Facts:

The case involves petitioners Fermin Z. Caram, Jr. and Rosa O. de Caram against the Honorable Court of Appeals and Alberto V. Arellano. The decision was rendered on June 30, 1987, concerning a dispute over solidary liability for expenses incurred in the organization of a corporation, specifically the Filipinas Orient Airways. The lower court had ordered the defendants, including the Carams, to jointly and severally pay Arellano the amount of P50,000 for the preparation of a project study and technical services that led to the formation of the airline. The Carams contended that they had no contractual relationship with Arellano regarding these services, asserting that they were merely subsequent investors in the corporation and should not be held liable alongside the original promoters, Barretto and Garcia, who had directly engaged Arellano's services. The lower court's ruling was based on the premise that the Carams, as major stockholders and officers of the corporati...

Facts:

Background and Context

• The case involves petitioners Fermin Z. Caram, Jr. and Rosa O. De Caram, who are stockholders and financiers in a corporation—the Filipinas Orient Airways—organized based on a project study.
• The project study and several pre-organizational technical services were provided by a private respondent, whose compensation was set at P50,000.00 for the preparation of the study and associated services, plus additional attorney’s fees.

Lower Court Decision and Order

• The respondent court ordered that all defendants, including the petitioners, as well as other co-defendants (notably Barretto, Garcia, and the corporation), be held jointly and severally liable to pay the plaintiff the aforementioned amounts.
• The justification for this order was that the project study was initiated at the request of certain co-defendants (Barretto and Garcia) and subsequently presented to the petitioners as an inducement to invest in the airline project.

Petitioners’ Argument and Position

• The petitioners contended that they had no direct contractual relationship with the private respondent for the technical and preparatory services rendered.
• They argued that, being mere subsequent investors, they could not be held solidarily liable with other parties—especially Barretto and Garcia—who were the original requesters of the said services.
• The submission emphasized that their involvement was limited to eventually participating as major stockholders, and there was no evidence that the services were contracted directly with them.

Role of Other Parties and Pre-organization Dynamics

• The lower court’s decision acknowledged that Barretto, characterized as the “moving spirit,” played a critical role in the pre-organization of the corporation by actively coordinating the preparatory work.
• It was noted that the project study, while benefiting all investors, primarily resulted from the initial actions of Barretto and Garcia, who effectively utilized it to solicit further investments, including those of the petitioners.
• The decision mentioned that the corporation, once organized as a bona fide entity with separate juridical personality, should bear its corporate obligations without extending personal liability to those investors.

Legal and Factual Ambiguities

• The petition raised issues regarding the imposition of solidary liability, questioning whether the petitioners should be held personally responsible for the preparatory services despite not directly engaging the plaintiff.
• The petition was observed to have an ambiguous stance, rejecting solidary liability while appearing to leave room for some form of joint liability, a nuance that affected the adjudication of the case.
• The respondent court’s rationale, which benefited other defendants involved in the preparatory work, did not directly implicate the petitioners in contracting the plaintiff’s services.

Issue:

Whether the petitioners, as subsequent investors and major stockholders, can be held jointly and severally liable for the technical and pre-organizational services provided by the private respondent.

• Does the absence of a direct contract between the petitioners and the plaintiff preclude personal liability?
• Can benefiting from the project study alone establish a basis for imposing solidary responsibility?

The proper extent of liability of the petitioners in the context of a corporation that was organized based on the project study.

• Is it justifiable to extend liability to investors who were not involved in the initial organization steps but merely benefitted from the services rendered?
• Should the corporate entity, as a separate juridical person, bear the obligations arising from the project study and subsequent services?

Whether the distinction between joint and solidary liability is appropriately applied in a case where petitioners had no contractual relationship with the service provider.

• Does their non-involvement in contracting the services automatically exempt them from any form of liability?
• What are the implications of the lower court’s order for other stockholders and for the corporate entity itself?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)