FLORENTINO GENATO, FRANCISCO GENATO, AND GENATO COMMERCIAL CORPORATION, PETITIONERS, VS. FELISA GENATO DE LORENZO, RESPONDENT.

Appeal by certiorari from a judgment of the Court of Appeals in
its Case CA-G. R. No. 28052-R, that reversed that of the Court of First
Instance of Manila, ordering the cancellation of Certificates of Stock Nos. 118
and 119 of the Genato Commercial Corporation and the
issuance of another in lieu thereof in the name of the Administrator of the
Estate of Simona B. Vda. de
Genato.

The decision under appeal states the background facts and issues
to be as follows:

“The Genato Commercial Corporation
is a family corporation, founded by the spouses Vicente Genato
and Simona D. de Genato.  The spouses had six children named Francisco,
Florentino, Manuel, Carmen, Felisa
and Juan all surnamed Genato.  As of March
26, 1928, Simona B. de Genato had 430 shares of stock, par value P100.00 per
share, represented by share certificate No. 7 signed by Vicente Genato, President, and Simona B.
de Genato, Secretary-Treasurer.

“On December 23,
1942, a majority of the members of the Board of Directors composed
of Francisco G. Genato, President, Simona B. Vda. de Genato, Director and Secretary-Treasurer, and Florentino Genato, Vice-President
and Director, held a meeting at 1075-1079 R. Hidalgo, Manila,
at which Florentino Genato,
was elected and designated Assistant Secretary-Treasurer of the
Corporation.  The reason for said
election and designation appears in the minutes of the meeting of the Board
(Exhibit 1) which reads as follows:

‘MINUTES
OF THE MEETING OF THE BOARD OF DIRECTORS OF THE GENATO COMMERCIAL CORPORATION

Held on the 23rd day of December, 1942, at 1075-1079 R. Hidalgo, Manila

‘There were present at the meeting the following directors:

Simona
B. Vda. de Genato

Francisco G. Genato

Florentino
Genato

Absent: 
Carmen Genato Luz and Felisa
Genato Lorenzo

‘Mr. Francisco G. Genato presided over
the meeting and Mr. Florentino Genato
acted as Secretary and kept the minutes of the proceedings.

‘Doña Simona Vda. de Genato explained that due
to her advanced age it is more convenient that Florentino
Genato, now Vice-President of the cor­poration, act
as Assistant Secretary-Treasurer as, as a matter of fact, he has heretofore
been acting as such, since the work is rather strenous.  Thereupon, Doña
Simons Vda. de Genato
moved, seconded by the Chairman, that:

‘RESOLVED, that Mr. Florentino Genato be elected and designated Assistant
Secretary-Treasurer of the Corporation.

‘The above resolution was unanimously carried.

‘At this point the chairman invited the attention of the Board that
it might be advis­able to reward the services of Mr. Elpidio
Villamiel by giving him a bonus of one share of stock
of the corporation out of the Treasury stock, considering that the par value
thereof is only P100.00.  On motion duly
made and seconded, it was

‘RESOLVED, That the corporation gives as it does hereby give and
grant unto Mr. Elpidio Villamiel
a bonus of one share of stock of the par value of P100.00 out of the Treasury
stock of the corporation, for faithful services rendered, hereby authorizing
the officers of the corporation to issue unto him the corresponding stock
certificate.

‘There being no further business the meeting was adjourned.

‘(Sgd.)
FLORENTINO GENATO

Secretary of the meeting

‘(Sgd.)
FRANCISCO G. GENATO

Chairman of the meeting.’

“Four or five days thereafter, Florentino
Genato as Assistant Secretary-Treasurer cancelled
share certificates Nos. 7 and 18 and in lieu thereof issued share certificate
No. 118 for 265 shares in favor of Florentino Genato and share certificate No. 119 for 265 shares in
favor of Francisco G. Genato.

“The new share certificates were not presented in evidence;
they were merely mentioned by Florentino Genato in the course of his testimony as a witness called
by the plaintiff later on as a witness for the defendants.

“Simona B. Vda.
de Genato having died shortly after liberation, an
intestate proceeding of her estate (Special Proc. 71546, Court of First
Instance, Manila) was filed.  The
inventory (Exhibit D), which did not include the shares in litigation, presented
in the proceeding by Francisco G. Genato as special
administrator dated March 1, 1946 showed that the value of the estate left by
the decedent was approximately P39,806.58.

“On July 8, 1948, the Philippine Trust Company, judicial
administrator of the intestate estate, and the legal heirs Manuel Genato, Felisa Genato de Lorenzo and Juan Genato
filed the complaint in the case at bar to recover from the other two legal
heirs, Florentino Genato
and Francisco G. Genato, the 530 shares of stock in
order that they may be included in the inventory of the intestate estate of
their deceased mother and in due course distributed among all the surviving
children of the decedent.  In their
answer, the defendants Florentino Genato
and Francisco G. Genato alleged that they had
acquired the ownership of the 530 shares by simple donation from their mother.

“The trial court found that defendants Francisco G. Genato and Florentino Genato had acquired the ownership of the 530 shares by
simple donation from their widowed mother on December 25, 1942.  From the judgment dismissing the complaint,
plaintiff Felisa Genato de
Lorenzo appealed.

“Appellant contends that there was no simple donation of the
530 shares in litigation.  We find the
contention meritorious in view of the following considerations:

“(1) There is no clear, satisfactory and convincing evidence
of the alleged simple donation of the shares in litigation having a par value
of P53,000.00.  Florentino
Genato, as a witness called by the plaintiffs and
subsequently as a witness for the defendants, substantially testified that on
December 25, 1942, Juan Camus, an employee of the
Corporation, came to see him at the Royal Market located on Echague
Street and told him that his mother wanted to see him; that he immediately left
and saw his mother at the residence at the back part of the premises of the
Corporation situated on R. Hidalgo Street; that his mother delivered to him the
two (2) share certificates Nos . 7 and 18, already
indorsed; that is, with the blank spaces of the indorsement
already filled by typewriter and her signature already affixed at the bottom of
the indorsement and that his mother told him
‘transfer them’; that two or three days later as Assistant Secretary-Treasurer
of the Corporation, he cancelled share certificates Nos. 7 and 18 and issued in
lieu thereof the new share certificates No. 118 in favor of Florentino
Genato for 265 shares and No. 119 in favor of
Francisco G. Genato for 265 shares.

“The indorsement appearing on the
back of share certificate No. 7 (which is identical, except as to the number of
shares, to that appearing on the back of share certificate No. 18), with the
typewritten words filling the blank spaces indicated by underlines, reads as
follows:

‘For value Received, I hereby sell, assign and transfer unto
Florentino Genato
and Francisco G. Genato, his heirs,
administrators and legal representatives, the Shares of the Capital stock
represented by the within Certificate, and all rights, interests,
participations and privileges represented thereby, and do hereby irrevocably
constitute and appoint Genato Commercial
Corporation to transfer the said Stock on the books of the within
corporation with full power of substitution in the premises.

‘Date December 25, 1942

(Sgd.)  S. VDA. de GENATO

(Signature of
Owner)

Signed in the presence
of

(Sgd.) Juan Camus‘”

Finding that there had been neither consideration for the sale of
shares nor valid donation of the same, due to lack of proper acceptance and
non-compliance with statutory requirements, and that the appeal of respondent Felisa Genato de Lorenzo inured
to the benefit of her other co-plaintiffs, the Court of Appeals, as previously
related, in­validated the transfer of the shares to Florentino
and Francisco Genato, and decreed that said stock
remained a part of the estate of the transferor.

For the brief of appellants, the following errors are assigned:

1. Respondent and respondent-appellee
failed to prove by preponderance of evidence that there was fraud committed by
petitioners in the transfer of the shares of stock in their names.

2. There has been no showing that the transfer made by Simona B. Vda. de Genato of her shares of stock to petitioners was not made
validly and regularly.

3. The evidence shows that there was a simple donation made by Simona B. Vda. de Genato in favor of the herein petitioners Florentino Genato and Francisco Genato; and

4. The Judgment of the lower court became final with respect to the
other plaintiffs who did not appeal therefrom.

We find the appeal without merit.

With respect to the first two errors assigned, it is immaterial
that the evidence did not show any fraudulent machinations on the part of
appellants to secure the consent of their mother to the transfer of the shares,
if the uncontested evidence of record showed that the transfer was not
supported by valid causa or consideration which in
itself is a ground for invalidating the transaction.  It was so charged by the plaintiffs in the
Court of First Instance and expressly so found by the Court of Appeals.  This finding being one of fact, reached after
consideration of the evidence, is binding upon this Court.  In addition, it is confirmed by the
petitioner’s own claim that their mother’s shares in the corporation were
donated to them, and not sold, as recited by the indorsement
of Certificates Nos. 7 and 18 of the Genato
Commercial Corporation.

Granting that even private transactions are to be presumed fair
and regular, the presumption is only prima facie, and must yield
to evidence.  By his own testimony, Florentino Genato showed that the
indorsement of the shares can not be taken literally,
and that it was used to disguise a different factual situation.  Hence, the presumption invoked, by appellants
can not apply, since they have themselves avowed the existence of a simulation.

The key question, therefore, is whether there has been a valid
donation as appellants claim.  The Court
of Appeals concluded that there was none, and we find no reason to overturn the
opinion thus reached.  Assuming, ad
arguendo, that the late Simona
Vda. de Genato gave the
Certificates of Stock Nos. 7 and 18 to Florentino
with instructions to transfer the same to him and his brother, this act did not
constitute a valid manual donation in law for lack of proper acceptance (Civ. Code of 1889, Art. 630).  Incontestably, one of the two donees was not present at the delivery, and there is no
showing that he, Francisco Genato, had authorized his
brother, Florentino to accept for both of them.  As pointed out by Manresa
in his Commentaries to the Civil Code of 1889 (Vol. V, 6th edition, pp.
131-132, 141-142), the delivery by the donor and the acceptance by donee must be simultaneous, and the acceptance by a person
other than the true donee must be authorized by a
proper power of attorney set forth in a public document.  None has been claimed to exist in this case.

Since by appellants’ own version, the donation intended was a
Joint one to both donees, one could not accept
independently of his co-donee, for there is no
accretion among donees unless expressly so provided
(Art. 637) or unless they be husband and wife.

There being neither valid donation, nor sale, the cancellation of
the original certificates of stock as well as the issuance of new certificates
in the name of Florentino and Francisco Genato was illegal and improper for lack of valid
authority.  It is a consequence of this
that the shares in question are deemed never to have ceased to be property of
their mother, Simona B. de Genato,
and must be considered still forming part of the assets of her estate.

It is finally contended by appellants that as appellee
Felisa Genato de Lorenzo
was the only one who appealed from the decision of the Court of First Instance
upholding the transaction, her appeal can not inure to the benefit of the other
children of Simona de Genato.

This contention would be plausible if the interest of each child
or descendant had been susceptible of individual delimitation.  But as the estate of the mother is still
pending liquidation, the interest of each heir can not be deemed independent of
that of the others.  As correctly
declared by the Court of Appeals, the interests of all the heirs are so
interwoven as to become inseparable, and the appeal by one heir prevented the
appealed decision from becoming final as to the others.  Hence, reversal of the Court of First
Instance decision as to one heir is reversal as to all of them (Municipality
of Orion vs. Concha,
50 Phil. 679).^[1]
Actually, none of the plaintiff heirs attempted to have himself declared owner
of any portion of the shares in question. 
They could not do so, since the necessities of the liquidation of their
mother’s estate might require the eventual disposition of all or part of the
shares to strangers in order to meet obligations of the estate.

PREMISES CONSIDERED, the decision of the Court of Appeals
is affirmed.  Costs against
petitioners-appellants.

Concepcion, C.J., Dizon,
Makalintal, Zaldivar,
Sanchez, Castro, and Angeles, JJ., concur.

^[1]
See also:  Castillo vs. Teodoro, L-10486, Nov.
27, 1957; Unsay vs. Judge Muñoz Palma,
L-17712, May 31, 1965.