Atty. Nestor L. Mesina

August 31, 1995 Atty. Nestor L. Mesina Unit E-1101, PSE Center, Exchange Road, Ortigas Center, Pasig City S i r : This refers to your letter dated August 21, 1995, addressed to the Director of the Brokers and Exchanges Department requesting opinion on the legality of the call on unpaid subscription by the Board of Directors, of Cophil Exploration Corporation. prcd As stated, the Subscription Agreement provides that the unpaid balance on the subscription is subject to call by the Board of Directors not earlier than July 1995, quoted hereunder: "The balance upon call of the Board of Directors, provided that the call is made not earlier than July 1995 ." (Emphasis supplied) The Board made a call by virtue of a resolution passed on June 5, 1995 , which is prior to July 1995. However, it was explained that while the resolution was issued prior to July 1, 1995, it has to take effect only after July 1, 1995 . The call letter states thus: "Please be advised that a resolution passed on 5 June 1995, our Board of Directors approved a call for additional partial payments on all subscriptions which have not been fully paid by July 1, 1995, as follows: twenty-five percent (25%) of the total amount of subscription due and payable not later than July 3, 1995 and another twenty-five percent (25%) due not later than July 10, 1995 ." On the basis of these facts, you are inquiring whether or not the corporation violated the terms of the subscription Agreement. The word " call " in an English case, is capable of three meanings. It may either mean the resolution, or its notification, or the time when it becomes payable . (11 Fletcher 1790). Thus, it was held that a "resolution to make a call prospectively is good; that is, a resolution providing that a call made on a specified day in the future. Under such circumstance, the date so specified is the date of the call , although the resolution also provides for payment in installments at a still later date." (11 Fletcher 1807 citing Campbell v. American Alkali Co., 125, affg F 398). What matters therefore is the date of payment and not the date of the Resolution approving the same. In the light of the foregoing, the questioned call appears to be in order inasmuch as the required actual payment is not earlier than the date specified in the subscription agreement, provided, that proper and sufficient notice was given to the stockholders. However, please be advised that the foregoing cited authorities and opinion do not restrain or preclude judicial interpretation and application of the law on the actual facts should the issue raised therein be litigated in the proper forum. Very truly yours, (SGD.) PERFECTO R. YASAY, JR. Acting Chairman