G.R. No. 33426 - People vs. Hitosis

The case was instituted by the Philippine Trust Company as assignee in insolvency of La Cooperativa Naval Filipina against Marciano Rivera to recover a balance of P22,500 unpaid on Rivera's subscription to the corporation’s capital stock.
The action was filed on November 21, 1921, before the Court of First Instance of Manila. The trial court ruled in favor of the plaintiff, and the defendant appealed.

La Cooperativa Naval Filipina was incorporated in 1918 under Philippine laws with a capital stock of P100,000 divided into 1,000 shares at P100 par value each.
Marciano Rivera was one of the incorporators and subscribed to 450 shares, amounting to P45,000 in capital stock. Other persons subscribed the remaining shares.
The articles of incorporation were registered with the Bureau of Commerce and Industry on October 30, 1918.

The corporation eventually became insolvent and the Philippine Trust Company was appointed as its assignee in insolvency.
The plaintiff sought recovery of one-half of Rivera’s stock subscription, which was unpaid.
Rivera contended that a stockholders' meeting passed a resolution reducing the capital stock by 50%, releasing shareholders from paying the remaining balance beyond 50% of their subscription, and that fully paid certificates were issued accordingly.
There was no evidence that formal statutory requirements—including filing a certificate of reduction with the Bureau of Commerce and Industry as required under Section 17 of the Corporation Law (Act No. 1459)—were complied with to effectuate the reduction.

Whether the resolution passed by the stockholders to reduce the capital stock by 50% and release the shareholders from paying the unpaid balance of their subscription is valid and binding against creditors.
Whether the defendant remains liable to pay the unpaid portion of his stock subscription despite the claimed capital reduction.