18. donnina c halley v printwell (gr 157549)
TRANSCRIPT
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Republic of the Philippines
Supreme CourtManila
THIRD DIVISION
DONNINA C. HALLEY,
Petitioner,
-versus-
PRINTWELL, INC.,
Respondent.
G.R. No. 157549
Present:
CARPIO MORALS, Chairperson,
!RIO",
!RSAMI",
#ILLARAMA, $R., andSR"O,JJ.
Promul%ated:
Ma& '(, )(**
x-----------------------------------------------------------------------------------------x
D E C I S I O N
BERSAMIN,J:
Stoc+holders of a corporation are liable for the debts of the corporation up to
the etent of their unpaid subscriptions. he& cannot ino+e the eil of corporate
identit& as a shield from liabilit&, because the eil ma& be lifted to aoid
defraudin% corporate creditors.
/eaffirm 0ith modification the decisionpromul%ated on Au%ust *1, )((),2*30hereb& the Court of Appeals4CA5 upheld thedecision of the Re%ional rial
Court, !ranch 6*, in Pasi% Cit& 4RC5, 2)3orderin% the defendants 4includin% the
petitioner5to pa& to Print0ell, Inc. 4Print0ell5 the principal sum of P)7*,'1).68
plus interest.
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Ant!"nt#
he petitioner 0asan incorporator and ori%inal director of !usiness Media
Philippines, Inc. 4!MPI5, 0hich, at its incorporation on "oember *), *796, 2'3hadan authoried capital stoc+ of P',(((,(((.(( diided into '((,((( shares each 0ith
a par alue of P*(.((,of 0hich 6;,((( 0ere initiall& subscribed, to 0it:
Subscriber "o. of shares otal subscription Amount paid
u *9,((( P *9(,(((.(( P1;,(((.((
?enaida #. >u ),((( P )(,(((.(( P;,(((.((
Rialino C. #inea ),((( P )(,(((.(( P;,(((.((
OAL 6;,((( P6;(,(((.(( P*96,;((.((
Print0ellen%a%ed in commercial and industrial printin%.!MPI
commissioned Print0ell for the printin% of the ma%ainePhilippines, Inc. 4to%ether
0ith 0rappers and subscription cards5 that !MPI published and sold. @or that
purpose, Print0ell etended '(-da& credit accommodations to !MPI.
In the period from October **, *799 until $ul& *), *797, !MPI placed0ithPrint0ell seeral orders on credit, eidenced b&inoices and delier& receipts
totalin%P'*8,'1).68.Considerin% that !MPI paidonl&P);,(((.((,Print0ell
sued!MPIon $anuar& )8, *77( for the collection of the unpaid balance
of P)7*,'1).68 in the RC.213
On @ebruar& 9, *77(,Print0ell amended thecomplaint in order to implead as
defendants all the ori%inal stoc+holders and incorporators to recoer on theirunpaid
subscriptions, as follo0s:2;3
"ame npaid Shares
u P*;,(((.((
Rialino C. #iBea P*;,(((.((
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OAL P ;8),;((.((
he defendants filed a consolidated ans0er,283aerrin% that the& all had paid
their subscriptions in full that !MPI had a separate personalit& from those of itsstoc+holders thatRialino C. #iBea had assi%ned his full&-paid up sharesto a
certain Derardo R. $acinto in *797 andthat the directors and stoc+holders of !MPI
had resoled to dissole !MPI durin% the annual meetin%held on @ebruar& ;, *77(.
o proe pa&ment of their subscriptions, the
defendantstoc+holderssubmitted in eidence!MPI official receipt 4OR5 no. )*6,
OR no. )*9, OR no. ))(,OR no. ))*, OR no. ))), OR no. ))', andOR no. ))6,to
0it:
Receipt "o. u P 1;,(((.((
)*9 Ma& *', *799 Albert . >u P *';,(((.((
))( Ma& *', *799 Roberto #. Cabrera, $r. P *';,(((.((
))* "oember ;, *796 Roberto #. Cabrera, $r. P 1;,(((.((
))) "oember ;, *796 ?enaida #. >u P ;,(((.((
))' Ma& *', *799 ?enaida #. >u P *;,(((.((
))6 Ma& *', *799
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irre%ularit& in the issuance of the ORs and obserin%that the defendants had used
!MPIs corporate personalit& to eade pa&ment and create inHustice, viz:
he claim of indiidual defendants that the& hae full& paid their
subscriptions to defend2a3nt corporation, is not 0orth& of consideration, because:J
a5 in the case of defendants-spouses Albert and ?enaida >u, it 0ill be noted
that the alle%ed pa&ment made on Ma& *', *799 amountin%to P*';,(((.((, is coered b& Official Receipt "o. )*9 4h. F)G5,
0hereas the alle%ed pa&ment made earlier on "oember ;, *796,
amountin% to P;,(((.((, is coered b& Official Receipt "o. ))) 4h.F'G5. his is co%ent proof that said receipts 0erebelatedl& issued Hust to
suit their theor& since in the ordinar& course of business, a receipt
issued earlier must hae serial numbers lo0er than those issued on a laterdate. !ut in the case at bar, the receipt issued on "oember ;, *796 has
serial numbers 4)))5 hi%her than those issued on a later date 4Ma& *',
*7995.
b5 he claim that since there 0as no call b& the !oard of u *;,(((.((
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Rialino #. #inea *;,(((.((
--------------------
otal P;8),;((.((
and it is an established doctrine that subscriptions to the capital stoc+ of a
corporation constitute a fund to 0hich creditors hae a ri%ht to loo+ forsatisfaction of their claims 4Philippine "ational !an+ s. !itulo+ Sa0mill, Inc.,
)' SCRA *'885 and, in fact, a corporation has no le%al capacit& to release a
subscriber to its capital stoc+ from the obli%ation to pa& for his shares, and an&a%reement to this effect is inalid 4#elasco s. Poiat, '6 Phil. 9()5.
he liabilit& of the indiidual stoc+holders in the instant case shall be pro-
rated as follo0s:
"ames Amount
u 66,*11.;;
?enaida #. >u 9,;67.(( Rialino #. #inea 9,;67.((
------------------
otal P')*,'1).6;2*;3
he RC disposed as follo0s:
/=R@OR, Hud%ment is hereb& rendered in faor of plaintiff and a%ainst
defendants, orderin% defendants to pa& to plaintiff the amount of P)7*,'1).68, asprincipal, 0ith interest thereon at )(K per annum, from date of default, until full&
paid, plus P'(,(((.(( as attorne&s fees, plus costs of suit.
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I.
= RIAL COR RR< I" =OL ! LIA!L O =
" O@ =IR "PAI< S!SCRIPIO" O@ S=ARS O@ SOC, I@
A">, = RIAL COR "O"=LSS RR< I" "O @I" APPLLA" AL!R > A"< = A!S"C O@ PROO@
CO"RO#RI"D =M.
II.= RC RR< I" =OL SAI< I" A!S"C O@ A"> S=O/I"D O@ RA-OR RSOR =RO.
II.I IS DRA# RROR O" = PAR O@ = COR A NO O RL
=A I"
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On Au%ust *1, )((), the CA affirmed the RC, holdin% that the defendants
resort to the corporate personalit& 0ould createan inHustice becausePrint0ell 0ould
thereb& be at a loss a%ainst 0hom it 0ould assert the ri%ht to collect, viz:
Settled is the rule that 0hen the eil of corporate fiction is used as a means
of perpetratin% fraud or an ille%al act or as a ehicle for the easion of an eistin%obli%ation, the circumention of statutes, the achieements or perfection of
monopol& or %enerall& the perpetration of +naer& or crime, the eil 0ith 0hich
the la0 coers and isolates the corporation from the members or stoc+holders 0hocompose it 0ill be lifted to allo0 for its consideration merel& as an a%%re%ation of
indiiduals 4First Philippine International Bank vs. Court of Appeals, );) SCRA
);75. Moreoer, under this doctrine, the corporate eistence ma& be disre%arded
0here the entit& is formed or used for non-le%itimate purposes, such as to eade aHust and due obli%ations or to Hustif& 0ron% 4Claparols vs. CI, 8; SCRA 8*'5.
In the case at bench, it is undisputed that !MPI made seeral orders oncredit from appellee PRI"/LL inolin% the printin% of business ma%aines,
0rappers and subscription cards, in the total amount of P)7*,'1).68 4Record pp.
'-;, Anne FAG5 0hich facts 0ere neer denied b& appellants stoc+holders thatthe& o0e appellee the amount of P)7*,'1).68. he said %oods 0ere deliered to
and receied b& !MPI but it failed to pa& its oerdue account to appellee as 0ell
as the interest thereon, at the rate of )(K per annum until full& paid. It 0as also
durin% this time that appellants stoc+holders 0ere in char%e of the operation of!MPI despite the fact that the& 0ere not able to pa& their unpaid subscriptions to
!MPI &et %reatl& benefited from said transactions. In ie0 of the unpaid
subscriptions, !MPI failed to pa& appellee of its liabilit&, hence appellee in orderto protect its ri%ht can collect from the appellants stoc+holders re%ardin% their
unpaid subscriptions. o den& appellee from recoerin% from appellants 0ould
place appellee in a limbo on 0here to assert their ri%ht to collect from !MPI sincethe stoc+holders 0ho are appellants herein are aailin% the defense of corporate
fiction to eade pa&ment of its obli%ations.2*63
@urther, the CA concurred 0ith the RC on theapplicabilit& of thetrust fund
doctrine, under 0hich corporate debtors mi%ht loo+ to the unpaid subscriptions for
the satisfaction of unpaid corporate debts, statin% thus:
It is an established doctrine that subscription to the capital stoc+ of a
corporation constitute a fund to 0hich creditors hae a ri%ht to loo+ up to for
satisfaction of their claims, and that the assi%nee in insolenc& can maintain an
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action upon an& unpaid stoc+ subscription in order to realie assets for the
pa&ment of its debts 4P!B vs. Bitulok "a#$ill, )' SCRA *'885.
Premised on the aboe-doctrine, an inference could be made that the funds,
0hich consists of the pa&ment of subscriptions of the stoc+holders, is 0here the
creditors can claim monetar& considerations for the satisfaction of their claims. Ifthese funds 0hich ou%ht to be full& subscribed b& the stoc+holders 0ere not paid
or remain an unpaid subscription of the corporation then the creditors hae no
other recourse to collect from the corporation of its liabilit&. Such occurrence 0aseident in the case at bar 0herein the appellants as stoc+holders failed to full& pa&
their unpaid subscriptions, 0hich left the creditors helpless in collectin% their
claim due to insufficienc& of funds of the corporation. Li+e0ise, the claim of
appellants that the& alread& paid the unpaid subscriptions could not be %ien0ei%ht because said pa&ment did not reflect in the Articles of Incorporations of
!MPI that the unpaid subscriptions 0ere full& paid b& the appellants
stoc+holders. @or it is a rule that a stoc+holder ma& be sued directl& b& creditors
to the etent of their unpaid subscriptions to the corporation 4%eller vs. C&B'arketin(, *1* SCRA 985.
Moreoer, a corporation has no po0er to release a subscription or its capital
stoc+, 0ithout aluable consideration for such releases, and as a%ainst creditors, a
reduction of the capital stoc+ can ta+e place onl& in the manner and under theconditions prescribed b& the statute or the charter or the Articles of Incorporation.
4P!B vs. Bitulok "a#$ill, )' SCRA *'885.2*93
he CAdeclared thatthe inconsistenc& in the issuance of the ORs rendered
the claim of full pa&ment of the subscriptions to the capital stoc+ un0orth& of
consideration andheld that the eil of corporate fiction could be pierced 0hen it
0as used as a shield to perpetrate a fraud or to confuse le%itimate issues, to 0it:
@inall&, appellants SPS >, ar%ued that the fact of full pa&ment for the
unpaid subscriptions 0as incontroertibl& established b& competent testimonial
and documentar& eidence, namel& hibits F*G, F)G, F'G E F1G, 0hich 0ere
neer disputed b& appellee, clearl& sho0s that the& should not be held liable for
pa&ment of the said unpaid subscriptions of !MPI.
he reliance is misplaced.
/e are hereb& reproducin% the contents of the aboe-mentioned ehibits, to
0it:
h: F*G > Official Receipt "o. )*6 dated "oember ;,
*796 amountin% to P1;,(((.(( alle%edl& representin% the initial pa&ment of
subscriptions of stoc+holder Albert >u.
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h: F)G > Official Receipt "o. )*9 dated Ma& *', *799
amountin% to P*';,(((.(( alle%edl& representin% full pa&ment of balance of
subscriptions of stoc+holder Albert >u. 4Record p. ';)5.
h: F'G > Official Receipt "o. ))) dated "oember ;,
*796 amountin% to P;,(((.(( alle%edl& representin% the initial pa&ment of
subscriptions of stoc+holder ?enaida >u.
h: F1G > Official Receipt "o. ))' dated Ma& *',*799 amountin% to P*;,(((.(( alle%edl& representin% the full pa&ment of
balance of subscriptions of stoc+holder ?enaida >u. 4Record p. ';'5.
!ased on the aboe ehibits, 0e are in accord 0ith the lo0er courtsfindin%s that the claim of the indiidual appellants that the& full& paid their
subscription to the defendant !MPI is not 0orth& of consideration, because, in the
case of appellants SPS. >, there is an inconsistenc& re%ardin% the issuance of
the official receipt since the alle%ed pa&ment made on Ma& *', *799 amountin%
to P*';,(((.(( 0as coered b& Official Receipt "o. )*9 4Record, p. ';)5,0hereas the alle%ed pa&ment made earlier on "oember ;, *796 amountin%
to P;,(((.(( is coered b& Official Receipt "o. ))) 4Record, p. ';'5. Suchissuance is a clear indication that said receipts 0ere belatedl& issued Hust to suit
their claim that the& hae full& paid the unpaid subscriptions since in the ordinar&
course of business, a receipt is issued earlier must hae serial numbers lo0er thanthose issued on a later date. !ut in the case at bar, the receipt issued on "oember
;, *796 had a serial number 4)))5 hi%her than those issued on Ma& *',
*799 4)*95. And een assumin% ar%uendo that the indiidual appellants hae paid
their unpaid subscriptions, still, it is er& apparent that the eil of corporate fictionma& be pierced 0hen made as a shield to perpetuate fraud andor confuse
le%itimate issues. 4Jacinto vs. Court of Appeals, *79 SCRA )**5.2*73
Spouses =alle& and #iBea moed for a reconsideration, but the CA denied
their $otion for reconsideration.
I##$#
Onl&
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= COR O@ APPALS RR< I" A@@IRMI"D I" OO =
ALLO/< =PIRCI"D O@ = #IL O@ CORPORA @ICIO"
III.
= =O"ORA!L COR O@ APPALS RR< I" APPL>I"D =RS @"<
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the articles of incorporationbein% at best reflectieonl& of the pre-incorporation
status of !MPI.
As her submissions indicate, the petitioner assails the decisions of the CA
on: 4a5 the propriet& of disre%ardin% the separate personalities of !MPI and itsstoc+holdersb& piercin% the thin eil that separated them and 4b5 the application of
the trust fund doctrine.
R$%&n'
he petition for reie0 fails.
I
T) RTC "&" not *&o%+t
t) Con#t&t$t&on +n" t)Rules of Court
he contention of the petitioner, that the RC merel& copied the
memorandum of Print0ell in 0ritin% its decision, and did not anal&e the records
on its o0n, thereb& manifestin% a bias in faor of Print0ell, is unfounded.
It is noted that the petition for reie0 merel& %enerall& alle%es that startin%
from its pa%e ;, the decision of the RC Fcopied erbatim the alle%ations of herein
Respondents in its Memorandum before the said court,G as if Fthe Memorandum
0as the draft of the
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his adHudicationthe memorandum or the parts of it he deems suitable,and &et not be
%uilt& of the accusation of liftin% or cop&in% from the memorandum. 2)13his
isbecause ofthe ao0ed obHectie of the memorandum to contribute in the proper
illumination and correct determination of the controers&."or is there an&thin%
unto0ard in the con%ruence of ideas and ie0s about the le%al issues bet0eenhimself and the part& draftin% the memorandum.he freQuenc& of similarities in
ar%umentation, phraseolo%&, epression, and citation of authorities bet0een the
decisions of the courts and the memoranda of the parties, 0hich ma& be %reat or
small, can be fairl& attributable tothe adherence b& our courts of la0 and the le%al
profession to 0idel& +no0nor uniersall& accepted precedents set in earlier Hudicial
actions 0ith identical factual milieus or posin% related Hudicial dilemmas.
/e also do not a%ree 0ith the petitioner that the RCs manner of 0ritin%the decisiondepriedher ofthe opportunit& to anal&e its decisionas to be able to
assi%n errors on appeal. he contrar& appears, considerin% that she 0as able to
impute and assi%nerrors to the RCthat she etensiel& discussed in her appeal in
the CA, indicatin% her thorou%h anal&sis ofthe decision of the RC.
Our o0n readin%of the trial courts decision persuasiel& sho0s that the
RC did compl& 0ith the reQuirements re%ardin% the content and the manner of
0ritin% a decision prescribed in the Constitution and theules of Court. he
decision of the RC contained clear and distinct findin%s of facts, and stated theapplicablela0 and Hurisprudence, full& eplainin% 0h& the defendants 0ere bein%
held liable to the plaintiff. In short, the reader 0as at once informed of the factual
and le%al reasons for the ultimate result.
II
Co-o+t -#on+%&t not to / $#" to (o#t &n0$#t&!
Print0ell impleaded the petitioner and the other stoc+holders of !MPI for
t0o reasons, namel&: 4a5 to reach the unpaid subscriptions because it appeared that
such subscriptions 0ere the remainin% isible assets of !MPI and 4b5 to aoid
multiplicit& of suits.2);3
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he petitionersubmits that she had no participation in the transaction
bet0een !MPI and Print0ellthat !MPI acted on its o0n and that shehad no hand
in persuadin% !MPI to rene%e on its obli%ation to pa&. =ence, she should not be
personall& liable.
/e rule a%ainst the petitioners submission.
Althou%h a corporation has a personalit& separate and distinct from those of
its stoc+holders, directors, or officers,2)83such separate and distinct personalit& is
merel& a fiction created b& la0 for the sa+e of conenience and to promote the
ends of Hustice.2)63he corporate personalit& ma& be disre%arded, and the indiiduals
composin% the corporation 0ill be treated as indiiduals, if the corporate entit& is
bein% used as a cloa+ or coer for fraud or ille%alit&as a Hustification for a 0ron%as an alter e%o, an adHunct, or a business conduit for the sole benefit of the
stoc+holders.2)93As a %eneral rule, a corporation is loo+ed upon as a le%al entit&,
unless and until sufficient reason to the contrar& appears. hus,the courts al0a&s
presume %ood faith, andfor that reason accord prime importance to the separate
personalit& of the corporation, disre%ardin% the corporate personalit& onl& after the
0ron%doin% is first clearl& and conincin%l& established. 2)73It thus behooes the
courts to be careful in assessin% the milieu 0here the piercin% of the corporate eil
shall be done.2'(3
Althou%h no0here in Print0ells amended complaint or in the testimonies
Print0ell offered can it be read or inferred from that the petitioner 0as
instrumental in persuadin% !MPI to rene%e onits obli%ation to pa& or that
sheinduced Print0ell to etend the credit accommodation b& misrepresentin% the
solenc& of !MPI toPrint0ell, her personal liabilit&, to%ether 0ith that of her co-
defendants, remainedbecause the CA found her and the other defendant
stoc+holders to be in char%e of the operations of !MPI at the time the unpaid
obli%ation 0as transacted and incurred, to 0it:In the case at bench, it is undisputed that !MPI made seeral orders oncredit from appellee PRI"/LL inolin% the printin% of business ma%aines,
0rappers and subscription cards, in the total amount of P)7*,'1).68 4Record pp.
'-;, Anne FAG5 0hich facts 0ere neer denied b& appellants stoc+holders thatthe& o0e4d5 appellee the amount of P)7*,'1).68. he said %oods 0ere deliered
to and receied b& !MPI but it failed to pa& its oerdue account to appellee as
0ell as the interest thereon, at the rate of )(K per annum until full& paid. It 0as
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also durin% this time that appellants stoc+holders 0ere in char%e of the operation
of !MPI despite the fact that the& 0ere not able to pa& their unpaid subscriptions
to !MPI &et %reatl& benefited from said transactions. In ie0 of the unpaidsubscriptions, !MPI failed to pa& appellee of its liabilit&, hence appellee in order
to protect its ri%ht can collect from the appellants stoc+holders re%ardin% their
unpaid subscriptions. o den& appellee from recoerin% from appellants 0ouldplace appellee in a limbo on 0here to assert their ri%ht to collect from !MPI since
the stoc+holders 0ho are appellants herein are aailin% the defense of corporate
fiction to eade pa&ment of its obli%ations.2'*3
It follo0s, therefore, that 0hether or not the petitioner persuaded !MPI to
rene%e on its obli%ations to pa&, and 0hether or not she induced Print0ell to
transact 0ith !MPI 0ere not %ooddefensesin the suit.
IIIn-+&" !"&to 2+ #+t( &t# !%+&2 (o2
$n-+&" #$/#!&-t&on#3#to!)o%"# 2$#t
-o* ($%% -+2nt o(t)& #$/#!&-t&on#
!oth the RC and the CA applied the trust fund doctrinea%ainst the
defendant stoc+holders, includin% the petitioner.
he petitionerar%ues, ho0eer,that the trust fund doctrine0asinapplicablebecause she had alread& full& paid her subscriptions to the capital
stoc+ of !MPI. She thus insiststhat both lo0er courts erred in disre%ardin% the
eidence on the complete pa&ment of the subscription, li+e receipts, income ta
returns, and releant financial statements.
he petitioners ar%umentis deoid of substance.
he trust fund doctrineenunciates a
rule that the propert& of a corporation is a trust fund for the pa&ment of
creditors, but such propert& can be called a trust fund onl& b& 0a& of analo%& or
metaphor. As bet0een the corporation itself and its creditors it is a simple debtor,
and as bet0een its creditors and stoc+holders its assets are in eQuit& a fund for the
pa&ment of its debts.2')3
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he trust fund doctrine, first enunciated in the American case of )ood v.
*u$$er,2''30as adopted in our Hurisdiction inPhilippine +rust Co. v. ivera,2'130here thisCourt declared that:
It is established doctrine that subscriptions to the capital of a corporationconstitute a fund to 0hich creditors hae a ri%ht to loo+ for satisfaction of their
claims and that the assi%nee in insolenc& can maintain an action upon an& unpaid
stoc+ subscription in order to realie assets for the pa&ment of its debts. 4#elasco
s. Poiat, '6 Phil., 9()5 2';3
/e clarif& that the trust fund doctrineis not limited to reachin% the
stoc+holders unpaid subscriptions. he scope of the doctrine 0hen the corporation
is insolent encompasses not onl& the capital stoc+, but also other propert& and
assets %enerall& re%arded in eQuit& as a trust fund for the pa&ment of corporate
debts.2'83All assets and propert& belon%in% to the corporation held in trust for the
benefit of creditors that0ere distributed or in the possession of the stoc+holders,
re%ardless of full pa&mentof their subscriptions, ma& be reached b& the creditor in
satisfaction of its claim.
Also, under the trust fund doctrine,a corporation has no le%al capacit& to
release an ori%inal subscriber to its capital stoc+ from the obli%ation of pa&in% for
his shares, in 0hole or in part,2'630ithout a aluable consideration,2'93or
fraudulentl&, to the preHudice of creditors.2'73he creditor is allo0ed to maintain anaction upon an& unpaid subscriptions and thereb& steps into the shoes of the
corporation for the satisfaction of its debt. 21(3o ma+e out apri$a faciecase in a
suit a%ainst stoc+holders of an insolent corporation to compel them to contribute
to the pa&ment of its debts b& ma+in% %ood unpaid balances upon their
subscriptions, it is onl& necessar& to establish that thestoc+holders hae not in %ood
faith paid the par alue of the stoc+s of the corporation.21*3
he petitionerposits that the findin% of irre%ularit& attendin% the issuance of
the receipts 4ORs5 issued to the other stoc+holderssubscribers should not affect her
becauseher receipt did not suffer similar irre%ularit&.
"ot0ithstandin% that the RC and the CA did not find an& irre%ularit& in the
OR issued in her faor,0e still cannot sustain the petitioners defense of full
pa&ment of her subscription.
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In ciil cases, thepart& 0ho pleads pa&ment has the burden of proin% it, that
een 0here the plaintiff must alle%e nonpa&ment, the %eneral rule is that the
burden rests on the defendant to proe pa&ment, rather than on the plaintiff to
proe nonpa&ment. In other 0ords, the debtor bears the burden of sho0in% 0ithle%al certaint& that the obli%ation has been dischar%ed b& pa&ment.21)3
Apparentl&, the petitioner failed to dischar%e her burden.
A receipt is the 0ritten ac+no0led%ment of the fact of pa&ment in mone& or
other settlement bet0een the seller and the bu&er of %oods, thedebtor or
thecreditor, or theperson renderin% serices, and theclient or thecustomer.21'3
Althou%ha receipt is the best eidence of the fact of pa&ment, it isnot conclusie,but merel& presumptienor is it eclusie eidence,considerin% thatparole
eidence ma& also establishthe fact of pa&ment.2113
he petitioners OR"o. ))6,presentedto proe the pa&ment of the balance of
her subscription, indicated that her supposed pa&ment had beenmade b& means of a
chec+. hus, to dischar%e theburden to proe pa&ment of her subscription, she had
to adduce eidence satisfactoril& proin% that her pa&ment b& chec+ 0asre%ardedas
pa&ment under the la0.
Pa&mentis defined as the delier& of mone&.21;3>et, because a chec+ is not
mone& and onl& substitutes for mone&, the delier& of a chec+ does not operate as
pa&ment and does not dischar%e the obli%ation under a Hud%ment.2183he delier& of
a bill of echan%e onl& produces the fact of pa&ment 0hen the bill has been
encashed.2163he follo0in% passa%e fromBank of Philippine Islands v. oeca2193is
enli%htenin%:
Settled is the rule that pa&ment must be made in le%al tender. A !)! not
%'+% tn" +n", t)(o, !+nnot !on#t&t$t + *+%&" tn" o( -+2nt.S&n! + n'ot&+/% &n#t$2nt on% + #$/#t&t$t (o 2on +n" not 2on,
t) "%&* o( #$!) +n &n#t$2nt "o# not, / &t#%(, o-+t +# -+2nt.
M "%&* o( !)!# "o# not "!)+' t) o/%&'+t&on $n" + 0$"'2nt.
T) o/%&'+t&on not t&n'$)" +n" 2+&n# #$#-n"" $nt&% t) -+2nt
/ !o22!&+% "o!$2nt +!t$+%% +%&6".
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To #t+/%) t)& "(n#, t) #-on"nt# t)(o )+" to -#nt
-oo(, not on% t)+t t) "%&*" t) !)!# to t) -t&t&on, /$t +%#o t)+t
t) !)!# n!+#)".he respondents failed to do so. H+" t) !)!#
/n +!t$+%% n!+#)", t) #-on"nt# !o$%" )+* +#&% -o"$!" t)
!+n!%%" !)!# +# *&"n! to -o* t) #+2. In#t+", t) 2% +*"
t)+t t) /%&*" &n 'oo" (+&t) t)+t t) !)!# n!+#)" /!+$# t) not not&(&" o( t) ")ono o( t) !)!# +n" t) +# )+" +%+"
%+-#" #&n! t) #$" t) !)!#.
!ecause of this failure of the respondents to present sufficient proof of
pa&ment, it 0as no lon%er necessar& for the petitioner to proe non-pa&ment,
particularl& proof that the chec+s 0ere dishonored. he burden of eidence is
shifted onl& if the part& upon 0hom it is lod%ed 0as able to adduce preponderanteidence to proe its claim.
Ostensibl&, therefore, the petitioners mere submission of the receipt issued
in echan%e of the chec+ did not satisfactoril& establish her alle%ation of full
pa&ment of her subscription. Indeed, she could not een inform the trial court
about the identit& of her dra0ee ban+,2173and about 0hether the chec+ 0as cleared
and its amount paid to !MPI.2;(3In fact, she did not present the chec+ itself.
heincome ta return 4IR5 and statement of assets and liabilities of !MPI,
albeit presented, had no bearin% on the issue of pa&ment of the subscription
because the& did not b& themseles proe pa&ment. IRsestablish atapa&ers
liabilit& for taes or a tapa&ers claim for refund. In the same manner, the depositslips and entries in the passboo+ issued in the name of !MPI 0ere hardl&
releant due to their not reflectin% the alle%ed pa&ments.
It is notable, too, that the petitioner and her co-stoc+holders did not support
their alle%ation of complete pa&ment of their respectie subscriptions 0ith the
stoc+ and transfer boo+ of !MPI. Indeed, boo+s and records of a corporation
4includin% the stoc+ and transfer boo+5 are admissible in eidence in faor of or
a%ainst the corporation and its members to proe the corporate acts, its financial
status and other matters 4li+e the status of the stoc+holders5, and are ordinaril& the
best eidence of corporate acts and proceedin%s.2;*3Specificall&, a stoc+ and transfer
boo+ is necessar& as a measure of precaution, epedienc&, and conenience
because it proides the onl& certain and accurate method of establishin% the
arious corporate acts and transactions and of sho0in% the o0nership of stoc+ and
li+e matters.2;)3hat she tendered no eplanation 0h& the stoc+ and transfer boo+
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he RC declared the stoc+holderspro rataliable for the debt4based on the
proportion to their shares in the capital stoc+ of !MPI5 and held the
petitionerpersonall& liable onl&in the amount of P*17,7;;.8;.
/e do not a%ree. he RC lac+ed the le%al and factual support for its
proratin% the liabilit&. =ence, 0e need to modif& the etent of the petitioners
personal liabilit& to Print0ell. he preailin% rule is that a stoc+holder is
personall& liable for the financial obli%ations of the corporation to the extent of his
unpaid subscription.2;'3In ie0 ofthe petitioners unpaid subscription bein%
0orth P)8),;((.((, she0as liable up to that amount.
Interest is also imposable on the unpaid obli%ation. Absent an& stipulation,interest is fied at *)Kper annu$from the date the amended complaint 0as filed
on @ebruar& 9, *77( until the obli%ation 4 i.e., to the etent of the petitioners
personal liabilit& of P)8),;((.((5 is full& paid.2;13
Lastl&, 0e find no basis to%rant attorne&s fees, the a0ard for 0hich must be
supported b& findin%s of fact and of la0 as proided under Article ))(9 of
the Civil Code2;;3incorporated in the bod& of decision of the trial court. he absence
of the reQuisite findin%s from the RC decision 0arrants the deletion of the
attorne&s fees.
ACCORDINGLY, 0e den& the petition for reie0 on certiorariand affirm
0ith modification the decision promul%ated on Au%ust *1, )(()b& orderin% the
petitionerto pa& to Print0ell, Inc. the sum of P)8),;((.((, plus interest of *)Kper
annu$to be computed from @ebruar& 9, *77( until full pa&ment.
he petitioner shall pa&cost of suit in this appeal.
SO ORDERED.
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LCAS P. BERSAMIN
Associate $ustice
WE CONCR:
CONCHITA CARPIOMORALES
Associate $ustice
Chairperson
ARTRO D. BRION MARTIN S. VILLARAMA
Associate $ustice Associate $ustice
MARIA LORDES P. A. SERENO
Associate $ustice
A T T E S T A T I O N
I attest that the conclusions in the aboe
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C E R T I 8 I C A T I O N
Pursuant to Section *', Article #III of the Constitution, and the
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2)83 Section ), Corporation Code Article 11 4'5, Civil CodeFrancisco 'otors Corporation v. Court of Appeals,
D.R. "o. *((9*), $une );, *777, '(7 SCRA 6), 9).2)63 Prudential Bank v. Alviar, D.R. "o. *;(*76, $ul& )9, )((;, 181 SCRA ';', '8)'artinez v. Court of
Appeals, D.R. "o. *'*86', September *(, )((1, 1'9 SCRA *'(, *17-*;(.2)93 2i(ht ail +ransit Authorit v. enus, Jr., D.R. "o. *8'69), March )1, )((8, 19; SCRA '8*, '6)34+ransport, Inc. v. 2ata(, D.R. "o. *;;)*1, @ebruar& *', )((1, 1)) SCRA 879 "ecosa v. eirs of 4r#in "uarez
Francisco, D.R. "o. *8(('7, $une )7, )((1, 1'' SCRA )6'5ochan v. /oun(, D.R. "o. *'*997, March *), )((*,';1 SCRA )(6, )))*evelop$ent Bank of the Philippines v. Court of Appeals, D.R. "o. **()(', Ma& 7, )((*, ';6
SCRA 8)8*el osario v. !ational 2abor elations Co$$ission, D.R. "o. 9;1*8, $ul& )1, *77(, *96 SCRA 666,
69(.2)73 "olidbank Corporation v. 'indanao Ferroallo Corporation, D.R. "o. *;';';, $ul& )9, )((;, 181 SCRA 1(7,
1)1-1); Construction 3 *evelop$ent Corporation of the Philippines v. Cuenca , D.R. "o. *8'79*, Au%ust *),
)((;, 188 SCRA 6*1, 6)6'atu(uina Inte(rated )ood Products, Inc. v. Court of Appeals, D.R. "o. 79'*(,October )1, *778, )8' SCRA 17(, ;(7.2'(3 Francisco 'otors Corporation v. Court of Appeals,supra, note )8.2'*3 ollo, p. 1;.2')3 1)A, /ords and Phrases, +rust Fund *octrine, p. 11;, citin%'cIver v. /oun( ard#are Co., ;6 S.. *87,
*6*, *11 ".C. 169, **7 Am. St. Rep. 76( 5alla(her v. Asphalt Co. of A$erica, ;; A. );7, )8), 8; ".$. Q. );9.2''3 ' Mason '(9, @ed Cas. "o. *6, 711.2'13 11 Phil 187 4*7)'5.2';3 Id., p. 16(.2'83 #illanuea,Philippine Corporate 2a#4)((*5, pp. ;;9, citin% Chica(o ock Island 3 Pac. .. Co. v.
o#ard, 6 )all., '7), *7 L. d. **6 "a#er v. oa(, *6 /all 8*(, )* L. d. 6'* andPull$an v. 7pton, 78 .S.')9, )1 L. d. 9*9.2'63 elasco v. Poizat, '6 Phil 9(), 9(9 4*7*95.2'93 Philippine +rust v. ivera,supra, note '1, pp. 16(-16*.2'73 Fo(( v. Blair, *'7 S **9 4*97*5.21(3 See elasco v. Poizat, '6 Phil 9(), 9(8 4*7*95.21*3 +ierne v. 2edden, *)* "/ *(;(.21)3 Alonzo v. "an Juan, D.R. "o. *'6;17, @ebruar& **, )((;, 1;* SCRA 1;, ;;-;8 7nion efiner Corporation
v. +olentino, "r., D.R. "o. *;;8;', September '(, )((;, 16* SCRA 8*', 8)*.21'3 Co$$issioner of Internal evenue v. 'anila 'inin( Corporation, D.R. "o. *;')(1, Au%ust '*, )((;, 189
SCRA ;6*, ;7(.2113 Philippine !ational Bank v. Court of Appeals, D.R. "o. **8*9*, April *6, *778, );8 SCRA 17*, '';-''8 +o#ne 3 Cit *evelop$ent Corporation v. Court of Appeals, D.R. "o. *';(1', $ul& *1, )((1, 1'1 SCRA ';8,
'8*-'8).21;3 Art. *)'), Civil Code.2183 Philippine Airlines, Inc. v. Court of Appeals, D.R. "o. 17*99, $anuar& '(, *77(, *9* SCRA ;;6, ;89.2163 Art. *)17, Civil Code.2193 D.R. "o. *68881, $ul& )*, )((9, ;;7 SCRA )(6, )*6-)*7 4underscorin% supplied for emphasis5.2173 See S" dated "oember 8, *77*, p. 1.2;(3 S" dated "oember 8, *77*, p. 1.2;*3 Biton( v. Court of Appeals 8Fifth *ivision9, D.R. "o. *)';;', $ul& *', *779, )7) SCRA ;(', ;)'.2;)3 2anuza v. Court of Appeals, D.R. "o. *'*'71, March )9, )((;, 1;1 SCRA ;1, 86.2;'3 4d#ard A. %eller 3 Co., 2td., v. C&B 5roup 'arketin(, Inc., D.R. "o. L-897(6, $anuar& *8, *798, *1* SCRA
98, 7' citin% da. *e "alvatierra v. on. 5arlitos etc, and efuerzo, *(' Phil, 6;6, 68' 4*7;95.2;13
See4astern "hippin( 2ines, Inc. v. Court of Appeals, D.R. "o. 761*), $ul& *), *771, )'1 SCRA 69.2;;3 Buni v. Factor, D.R. "o. *6);16, $une '(, )((7, ;7* SCRA ';(, '8': 2apanda A(ricultural and
*evelop$ent Corporation 82A*4C&9 v. An(ala, D.R. "o. *;'(68, $une )*, )((6, ;); SCRA ))7Pa1uo v. Courtof Appeals, D.R. "o. *18'81, $une ', )((1, 1'( SCRA 17), ;)1.
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