G.R. No. 1528. November 10, 1905

The testamentary succession of the spouses Domingo Penabella and
Josefa de los Reyes being opened, the parties interested signed on the
30th of April, 1903, the division of the estate left at the death of
both, which was approved by the court on the 1st of the following month
of May. Three portions were made of the inheritance—one for each of the
children of the couple, Lucia, Jose, and Enrique, the latter
represented by his children, all of minor age, by the names of Enrique,
Emilia, Antonio, and Dominga.

Jose Enriquez, husband of Lucia, acted as executor. It does not
appear from the antecedents of the present case what was the portion
adjudicated to Lucia. The portions adjudicated to the other two
branches consisted only in twenty shares of stock in the limited stock
company known as “Compania Maritima,” issued at the value of 500 pesos, “the
current market value whereof is today (April 30, 1903) 600 pesos per
share, therefore representing the total sum of 12,000 pesos” (bill
of exceptions, page 3), though it appears from evidence adduced by the
parties to this action that in April such shares were sold at 400 and
450, the latter price being the more fixed on the 8th of said month.

The division being completed and effective, the executor, Enriquez,
filed a motion to add to the division made. The reason given was that
subsequent to the division the executor received from the “Compania Maritima”
ten additional shares, newly issued by said company, one for each two
of the original shares. In the motion he stated his intention to divide
these ten new shares into three portions, and not merely into two, for
the two children to whom the twenty original shares had been
adjudicated.

Aurora Barrio, as guardian of her minor children had with Enrique
Penabella, objected to the division of the ten new shares into three
portions and claimed five of them for the portion of her children. She
further petitioned that the executor indorse the ten original shares,
adjudicated in the division, to her, in order that her children could
be recognized as the owners thereof.

The court decided that the executor Jose Enriquez “deliver the
ten shares of stock to the heirs Jose and Aurora Barrio for her
children, five to each of these two parties, and that all the shares
adjudicated be indorsed in due form, in order that there be no
obstacles to the recognition of the right of the heirs” (p. 10 of the bill of exceptions).

The executor appeals from this judgment, alleging an error on the part of the judge in his decision “that
the ten shares given subsequently by the ‘Compania Maritima’ do not
increase the capital of the estate and do not modify it, but are merely
a nominal value.”

There is no error in the finding of the judge.

“The cause for which this company distributed one
share of stock for each two held by its shareholders was the increased
value of its fleet, according to new valuation, and also the importance
of its insurance and reserve funds, which had increased the capital of
the company to three million pesos, more or less. The distribution was
therefore made in the sense of giving the shareholders fifty per centum
of the capital which they had invested in the company, by handing them
one share for each two held by them,” (Pp. 8 and 9 of the bill of
exceptions.)

This being the basis for the increase of the shares of stock, the
judge was right in finding that the increase of the capital was merely
nominal; such an increase of shares of stock, instead of being an
increase of capital, would be rather a decrease thereof, if it could
affect it.

We therefore affirm the judgment appealed from in all its parts,
with the costs of this instance against appellant, judgment in this
sense to be pronounced after a lapse of ten days, and the cause to be
returned to the court below for execution thereof. So ordered.

Torres, Mapa, Johnson, and Carson, JJ., concur.