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    Facts: o o Issue:: On Piercing The Veil

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    Jomarco Santos
    BMPI commissioned PRINTWELL to print magazines over 9 months, accumulating a debt of 316,000 pesos, of which only 25,000 was paid, leaving 291,000 unpaid. PRINTWELL sued BMPI and its stockholders, including Donnina Halley, to recover the unpaid debt. While Halley subscribed to 35,000 shares worth 350,000 pesos, she only paid 87,500 pesos. The courts ruled that Halley and other stockholders cannot claim corporate fiction to avoid liability, as BMPI was thinly capitalized when the debt was incurred and the stockholders personally benefited from operations without fully paying subscriptions. The stockholders were liable for unpaid subscriptions up to the debt amount to prevent injustice to creditors.

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    Facts: o o Issue:: On Piercing The Veil

    Uploaded by

    Jomarco Santos
    13 views1 page
    BMPI commissioned PRINTWELL to print magazines over 9 months, accumulating a debt of 316,000 pesos, of which only 25,000 was paid, leaving 291,000 unpaid. PRINTWELL sued BMPI and its stockholders, including Donnina Halley, to recover the unpaid debt. While Halley subscribed to 35,000 shares worth 350,000 pesos, she only paid 87,500 pesos. The courts ruled that Halley and other stockholders cannot claim corporate fiction to avoid liability, as BMPI was thinly capitalized when the debt was incurred and the stockholders personally benefited from operations without fully paying subscriptions. The stockholders were liable for unpaid subscriptions up to the debt amount to prevent injustice to creditors.

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    BMPI commissioned PRINTWELL to print magazines over 9 months, accumulating a debt of 316,000 pesos, of which only 25,000 was paid, leaving 291,000 unpaid. PRINTWELL sued BMPI and its stockholders, including Donnina Halley, to recover the unpaid debt. While Halley subscribed to 35,000 shares worth 350,000 pesos, she only paid 87,500 pesos. The courts ruled that Halley and other stockholders cannot claim corporate fiction to avoid liability, as BMPI was thinly capitalized when the debt was incurred and the stockholders personally benefited from operations without fully paying subscriptions. The stockholders were liable for unpaid subscriptions up to the debt amount to prevent injustice to creditors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    13 views1 page

    Facts: o o Issue:: On Piercing The Veil

    Uploaded by

    Jomarco Santos
    BMPI commissioned PRINTWELL to print magazines over 9 months, accumulating a debt of 316,000 pesos, of which only 25,000 was paid, leaving 291,000 unpaid. PRINTWELL sued BMPI and its stockholders, including Donnina Halley, to recover the unpaid debt. While Halley subscribed to 35,000 shares worth 350,000 pesos, she only paid 87,500 pesos. The courts ruled that Halley and other stockholders cannot claim corporate fiction to avoid liability, as BMPI was thinly capitalized when the debt was incurred and the stockholders personally benefited from operations without fully paying subscriptions. The stockholders were liable for unpaid subscriptions up to the debt amount to prevent injustice to creditors.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    o

    Facts:
    o BMPI (Business Media Philippines Inc.) is a corporation under the
    control of its stockholders, including Donnina Halley.
    o In the course of its business, BMPI commissioned PRINTWELL to
    print Philippines, Inc. (a magazine published and distributed by
    BMPI)
    o PRINTWELL extended 30-day credit accommodation in favor of
    BMPI and in a period of 9 mos. BMPI placed several orders
    amounting to 316,000.
    o However, only 25,000 was paid hence a balance of 291,000
    o PRINTWELL sued BMPI for collection of the unpaid balance and
    later on impleaded BMPIs original stockholders and incorporatorsto
    recover on their unpaid subscriptions.
    o It appears that BMPI has an authorized capital stock of 3M divided
    into 300,000 shares with P10 par value.
    o Only 75,000 shares worth P750,000 were originally subscribed of
    which P187,500 were paid up capital.
    o Halley subscribed to 35,000 shares worth P350,000 but only paid
    P87,500.
    Halley
    1.
    2.
    3.

    contends that:
    They all had already paid their subscriptions in full
    BMPI had a separate and distinct personality
    BOD and SH had resolved to dissolve BMPI

    RTC and CA
    o Defendant merely used the corporate fiction as a cloak/cover to
    create an injustice (against PRINTWELL)

    Rejected allegations of full payment in view of irregularity in the


    issuance of ORs (Payment made on a later date was covered by an
    OR with a lower serial number than payment made on an earlier
    date.

    Issue:WON a stockholder who was in active management of the


    business of the corporation and still has unpaid subscriptions
    should be made liable for the debts of the corporation by piercing
    the veil of corporate fiction
    Held: YES! Such stockholder should be made liable up to the
    extent of her unpaid subscription
    Ratio:
    It was found that at the time the obligation was incurred, BMPI was
    under the control of its stockholders who know fully well that the
    corporation was not in a position to pay its account (thinly
    capitalized).
    And, that the stockholders personally benefited from the
    operations of the corporation even though they never paid their
    subscriptions in full.
    The stockholders cannot now claim the doctrine of corporate fiction
    otherwise (to deny creditors to collect from SH) it would create an injustice
    because creditors would be at a loss (limbo) against whom it would assert
    the right to collect.
    On piercing the veil:

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