GR 35961; (December, 1932) (Digest)
G.R. No. 35961 , December 2, 1932
Romana Miranda, in her capacity as judicial administratrix of the intestate estate of her deceased father, Alberto Miranda, plaintiff-appellant, vs. The Tarlac Rice Mill Co., Inc., defendant-appellee.
FACTS
Alberto Miranda subscribed to 100 shares (P10,000) of the defendant corporation and executed a power of attorney authorizing its officers to mortgage his property to secure a loan of up to P10,000 to increase the corporation’s capital. Pursuant to this authority, the corporation’s officers obtained a P10,000 loan from Mariano Tablante, secured by a mortgage on Miranda’s property. The corporation defaulted on the loan. Miranda paid the debt to protect his property. He then, through his administratrix, sued the corporation for reimbursement. The corporation defended by claiming Miranda’s payment was actually his payment for his stock subscription. The trial court dismissed the complaint.
ISSUE
Whether the defendant corporation is liable to reimburse the plaintiff for the amount paid to settle the loan secured by the mortgage on Alberto Miranda’s property.
RULING
No. The Supreme Court affirmed the dismissal. The payment made by Alberto Miranda to settle the mortgage debt was properly applied to his unpaid subscription to the capital stock of the corporation. The power of attorney authorized the loan to increase the capital of the corporation, which was for the benefit of all subscribers, including Miranda. Since Miranda was still liable for his subscription installments, the corporation had the right to apply the funds it obtained (through the mortgage on his property) to his subscription debt. The loan transaction was, in effect, a method for Miranda to pay his subscription using his own credit. Therefore, the corporation did not incur a separate debt to Miranda, and he was not entitled to reimbursement. The dissenting opinion argued that the corporation’s failure to make a lawful “call” on all stock subscriptions rendered the collection from Miranda invalid, but the majority did not adopt this view.
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