G.R. No. 204218 - Nagano vs. Tanjangco

On February 3, 1999, the Subic Bay Metropolitan Authority (SBMA) leased Building 8324 at Subic Bay International Airport to Centennial Air, Inc. (CAIR) for five years (Feb. 1, 1999–Jan. 31, 2004). The rent was set at US$2.50 per sqm/month (US$4,757.50 monthly), payable in either U.S. dollars or its peso equivalent at prevailing rates. A 24% additional rent penalty applied to any overdue amount, and SBMA could seek judicial relief for unpaid rentals, damages, court costs, and attorney’s fees.
CAIR repeatedly defaulted on its obligations. SBMA’s Accounting Department sent demand letters: November 9, 1999 (P119,324.51 outstanding) and January 14, 2004 (final demand, five‐day payment). CAIR’s December 2002 payment scheme proposal—initial US$33,682 plus 18 post-dated checks covering US$134,723.84—failed when only the initial payment was made. SBMA terminated the lease and filed suit for US$163,341.89 plus legal interest, P100,000 exemplary damages, and P20,000 attorney’s fees.

Petitioners (Enano-Bote et al.) were incorporators/stockholders of CAIR. On December 1, 1998, they executed a Deed of Assignment of Subscription Rights (DASR), transferring their aggregate 400,000 shares to Jose Ch. Alvarez. Alvarez assumed P30,000,000 in unpaid subscriptions and agreed to assign 76,000 fully paid shares to Jennifer and 4,000 to Virgilio, leaving the other petitioners divested.
In their September 3, 2004 Answer, petitioners denied liability, claiming they ceased being stockholders before the lease and thus could not be held liable for CAIR’s defaults. Co-defendant Roberto Lozada filed an Answer with Counterclaim alleging prescription, payment, waiver, novation, and seeking P50,000 attorney’s fees and P200,000 exemplary damages. CAIR was initially declared in default (Feb. 4, 2005) but later allowed to adopt Lozada’s Answer. Petitioners then filed a Third-Party Complaint against Alvarez, who denied the RFA and failed to present evidence at trial.

After trial, the Regional Trial Court (RTC) on April 8, 2014 ruled that CAIR and the individual petitioners were jointly and severally liable to SBMA for US$163,341.89 plus interest; Alvarez was ordered to reimburse the petitioners that amount and to pay Jennifer moral damages of P300,000 and attorney’s fees of P200,000; Lozada was dismissed.
The Court of Appeals (CA) affirmed the RTC Decision on September 21, 2015 and denied petitioners’ motion for reconsideration on March 3, 2016.
Petitioners filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court.

Whether the Court of Appeals erred in applying the trust fund doctrine to hold petitioners personally and solidarily liable with CAIR for unpaid rentals based on their unpaid capital subscriptions.
Whether, under the Third-Party Complaint, Alvarez should be independently liable to pay Jennifer and Virgilio moral damages of P300,000 and attorney’s fees of P200,000, apart from costs of suit.