Engr. Benigno Q. Alfaro

September 16, 1985 Engr. Benigno Q. Alfaro 383 San Francisco, Mabalacat Pampanga Sir : This has reference to your letter dated August 21, 1985, requesting for assistance on the refund of your investments amounting to P10,000.00 in the Florida Resources and Placement Corporation. cdlex In reply thereto, please be informed that the Corporation Code of the Philippines does not confer upon any stockholder the right to demand refund of his investments conformably to the general rule that the subscription to the capital stock of a corporation constitutes a trust fund for the benefit of the creditors and no valid agreement can be made by which a subscriber can be released therefrom. (Fletcher Encyclopedia Corp. Vol. 4, 1947 citing Leman v. Teter, 1169 III App. 503). Moreover, a contract of subscription is at least in the sense which creates an estoppel, a contract among the several subscribers. For this reason, no one of the subscribers can withdraw from the contract without the consent of all the others and thereby diminish without the universal consent, the common fund in which all have acquired an interest." (Agbayani, Commentaries and Jurisprudence on the Commercial laws of the Philippines, 1980 Edition, p. 449, citing Lingayen Gulf Electric Power Co. v. Baltazar, G.R. No. L-4824, June 30, 1953, 49 OG 809) In view of the above, it is our view that your investments made to the said corporation in exchange for shares of stock and which form part of the substantial assets of said corporation can only be withdrawn upon approval of the Board of Directors and stockholders, respectively, provided further that all laws, rules and regulations pertinent to said withdrawal are duly observed and complied with. This Commission, therefore, cannot legally compel Florida Resources and Placement Corporation to return your investment. Insofar as your claims for compensation and other complaints, we regret to inform you that this Commission could not render an appropriate opinion based on the above-stated facts since the same is a matter of evidence and therefore a justiciable issue which could only be clarified and determined in a proper proceeding. Thus, instead of rendering an opinion on said questions and in order to afford the parties due process of law, we suggest that you file the necessary verified complaint with the Securities Investigation and Clearing Department of this Commission. cdll Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman