Mr. Eduardo A. Buliyat

February 1, 1984 Mr. Eduardo A. Buliyat Philippine Military Academy Fort Del Pilar, Baguio City Sir : This has reference to your letter dated October 17, 1983 wherein you posed queries relative to Masinloc Chromite Mining Company, Inc. Please be informed that subject corporation is a pre-war corporation whose corporate records were duly reconstructed with this Office on June 12, 1956 pursuant to R.A. No. 62, as amended. The corporation has not filed its financial statements, minutes of meeting and general information sheet since 1958. For further particulars, please communicate with its President, Mr. Nicolas Estrella, 1199 Quirino Avenue, Paraaque, Metro Manila. llcd As to whether or not Col. Guillermo B. Reyes in his capacity as heir can recover the face value of shares issued in 1947, please be advised that the prevailing rule on the matter is that stockholders have no right to demand refund of his investment conformably to the general rule that subscription to the capital stock of corporation constitutes a trust fund for the benefit of the creditors and no agreement can be made by which a subscriber can be released therefrom. (Fletcher Cyclopedia Corporations, Vol. IV, 1747 citing Leman v. Teter, 169 III App. 503). Likewise, "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, GR No. L-4824, June 30, 1953, 49 OG 809). Considering the foregoing, it is our view that stockholders of a corporation or their heirs cannot demand for refund of investments in a corporation without the consent of the stockholders/Directors. Neither do they have the right to withdraw even when the corporation assents thereto, if there is any prejudice to creditors. Regarding your query as to the basis for computing the amount of the claim, the same need not be answered in view of the foregoing opinion. Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman