Scribd
Upload
95 views2 pages

Bachrach Motors V Icarangal

The Supreme Court ruled that shares of stock are considered personal property and can be subject to a pledge or chattel mortgage. Specifically, the Court affirmed that a pledge of 6,300 stock dividends was valid against the opposing party Bachrach Motor Co. because the stock certificate was delivered to the creditor bank in accordance with the Chattel Mortgage Law, even though the contract was not a public instrument. Additionally, the Court held that stock certificates are considered "quasi negotiable" instruments, meaning they can be transferred by delivery and give title to the transferee similar to negotiable instruments like bills and notes.

Uploaded by

bob
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
95 views2 pages

Bachrach Motors V Icarangal

The Supreme Court ruled that shares of stock are considered personal property and can be subject to a pledge or chattel mortgage. Specifically, the Court affirmed that a pledge of 6,300 stock dividends was valid against the opposing party Bachrach Motor Co. because the stock certificate was delivered to the creditor bank in accordance with the Chattel Mortgage Law, even though the contract was not a public instrument. Additionally, the Court held that stock certificates are considered "quasi negotiable" instruments, meaning they can be transferred by delivery and give title to the transferee similar to negotiable instruments like bills and notes.

Uploaded by

bob
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

G.R. No.

L-42462 August 31, 1937

FACTS:

June 30, 1927: CFI favored Bachrach Motor Co., Inc (Bachrach) against Mariano Lacson
Ledesma
Ledesma mortgaged to the Philippine National Bank (PNB) Talisay-Silay Milling Co., Inc shares
September 29, 1928: PNB brought an action against Ledesma and his wife Concepcion Diaz for
the recovery of a mortgage credit
January 2, 1929: PNB amended its complaint by including the Bachrach Motor Co., Inc., as
party defendant because they claim to have rights to some of the subject matters of this
complaint
January 30, 1929: Bachrach field a gen. denial
CFI: favored PNB
December 20, 1929: Bachrach brought an action in the CFI against the Talisay-Silay Milling Co.,
Inc., to recover P13,850 against the bonus or dividend w/c, by virtue of the resolution of
December 22, 1923, Central Talisay-Silay Milling Co., Inc., had declared in favor of Ledesma as
one of the owners of the hacienda which had been mortgaged to the PNB to secure the
obligation of the Talisay-Silay Milling Co., Inc. in favor of said bank
CFI: favored Bachrach
ISSUE: W/N shares of stock are personal property and therefore can be subject to pledge or
chattel mortgage

HELD: YES. AFIRMED


section 4 of the Chattel Mortgage Law, in so far as it provides that a chattel mortgage shall not
be valid against any person except the mortgagor, his executors or administrators, unless the
possession of the property is delivered to and retained by the mortgagee or unless the
mortgage is recorded in the office of the register of deeds of the province in which the
mortgagor resides.
pledge of the 6,300 stock dividends is valid against the Bachrach because the certificate was
delivered to the creditor bank, notwithstanding the fact that the contract does not appear in a
public instrument
Certificates of stock or of stock dividends, under the Corporation Law, are quasi negotiable
instruments in the sense that they may be given in pledge or mortgage to secure an obligation
certificates of stock, while not negotiable in the sense of the law merchant, like bills and notes,
are so framed and dealt with as to be transferable, when property endorsed, by mere delivery,
and as they frequently convey, by estoppel against the corporation or against prior holders, as
good a title to the transferee as if they were negotiable, and inasmuch as a large commercial
use is made of such certificates as collateral security, and it is to the public interest that such
use should be simplify and facilitated by placing them as nearly as possible on the plane of
commercial paper, they are often spoken of and treated as quasi negotiable, that is as having
some of the attributes and partaking of the character of negotiable instruments, in passing from
hand to hand, especially where they are accompanied by an assignment and power of attorney,
executed in blank, to transfer them to anyone who may obtain possession as holders, even
though such assignment and power are under seal.

You might also like