Enano-Bote, et.al.

vs Alvarez

Facts: SBMA entered into a Lease Agreement with Centennial Air Inc. (CAIR). For the duration of the
lease CAIR became delinquent and was constantly remiss in the payment. The parties agreed to a
payment plan. However, only the initial payment was made and the rest of the balance was left unpaid.
SMBA terminated the Lease Agreement and filled a compliant asking for payment.

Petitioners are stockholders of CAIR filed their answer denying any liability and argued that they were
no longer stockholders of the corporation at the tome the lease agreement was executed. They
allegedly entered into a Deed of Assignment of Subscription Rights (DASR) with the respondent, Alvarez.
Whereby they assigned, transferred and conveyed their aggregate subscription shares, representing
100% of the capital stock of CAIR to Alvarez. Pursuant to the DASR, Alvarez was obliged to transfer and
assign fully paid and non-assessable shared to petitioners. Furthermore, Alvarez assumed to pay the
unpaid balance of their subscriptions.

The RTC ordered Petitioners and CAIR jointly and severally to pay plaintiff SBMA. Petitioners then
appealed to the CA. The CA affirmed the RTC ruling.

Issue: Whether or not petitioners are personally and solidarity liable with CAIR

Ruling. No. Consistently, the RTC is convinced that petitioners may be held liable up to the extent of
their unpaid subscription for the payment of CAIR's outstanding obligation to SBMA. It is established
doctrine that subscriptions to the capital of a corporation constitute a fund 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.

We clarify that the trust fund doctrine is not limited to reaching the stockholder's unpaid subscriptions.
The scope of the doctrine when the corporation is insolvent encompasses not only the capital stock, but
also other property and assets generally regarded in equity as a trust fund for the payment of corporate
debts. All assets and property belonging to the corporation held in trust for the benefit of creditors that
were distributed or in the possession of the stockholders, regardless of full payment of their
subscriptions, may be reached by the creditor in satisfaction of its claim

SBMA has not even pleaded either insolvency of CAIR or its dissolution. What is evident in SBMA's
complaint is that it is a simple collection suit. Not only were the allegations of SBMA's complaint
insufficient to justify the invocation and application of the trust fund doctrine as appreciated in Halley,
even the evidence adduced by SBMA was solely to prove the uncollected rentals.

In short, SBMA failed to either allege or prove any of the two grounds recognized in Halley when the
trust fund doctrine may be applied to compel the stockholders to contribute to the payment of CAIR's
debts by compelling them to pay the unpaid balances upon their subscriptions.