Fua Cun vs Summers

Facts:
Chua Soco subscribed for five hundred shares of stock of China Banking Corporation at a
par value of P100 per share, paying the sum of P25,000, one-half of the subscription price. Soco
mortgaged his share in favor of Fua Cun to secure a a promissory note of 25k.
Chua Soco appears to have become indebted to the China Banking Corporation in the sum of
P37,731.68 for dishonored acceptances of commercial paper. An action was brought against him
to recover this amount together with his interest in the five hundred shares subscribed. It was
later on attached and the receipt was seized by the sheriff. The attachment was levied after the
defendant bank had received notice of the facts that the receipt had been endorsed over to the
plaintiff.
Fua Cun thereupon brought the an action maintaining that by virtue of the payment of the one-
half of the subscription price of five hundred shares Chua Soco in effect became the owner of
two hundred and fifty shares and praying that his lien on said shares. The trial court ruled that
Chua Soco acquired the right to two hundred and fifty shares fully paid up, upon which shares
the plaintiff holds a lien superior to that of the defendant Banking Corporation and ordering that
the receipt be returned to said plaintiff. From this judgment the defendants appeal.

Issue: Whether or not Chua Soco automatically became the owner of the shares in question

Ruling:
No. A subscriber does not become the owner of a particular number of shares
corresponding to the amount he already paid but merely holds a right of equity in the total
number of shares subscribed. Complete ownership over the total number of shares subscribed
will only vest with the stockholder upon payment of the whole subscription price. In the absence
of special agreement to the contrary, a subscriber for a certain number of shares of stock does
not, upon payment of one-half of the subscription price become entitled to the issuance of
certificates for one-half of the number of shares subscribed for; the subscriber's right consists
only in equity entitling him to a certificate for the total number of shares subscribed for by him
upon payment of the remaining portion of the subscription price. Hence, Fua Cun cannot acquire
any lien over the property.