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    Case Digest On Santamaria

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    iceiceice023
    Santamaria bought stocks through a brokerage firm and received the certificates endorsed in blank. She then used the certificates to secure a transaction with another brokerage firm. That second firm was shut down by the SEC. The bank claimed the certificates under a hypothecation agreement with the second brokerage firm. The Supreme Court ruled the certificates should not be returned to Santamaria, as she was negligent in the transaction and the bank was a bona fide transferee entitled to believe the second brokerage firm owned the certificates.

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    Case Digest On Santamaria

    Uploaded by

    iceiceice023
    133 views1 page
    Santamaria bought stocks through a brokerage firm and received the certificates endorsed in blank. She then used the certificates to secure a transaction with another brokerage firm. That second firm was shut down by the SEC. The bank claimed the certificates under a hypothecation agreement with the second brokerage firm. The Supreme Court ruled the certificates should not be returned to Santamaria, as she was negligent in the transaction and the bank was a bona fide transferee entitled to believe the second brokerage firm owned the certificates.

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    Case Digest on Santamaria

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    Santamaria bought stocks through a brokerage firm and received the certificates endorsed in blank. She then used the certificates to secure a transaction with another brokerage firm. That second firm was shut down by the SEC. The bank claimed the certificates under a hypothecation agreement with the second brokerage firm. The Supreme Court ruled the certificates should not be returned to Santamaria, as she was negligent in the transaction and the bank was a bona fide transferee entitled to believe the second brokerage firm owned the certificates.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    133 views1 page

    Case Digest On Santamaria

    Uploaded by

    iceiceice023
    Santamaria bought stocks through a brokerage firm and received the certificates endorsed in blank. She then used the certificates to secure a transaction with another brokerage firm. That second firm was shut down by the SEC. The bank claimed the certificates under a hypothecation agreement with the second brokerage firm. The Supreme Court ruled the certificates should not be returned to Santamaria, as she was negligent in the transaction and the bank was a bona fide transferee entitled to believe the second brokerage firm owned the certificates.

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    Case Digest on SANTAMARIA V. HONGKONG AND SHANGHAI BANKING CORP.

    89 PHIL 780 (1951) Facts: Santamaria bought ten thousand shares for the sum of about P8,000.00 of the Batangas Minerals, Inc. through the offices of Woo, Uy-Tioco and Naftaly, a stock brokerage firm. The buyer received the stock certificates in the name of Woo, Uy-Tioco and Naftaly and indorsed in blank by the firm. Subsequently, Santamaria placed an order for ten thousand shares of the Crown Mines, Inc. This time through another brokerage firm by the name of R.J. Campos and Company. To secure the transaction, she submitted the stock certificate representing her prior purchase of Batangas Minerals, Inc. stocks which certificate was still in the same condition as Santamaria received it. Upon Santamarias return to R.J. Campos and Company for payment, she found out that the firm was desisted by the SEC to continue transacting business She also learned that the certificate that was forwarded as security was in the possession of Hongkong and Shanghai Banking Corporation by virtue of a document of hypothecation wherein all shares in the brokerage firms custody was pledged to the bank. In this aspect, HKSBC sent the certificate to Batangas Minerals, Inc. for registration. Hence, this civil action. Issue: Whether or not the contested certificate of stock should be returned to Santamaria. Decision: The Supreme Court ruled that it should not be returned. Santamaria was negligent in the transaction and is stopped from claiming further title against the bona fide transfer to HKSBC. The latter was justified in believing that R.J. Campos and Company had title thereto considering it was indorsed in blank, and, therefore, deemed quasi-negotiable. Thus, HKSBC cannot be blamed for believing that such belonged to the holder and transferor. Furthermore, the bank was not obligated to look beyond the certificate to ascertain the ownership of the stock at the time it received the same from R.J. Campos and Company, for it was given to the bank pursuant to their letter of hypothecation.

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