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 In 1918, the Cooperativa Naval Filipina was duly incorporated under the Philippine laws, with
capital of P100,000, divided into 1,000 shares with par value of P100 each
 Among the incorporators was Mariano Rivera, who subscribed 450 shares with value of
 The Articles of Incorporation were duly registered in the Bureau of Commerce and Industry
 Sometime later, the company became insolvent with Philippine Trust Company as assignee in
the bankruptcy
 Philippine Trust Company then instituted a case against Marciano Rivera to recover the
balance of P22,500 for Rivera’s subscription to the capital stock of Cooperative Naval
 Defense of Marciano Rivera: after Cooperative had been incorporated, in the meeting of
stockholders, a resolution was adopted with the effect that the capital should be reduced by
50% and the subscribers released from the obligation to pay any unpaid balance of their
subscription in excess of 50% of the same
o Thus, the effect was the subscription of the stockholders were cancelled to the same
extent, while fully paid certificates were issued for one-half of his subscription
 However, it was not shown that the resolution complied with the formalities prescribed for
reduction of capital stock
o No certificate was filed with Bureau of Commerce and Industry showing such
 CFI: in favor of Philippine Trust
o The resolution relied upon by Marciano was without effect, and thus, he is still liable
for the unpaid balance

ISSUE: w/n Marciano is liable


 The subscription to the capital of a corporation constitute a find to which creditors have a right
to look for satisfaction of their claims and that the assignee in insolvency can maintain an
action upon any unpaid stock subscription in order to realize assets for the payment of its debts.
 A corporation has no power to release an original subscriber to its capital stock from the
obligation of paying for his shares, without a valuable consideration for such release; and as
against creditors a reduction of the capital stock can take place only in the manner an under
the conditions prescribed by the statute or the charter or the articles of incorporation.
o Moreover, strict compliance with the statutory regulations is necessary
 In the case, the resolution releasing the shareholders from their obligation to pay 50% of their
respective subscriptions was an attempted withdrawal of so much capital from the fund upon
which the company's creditors were entitled ultimately to rely and, having been effected without
compliance with the statutory requirements, was wholly ineffectual.