the circumstances un'er-hich the certi&cate of stoc% -as 'eliere' to 2.J. /amos an' ha' a erfect right toassume that 2.J. /amos -as la-full! in ossession of the certi&cate in ie- of thefact that it -as a street certi&cate, an' -as in such form as -oul' entitle an!

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ossessor thereof to a transfer of the stoc% on the boo%s of the cororationconcerne'.

It is a -ell"%no-n rule that a bona &'e le'gee or transferee of a stoc% from theaarent o-ner is not chargeable -ith %no-le'ge of the limitations lace' on it b!the real o-ner, or of an! secret agreement relating to the use -hich might be ma'e

of the stoc% b! the hol'er.

. $;.

It shoul' be note' that the certi&cate of stoc% in 7uestion -as issue' in the name ofthe bro%erage &rm"Woo, !"Tioco # $aftal! an' that it -as 'ul! in'orse' in blan% b!sai' &rm, an' that sai' in'orsement -as guarantee' b! 2.J. /amos -hich in turnin'orse' it in blan%. This certi&cate is -hat it is %no-n as street certi&cate. on itsface, the hol'er -as entitle' to 'eman' its transfer into his name from the issuingcororation. The Ban% -as not obligate' to loo% be!on' the certi&cate to ascertainthe o-nershi of the stoc% at the time it receie' the same from 2.J. /amos for it-as gien to the Ban% ursuant to their letter of h!othecation. 4en if sai'certi&cate ha' been in the name of the lainti9 but in'orse' in blan%, the Ban% -oul'still hae been >usti&e' in belieing that 2.J. /amos ha' title thereto for the reasonthat it is a -ell"%no-n ractice that a certi&cate of stoc%, in'orse' in blan%, is'eeme' 7uasi negotiable, an' as such the transferee thereof is >usti&e' in belieingthat it belongs to the hol'er an' transferor.

 The onl! ei'ence in the recor' to sho- that the certi&cate of stoc% in 7uestion ma!not hae belonge' to 2.J. /amos is the testimon! of the lainti9 but een assumingfor the sa%e of argument that -hat lainti9 has state' is true, such an inci'ent -oul'merel! sho- that lainti9 has an a'erse claim to the o-nershi of sai' certi&cate ofstoc%, but that -oul' not necessaril! lace the Ban% in the osition to in7uire as tothe real basis of her claim, nor -oul' it lace the Ban% in the obligation to recogni?eher claim an' return to her the certi&cate outright. 6 mere claim an' of o-nershi'oes not establish the fact of o-nershi. The right of the lainti9 in such a case-oul' be against the transferor. In fact, this is the attitu'e lainti9 has a'ote' -henshe &le' a charge for estafa against 2afael J. /amos, -hich culminate' in hisrosecution an' coniction, an' it is onl! -hen she foun' him to be insolent thatshe 'eci'e' to go against the Ban%.

 The /ourt has notice' that the 'efen'ant Ban% -as -illing from the er! beginning tocomromise this case b! 'eliering to the lainti9 certi&cate of stoc% $o. 1 that-as issue' to sai' Ban% b! the issuer cororation in lieu of the original as allege' an'ra!e' for in its amen'e' ans-er to the comlaint. The most that lainti9 coul'claim is the return to her of the sai' certi&cate of stoc%. The /ourt is incline' to grantthe formal ten'er ma'e b! the 'efen'ant to the lainti9 of sai' certi&cate.