EDWARD A. KELLER & CO., LTD. v. COB GROUP MARKETING, this in his Answer.
this in his Answer. Keller now sued COB, its stockholders and the
INC., et al.
G.R. No. L-68097 | 16 January 1986
DOCTRINE: A stockholder is personally liable for the financial
obligations of a corporation to the extent of his unpaid subscription.
FACTS
1. Edward A. Keller & Co., Ltd. (KELLER) appointed COB Group
Marketing, Inc. (COB) as exclusive distributor of its household products,
Brite and Nuvan in Panay and Negros. Under the sales agreement, Keller
sold on credit its products to COB.
2. As security for COB’s credit purchases1 MANAHAN mortgaged her land
to Keller.
3. Thereafter, Keller and COB executed a second sales agreement whereby
COB’s territory was extended to Northern and Southern Luzon.
4. As security for the credit purchases 2 of COB for that area, TOMAS
LORENZO, JR. and his father LORENZO, SR. (now deceased) executed a
mortgage on their land in Nueva Ecija.
5. From the minutes of the meeting, Bax (COB’s President and General
Manager), informed the COB’s board of directors that COB owed Keller
about P179,000. Bax was authorized to negotiate with Keller for the
settlement of his firm's liability.
6. The stockholders of COB, Adao and Lorenzo, Jr., proposed to pay Keller
P5,000 on 30 November 1971 and thereafter every thirtieth day of the
month for three years until COB’s mortgage obligation had been fully
satisfied. They also proposed to substitute the Manahan mortgage with a
mortgage on ADAO's lot at Quezon City.
7. Under the statement of account, COB owed Keller P184,509.60. Bax
calimed that COB overpaid Keller P100,596.72, although he did not alleged
1
up to the amount of P35,000
2
up to P25,000
mortgagors, Manahan and Lorenzo.
ISSUE
W/N a stockholder can be personally liable for financial obligations of the
corporation.
HELD
Yes. The SC ruled in favor of Keller.
What’s important for Corp:
As to the liability of the stockholders, it is settled that a stockholder is
personally liable for the financial obligations of a corporation to the extent
of his unpaid subscription.
The following respondents are solidarity liable with COB Group up to the
amounts of their unpaid subscription to be applied to the company's liability
herein:
-> Bax P36,000; De Castro, P36,000; De la Fuente, P12,000; S. Ordonez,
P12,000; T. Ordonez, P3,000; M. Ordonez, P3,000; A. Ordonez P3,000;
Lorenzo, Jr., P3,000 and Adao, P6,000.
Ruling on the liability of COB:
The lower courts were wrong in nullifying the admissions of liability made
by Bax as president and general manager of COB and in giving credence to
the alleged overpayment computed by Bax.
-> First, there was a conference held to discuss COB’s liability (showing
their admissions of their liability). Second, Bax in that discussion did not
present his reconciliation statements to show overpayment. His Exhibits 7
and 8 (his evidence on overpayment) were an afterthought. He presented
them long after the case was filed.