This case was submitted to and decided by the Court of First Instance of Manila upon an agreed statement of facts which may be restated as follows:

On March 8, 1937, the plaintiff-appellee obtained judgment in the Court of First Instance of Manila against Silverio Salvosa  whereby the latter was  ordered to transfer and deliver to  the former 116 active shares and an undetermined number of shares in escrow of the Filipinas Mining Corporation and to  pay the sum of P500 as damages,  with the proviso that the escrow shares shall be transferred and delivered to the plaintiff only after they  shall have  been released by the company.  On June 25,  1937, a writ of garnishment was served by  the sheriff of Manila upon the Filipinas Mining Corporation to satisfy the said judgment; and  on July 29, 1937,  the Filipinas Mining  Corporation advised the sheriff of Manila that according to its books the judgment debtor Silverio Salvosa was the registered owner of 1,000 active shares and about 21,338 unissued shares held in escrow  by  the said  corporation.  The sheriff sold the 1,000 active shares at public auction,  realizing therefrom only the sum of P10, which was applied in partial satisfaction  of the  judgment for damages in the sum of P500.

The present case, which was instituted by Antonio Escaño against, the Filipinas Mining Corporation and the Standard Investment of the Philippines, relates to the escrow shares involved in the garnishment proceeding above mentioned. It appears that after the complaint in the original case of Escano vs. Salvosa was filed but before judgment was rendered therein, that is to say, on November 21, 1936, Silverio Salvosa sold to Jose P. Bengzon all his  right, title, and interest in and to 18,580 shares of stock of the Filimnas Mining Corporation held in escrow which the said Salvosa was entitled to receive, and which Bengzon in turn  subsequently sold and transferred to the present defendant-appellant,  standard Investment of  the Philippines.  Neither Salvosa's sale to Bengzon nor Bengzon's sale to the Standard Investment of the Philippines was notified to and recorded in the books of  the Filipinas Mining Corporation until December 7,1940, that is to say, more than three years after the escrow shares in question were attached by garnishment served on the Filipinas Mining Corporation as hereinbefore set forth.   On January  24, 1941, the defendant Filipinas Mining Corporation issued in favor of the defendant  Standard Investment of the Philippines certificate of stock for the 18,580 shares formerly held in escrow by Silverio Salvosa and which had been claimed  adversely by the present plaintiff-appellee on the one hand and the Standard Investment of the Philippines on the other, the first by virtue of garnishment proceedings and the second by virtue of the sale made to it by Jose P. Bengzon as aforesaid.

The question to determine is whether the issuance by the Filipinas Mining Corporation of the said 18,580 shares of its stock to the Standard Investment of the Philippines was valid as against the attaching judgment creditor of the original owner, Silverio Salvosa, namely, the present plaintiff- appellee Antonio  Escaño.

In addition to the above stipulated facts, the trial court found from the supplementary oral evidence adduced by the plaintiff "that several promises were made by the secretary of the defendant Filipinas  Mining Corporation that as soon as the escrow shares pertaining to Silverio Salvosa were released he (the secretary) would notify the plaintiff so that the latter might take the proper action for the execution of the judgment rendered in the said case entitled 'Antonio Escaño vs. Silverio Salvosa,'  civil case No. 50575  of the Court of First Instance  of Manila.  But the secretary, instead of complying with his  promises,  issued the escrow shares to the defendant Standard Investment of the Philippines  *  *  *"

The trial court held that the transfer of the escrow shares in question from Salvosa to Bengzon and from Bengzon to the Standard Investment of the Philippines, not having been recorded in the books of the corporation as required by section 35 of the  Corporation Law, could not prevail over the garnishment previously made by the plaintiff of the  said shares, and rendered judgment "ordering the defendants Filipinas Mining Corporation and the Standard Investment of the Philippines to issue to the plaintiff out of the escrow shares which formerly belonged to Silverio Salvosa, 4,152 shares of the Filipinas Mining Corporation and to pay to him the dividends which have been and may be declared on said shares until  the delivery thereof to the plaintiff; and ordering the sheriff to levy execution on the  remaining shares which formerly belonged to Silverio Salvosa in order to satisfy the balance of the judgment rendered in the  civil case entitled 'Antonio Escaño vs. Silverio Salvosa,'   civil case No. 50575 of the Court of First Instance of Manila, with costs  against the defendants."   From that judgment the Standard Investment of the Philippines has appealed to this Court and makes the following assignment of errors:

"1. The trial court erred in holding that section 35 of Act 1459 and the doctrine laid  down  in the case of Uson vs. Diosomito, 61 Phil.,  535, are applicable  to the case at  bar.

"2. The trial court erred  in 'ordering the sheriff to  levy execution, on the remaining snares of the 18,580 shares to satisfy the balance of  the judgment rendered in civil  case No. 50575 of the Court of First Instance of Manila'; and in not holding that because of the delay or neglect for an unreasonable length of time by the plaintiff to enforce his execution, the 18,580 shares affected in this litigation has been discharged thru his waiver or abandonment."

1. Sections 431 and  432 of the  Code of Civil  Procedure (now sections 7 and 8 of Rule 59), which were in force at the time the garnishment in question was served on the defendant Filipinas Mining Corporation, provide as follows:

"Sec. 431. Executing Order of Attachment as to Debts and Credits. Debts and credits, and other personal property not capable of manual delivery, shall be attached by leaving: with the person owing such debts or having in his possession or under his control, such credits and other personal property,  a copy of  the  order of attachment, and a notice that the debts owing by  him to the defendant, or the credits  and other personal property in his possession or under his control, belonging to the defendant, are attached in pursuance of such order.

"Sec. 432. Effect of Attachment of  Debts and Credits. All persons having in their possession or  under their control any credits  or other personal property belonging to the defendant, or owing any debts to the defendant at the time of service upon them  of a copy of the order of  attachment and notice as provided  in  the last section, shall be, unless such property be delivered up or transferred, or such debts be paid to the clerk  of the court in which the action is pending,  liable to  the plaintiff for the  amount of such credits, property, or debts, until  the attachment be discharged, or any judgment recovered by him be  satisfied."

Under the section last above  quoted, the Filipinas Mining Corporation became liable  to the plaintiff for the shares of stock mentioned in  its return to the sheriff of July 29, 1937, wherein it informed the latter in response to the notice of garnishment "that  according to its books said Silverio Salvosa was the registered owner of 1,000 active shares evidenced  by certificate of stock No. 235 and about  21,338 unissued shares held  in escrow by the defendant Filipinas Mining Corporation."

Counsel for the  appellant Standard Investment  of the Philippines  contends  that a distinction should be  drawn between issued shares evidenced by certificates of stock and unissued shares  held in escrow, in that while the transfer of the former is subject  to the restriction contained in  section 35 of the Corporation Law, that of the latter is not.  The said section, insofar as pertinent here, reads as follows:

"*  *  *  snares  of stock so  issued are personal property and may be transferred by  delivery of the certificate indorsed by the owner or his attorney in fact or other person legally authorized to make the transfer.  No transfer, however, shall be valid, except as between the parties, until the transfer is entered and noted upon the books of the corporation so as to show the  names of the  parties to the transaction, the date of the transfer, the number of the certificate, and the number of shares transferred."

It is admitted that under  this legal provision and the decision of this Court in Uson vs. Diosomito, 61 Phil. 535, the transfer of duly issued shares of stock is not valid as against third parties and the corporation until it is noted upon  the books of the corporation; but it is contended that the transfer of unissued shares of stock held in escrow is valid  against the whole  world although not  notified to the corporation and not noted upon its books.  Since the sale, transfer, or assignment of unissued shares  of stock held in escrow is not specifically provided for by law, the question has to be resolved by resorting  to analogy.   What is the reason of the law for requiring the recording upon the books of the corporation of transfers of shares of stock as a condition precedent to their validity against the corporation and third  parties?  We imagine that it is (1)  to enable the corporation to know at all times who its actual stockholders are, because mutual rights and obligations exist between the corporation and its stockholders; (2) to afford to the corporation an opportunity to object or refuse its consent to the transfer in case it has any claim against the stock sought to be transferred, or for any other valid reason; and (3) to avoid fictitious  or fraudulent transfers.  Do these  reasons hold  as to the transfer  of unissued shares held in escrow? To sustain appellant's contention is to declare that they do not.  But we see no valid reason for treating unissued shares held in escrow differently from issued shares insofar as their sale and transfer is concerned.   In both cases the corporation is entitled to know who the actual owners of the shares are, and to object to the transfer upon any valid ground. Likewise, in both  cases the possibility  of fictitious or fraudulent transfers exists.  The only reason advanced by the appellant for exempting the  transfer of unissued shares from recording is that in case of unissued shares there is no certificate number to be recorded.  But that is a mere detail which does not affect the reasons behind the rule.   The lack of such  detail does  not make it impossible to record the transfer upon the books of the corporation so as to show the names of the parties to the transaction, the date of the transfer, and the number of shares transferred, which are the most essential data. As a matter of fact, the defendant Filipinas Mining Corporation was able to take note of the transfer of the escrow  shares in question to the Standard Investment of the Philippines on December 7, 1940, without knowing the certificate number that would correspond  to said shares.

Moreover,  it seems illogical and unreasonable to hold that inactive or unissued shares still held by the corporation in escrow pending receipt of authorization from the Government to issue them, may be negotiated or transferred unrestrictedly and more freely than active or issued  shares evidenced by certificates of stock.

We are, therefore, of the opinion and so hold that section 35 of the Corporation Law, which requires  the registration of transfers  of shares of stock upon the books of the corporation as a condition precedent to their validity against the corporation and third parties, is also applicable to unissued shares held by the corporation in escrow.

2.  Under its second  assignment of error appellant contends that appellee has been guilty of laches in  neglecting for an  unreasonable length of time to enforce its levy  on the 18,580 shares of stock in question by having them sold at public auction, and that, consequently, said levy should be considered discharged through waiver or abandonment. We find no factual basis for the alleged laches and abandonment.   The  trial court found that the secretary  of the defendant Filipinas Mining Corporation  had  repeatedly promised the plaintiff that he would notify the latter as soon as  the  escrow shares pertaining to  Silverio Salvosa  were released so that he (plaintiff) might take the proper action for the execution of his judgment.  The Filipinas Mining Corporation having advised the sheriff that it was holding the escrow shares of the judgment debtor Silverio Salvosa, the plaintiff  as execution creditor had the right to  wait for the release or issuance of said shares before having, the same  sold at public auction, so long as the period of five years within which to execute his judgment  had not yet lapsed.  Moreover, the judgment itself provided "that the escrow shares  shall be  transferred  and  delivered to the plaintiff only after they have been released by the company." It is stated in the stipulation of facts that it was only  after the Filipinas Mining Corporation had issued the  escrow shares in favor of the Standard Investment of the Philippines that the plaintiff Antonio Escano came to know that Jose P. Bengzon and the Standard Investment of the Philippines had acquired Silverio Salvosa's rights to the shares in question.  Upon these facts, together with the consideration that the delay had not in any way misled the appellant  to its prejudice, we find appellant's second assignment of  error untenable.

The judgment appealed from is affirmed, with costs.

Yulo, C.J., Moran, Horrilleno, and Bocobo, JJ., concur.

PARAS, J.: I concur in the result.