Commercial Law, 2013 Bar — Question MC-I

MULTIPLE CHOICE

Claude, the registered stockholder of 1,000 shares in ABC Corp., pledged the shares to Conrad by endorsement in blank of the covering stock certificates and execution of a Deed of Assignment of Shares of Stock, intended as collateral for a loan of P1.0 Million that was also supported by a separate promissory note. Under these facts, is there a valid pledge of the shares of stock to Conrad? (1%) A) No, because shares of stock are intangible personal properties whose possession cannot be delivered and, hence, cannot be the subject of a pledge; B) No, because the pledge of shares of stock requires double registration with the Register of Deeds of the principal place of business of the corporation and of the residence of the pledgor; C) Yes, because endorsement and delivery of the certificates of stock is equivalent to the transfer of possession of the covered shares to the pledgee; D) Yes, because the execution of the Deed of Assignment of Shares of Stock is equivalent to a lawful pledge of the shares of stock.

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