Fermin Caram, Jr. vs Court of Appeals

G.R. No. L-48627 – 235 Phil. 369 – Mercantile Law – Corporation Law – Separate and Distinct Personality

A certain Barretto initiated the incorporation of a company called Filipinas Orient Airways (FOA). Barretto was referred to as the “moving spirit” of said corporation because it was through his effort that it was created. Before FOA’s creation though, Barretto contracted with a third party, Alberto Arellano, for the latter to prepare a project study for the feasibility of creating a corporation like FOA. The project study was then presented to the would-be incorporators and investors. On the basis of said project study, Fermin Caram, Jr. and Rosa Caram agreed to be incorporators of FOA. Later however, Arellano filed a collection suit against FOA, Barretto, and the Carams. Arellano claims that he was not paid for his work on the project study.

ISSUE: Whether or not the Carams are personally and solidarily liable considering that the project study was contracted before FOA became a corporation.

HELD: No. The Carams cannot be solidarily liable with FOA. The FOA is now a bona fide corporation. As such, FOA alone should be liable for its corporate acts as duly authorized by its officers and directors. This includes acts which ultimately led to its incorporation i.e., the project study made by Arellano. FOA has a separate and distinct personality from its incorporators. It is not justified to make the Carams, as principal stockholders, to be responsible for FOA’s obligations.

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