Mrs. Delia S. Simon

September 1, 1982 Mrs. Delia S. Simon 7032 A. Wilson St. Makati, Metro Manila Madam: This refers to your letter dated April 5, 1982 requesting for assistance in the recovery of your investments with the Radio Philippines Network Inc. and Philippine Daily Express Publication Corporation, which was referred to this Office by the Officer-in-charge, Special assistance Unit of the Ministry of National Defense for action. LexLib In connection therewith, please be advised that the Corporation Code of the Philippines does not confer upon any stockholder the right to demand refund of his investment conformably to the general rule that the subscription be 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 relieved therefrom. (Fletcher Cyclopedia Corporations, Vol. 4, 747 citing Leman v. Teter, 69 III App. 503). Moreover, 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, GR No. L-4824, 1953, 49 OG 809). Considering the foregoing, it is our view that your investments made to the above-mentioned corporations in exchange for shares of stocks and which form part of the substantial assets of said corporations can only be withdrawn upon approval of the Board of Directors and Stockholders respectively, provided that no creditors are prejudiced by said withdrawal and provided further that all laws, rules and regulations pertinent to said withdrawal are duly observed and complied with. This Commission, therefore, cannot legally compel Radio Philippines Network, Inc. and Philippine Daily Express Publication Corporation to return your investments. Please be advised accordingly. LibLex Very truly yours, (SGD.) JULIO A. SULIT, JR. Associate Commissioner