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353 Phil. 702
FIRST DIVISION
[ G.R. No. 123793, June 29, 1998 ]
ASSOCIATED BANK, PETITIONER, VS. COURT OF APPEALS AND LORENZO SARMIENTO JR., RESPONDENTS.
D E C I S I O N
PANGANIBAN, J.:
In a merger, does the surviving corporation have a right to enforce
a contract entered into by the absorbed company subsequent to the date
of the merger agreement, but prior to the issuance of a certificate of
merger by the Securities and Exchange Commission?
The Case
This is a petition for review under Rule 45 of the Rules of Court seeking to set aside the Decision
of the Court of Appeals
in CA-GR CV No. 26465 promulgated on January 30, 1996, which answered
the above question in the negative. The challenged Decision reversed and
set aside the October 17, 1986 Decision
in Civil Case No. 85-32243, promulgated by the Regional Trial Court of
Manila, Branch 48, which disposed of the controversy in favor of herein
petitioner as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff
Associated Bank. The defendant Lorenzo Sarmiento, Jr. is ordered to pay
plaintiff:
The amount of P4,689,413.63 with interest thereon at 14% per annum until fully paid;
The amount of P200,000.00 as and for attorneys fees; and
The costs of suit.
On the other hand, the Court of Appeals resolved the case in this wise:
WHEREFORE, premises considered, the decision appealed from,
dated October 17, 1986 is REVERSED and SET ASIDE and another judgment
rendered DISMISSING plaintiff-appellees complaint, docketed as Civil
Case No. 85-32243. There is no pronouncement as to costs.
The Facts
The undisputed factual antecedents, as narrated by the trial court and adopted by public respondent, are as follows:
x x x [O]n or about September 16, 1975 Associated Banking
Corporation and Citizens Bank and Trust Company merged to form just one
banking corporation known as Associated Citizens Bank, the surviving
bank. On or about March 10, 1981, the Associated Citizens Bank changed
its corporate name to Associated Bank by virtue of the Amended Articles
of Incorporation. On September 7, 1977, the defendant executed in favor
of Associated Bank a promissory note whereby the former undertook to pay
the latter the sum of P2,500,000.00 payable on or before March 6, 1978.
As per said promissory note, the defendant agreed to pay interest at
14% per annum, 3% per annum in the form of liquidated damages,
compounded interests, and attorneys fees, in case of litigation
equivalent to 10% of the amount due. The defendant, to date, still owes
plaintiff bank the amount of P2,250,000.00 exclusive of interest and
other charges. Despite repeated demands the defendant failed to pay the
amount due.
x x x [T]he defendant denied all the pertinent allegations in the
complaint and alleged as affirmative and[/]or special defenses that the
complaint states no valid cause of action; that the plaintiff is not
the proper party in interest because the promissory note was executed in
favor of Citizens Bank and Trust Company; that the promissory note does
not accurately reflect the true intention and agreement of the parties;
that terms and conditions of the promissory note are onerous and must
be construed against the creditor-payee bank; that several partial
payments made in the promissory note are not properly applied; that the
present action is premature; that as compulsory counterclaim the
defendant prays for attorneys fees, moral damages and expenses of
litigation.
On May 22, 1986, the defendant was declared as if in default for
failure to appear at the Pre-Trial Conference despite due notice.
A Motion to Lift Order of Default and/or Reconsideration of Order
dated May 22, 1986 was filed by defendants counsel which was denied by
the Court in [an] order dated September 16, 1986 and the plaintiff was
allowed to present its evidence before the Court ex-parte on October 16,
1986.
At the hearing before the Court ex-parte, Esteban C. Ocampo
testified that x x x he is an accountant of the Loans and Discount
Department of the plaintiff bank; that as such, he supervises the
accounting section of the bank, he counterchecks all the transactions
that transpired during the day and is responsible for all the accounts
and records and other things that may[ ]be assigned to the Loans and
Discount Department; that he knows the [D]efendant Lorenzo Sarmiento,
Jr. because he has an outstanding loan with them as per their records;
that Lorenzo Sarmiento, Jr. executed a promissory note No. TL-2649-77
dated September 7, 1977 in the amount of P2,500,000.00 (Exhibit A); that
Associated Banking Corporation and the Citizens Bank and Trust Company
merged to form one banking corporation known as the Associated Citizens
Bank and is now known as Associated Bank by virtue of its Amended
Articles of Incorporation; that there were partial payments made but not
full; that the defendant has not paid his obligation as evidenced by
the latest statement of account (Exh. B); that as per statement of
account the outstanding obligation of the defendant is P5,689,413.63
less P1,000,000.00 or P4,689,413.63 (Exh. B, B-1); that a demand letter
dated June 6, 1985 was sent by the bank thru its counsel (Exh. C) which
was received by the defendant on November 12, 1985 (Exh. C, C-1, C-2,
C-3); that the defendant paid only P1,000,000.00 which is reflected in
the Exhibit C.
Based on the evidence presented by petitioner, the trial court
ordered Respondent Sarmiento to pay the bank his remaining balance plus
interests and attorneys fees. In his appeal, Sarmiento assigned to the
trial court several errors, namely:
I The [trial court] erred in denying appellants motion
to dismiss appellee banks complaint on the ground of lack of cause of
action and for being barred by prescription and laches.
II The same lower court erred in admitting
plaintiff-appellee banks amended complaint while defendant-appellants
motion to dismiss appellee banks original complaint and using/availing
[itself of] the new additional allegations as bases in denial of said
appellants motion and in the interpretation and application of the
agreement of merger and Section 80 of BP Blg. 68, Corporation Code of
the Philippines.
III The [trial court] erred and gravely abuse[d] its
discretion in rendering the two as if in default orders dated May 22,
1986 and September 16, 1986 and in not reconsidering the same upon
technical grounds which in effect subvert the best primordial interest
of substantial justice and equity.
IV The court a quo erred in issuing the orders dated May
22, 1986 and September 16, 1986 declaring appellant as if in default due
to non-appearance of appellants attending counsel who had resigned
from the law firm and while the parties [were] negotiating for
settlement of the case and after a one million peso payment had in fact
been paid to appellee bank for appellants account at the start of such
negotiation on February 18, 1986 as act of earnest desire to settle the
obligation in good faith by the interested parties.
V The lower court erred in according credence to appellee
banks Exhibit B statement of account which had been merely requested
by its counsel during the trial and bearing date of September 30, 1986.
VI The lower court erred in accepting and giving credence
to appellee banks 27-year-old witness Esteban C. Ocampo as of the date
he testified on October 16, 1986, and therefore, he was merely an
eighteen-year-old minor when appellant supposedly incurred the foisted
obligation under the subject PN No. TL-2649-77 dated September 7, 1977,
Exhibit A of appellee bank.
VII The [trial court] erred in adopting appellee banks
Exhibit B dated September 30, 1986 in its decision given in open court
on October 17, 1986 which exacted eighteen percent (18%) per annum on
the foisted principal amount of P2.5 million when the subject PN,
Exhibit A, stipulated only fourteen percent (14%) per annum and which
was actually prayed for in appellee banks original and amended
complaints.
VIII The appealed decision of the lower court erred in not
considering at all appellants affirmative defenses that (1) the subject
PN No. TL-2649-77 for P2.5 million dated September 7, 1977, is merely
an accommodation pour autrui bereft of any actual consideration to
appellant himself and (2) the subject PN is a contract of adhesion,
hence, [it] needs [to] be strictly construed against appellee bank --
assuming for granted that it has the right to enforce and seek
collection thereof.
IX The lower court should have at least allowed appellant
the opportunity to present countervailing evidence considering the huge
amounts claimed by appellee bank (principal sum of P2.5 million which
including accrued interests, penalties and cost of litigation totaled
P4,689,413.63) and appellants affirmative defenses -- pursuant to
substantial justice and equity.
The appellate court, however, found no need to tackle all the
assigned errors and limited itself to the question of whether [herein
petitioner had] established or proven a cause of action against [herein
private respondent]. Accordingly, Respondent Court held that the
Associated Bank had no cause of action against Lorenzo Sarmiento Jr.,
since said bank was not privy to the promissory note executed by
Sarmiento in favor of Citizens Bank and Trust Company (CBTC). The court
ruled that the earlier merger between the two banks could not have
vested Associated Bank with any interest arising from the promissory
note executed in favor of CBTC
after
such merger.
Thus, as earlier stated, Respondent Court set aside the decision of
the trial court and dismissed the complaint. Petitioner now comes to us
for a reversal of this ruling.
Issues
In its petition, petitioner cites the following reasons:
I The Court of Appeals erred in reversing the decision of the
trial court and in declaring that petitioner has no cause of action
against respondent over the promissory note.
II The Court of Appeals also erred in declaring that, since the
promissory note was executed in favor of Citizens Bank and Trust Company
two years after the merger between Associated Banking Corporation and
Citizens Bank and Trust Company, respondent is not liable to petitioner
because there is no privity of contract between respondent and
Associated Bank.
III The Court of Appeals erred when it ruled that petitioner,
despite the merger between petitioner and Citizens Bank and Trust
Company, is not a real party in interest insofar as the promissory note
executed in favor of the merger.
In a nutshell, the main issue is whether Associated Bank, the
surviving corporation, may enforce the promissory note made by private
respondent in favor of CBTC, the absorbed company, after the merger
agreement had been signed.
The Courts Ruling
The petition is impressed with merit.
The Main Issue:
Associated Bank Assumed
All Rights of CBTC
Ordinarily, in the merger of two or more existing corporations,
one of the combining corporations survives and continues the combined
business, while the rest are dissolved and all their rights, properties
and liabilities are acquired by the surviving corporation.
[10]
Although there is a dissolution of the absorbed corporations, there is
no winding up of their affairs or liquidation of their assets, because
the surviving corporation automatically acquires all their rights,
privileges and powers, as well as their liabilities.
[11]
The merger, however, does not become effective upon the mere
agreement of the constituent corporations. The procedure to be followed
is prescribed under the Corporation Code.
[12]
Section 79 of said Code requires the approval by the Securities and
Exchange Commission (SEC) of the articles of merger which, in turn, must
have been duly approved by a majority of the respective stockholders of
the constituent corporations. The same provision further states that
the merger shall be effective only upon the issuance by the SEC of a
certificate of merger. The effectivity date of the merger is crucial for
determining when the merged or absorbed corporation ceases to exist;
and when its rights, privileges, properties as well as liabilities pass
on to the surviving corporation.
Consistent with the aforementioned Section 79, the September 16, 1975 Agreement of Merger,
[13]
which Associated Banking Corporation (ABC) and Citizens Bank and Trust
Company (CBTC) entered into, provided that its effectivity shall, for
all intents and purposes, be the date when the necessary papers to carry
out this [m]erger shall have been approved by the Securities and
Exchange Commission.
[14]
As to the transfer of the properties of CBTC to ABC, the agreement provides:
10. Upon effective date of the Merger, all rights,
privileges, powers, immunities, franchises, assets and property of
[CBTC], whether real, personal or mixed, and including [CBTCs] goodwill
and tradename, and all debts due to [CBTC] on whatever act, and all
other things in action belonging to [CBTC] as of the effective date of
the [m]erger shall be vested in [ABC], the SURVIVING BANK, without need
of further act or deed, unless by express requirements of law or of a
government agency, any separate or specific deed of conveyance to
legally effect the transfer or assignment of any kind of property [or]
asset is required, in which case such document or deed shall be executed
accordingly; and all property, rights, privileges, powers, immunities,
franchises and all appointments, designations and nominations, and all
other rights and interests of [CBTC] as trustee, executor,
administrator, registrar of stocks and bonds, guardian of estates,
assignee, receiver, trustee of estates of persons mentally ill and in
every other fiduciary capacity, and all and every other interest of
[CBTC] shall thereafter be effectually the property of [ABC] as they
were of [CBTC], and title to any real estate, whether by deed or
otherwise, vested in [CBTC] shall not revert or be in any way impaired
by reason thereof; provided, however, that all rights of creditors and
all liens upon any property of [CBTC] shall be preserved and unimpaired
and all debts, liabilities, obligations, duties and undertakings of
[CBTC], whether contractual or otherwise, expressed or implied, actual
or contingent, shall henceforth attach to [ABC] which shall be
responsible therefor and may be enforced against [ABC] to the same
extent as if the same debts, liabilities, obligations, duties and
undertakings have been originally incurred or contracted by [ABC],
subject, however, to all rights, privileges, defenses, set-offs and
counterclaims which [CBTC] has or might have and which shall pertain to
[ABC].
[15]
The records do not show when the SEC approved the merger. Private
respondents theory is that it took effect on the date of the execution
of the agreement itself, which was September 16, 1975. Private
respondent contends that, since he issued the promissory note to CBTC on
September 7, 1977 -- two years after the merger agreement had been
executed -- CBTC could not have conveyed or transferred to petitioner
its interest in the said note, which was not yet in existence at the
time of the merger. Therefore, petitioner, the surviving bank, has no
right to enforce the promissory note on private respondent; such right
properly pertains only to CBTC.
Assuming that the effectivity date of the merger was the date
of its execution, we still cannot agree that petitioner no longer has
any interest in the promissory note. A closer perusal of the merger
agreement leads to a different conclusion. The provision quoted earlier
has this other clause:
Upon the effective date of the [m]erger, all references to
[CBTC] in any deed, documents, or other papers of whatever kind or
nature and wherever found shall be deemed for all intents and purposes,
references to [ABC], the SURVIVING BANK, as if such references were
direct references to [ABC]. x x x
[16]
(Underscoring supplied)
Thus, the fact that the promissory note was executed after the
effectivity date of the merger does not militate against petitioner. The
agreement itself clearly provides that all contracts -- irrespective of
the date of execution -- entered into in the name of CBTC shall be
understood as pertaining to the surviving bank, herein petitioner.
Since, in contrast to the earlier aforequoted provision, the latter
clause no longer specifically refers only to contracts existing at the
time of the merger, no distinction should be made. The clause must have
been deliberately included in the agreement in order to protect the
interests of the combining banks; specifically, to avoid giving the
merger agreement a farcical interpretation aimed at evading fulfillment
of a due obligation.
Thus, although the subject promissory note names CBTC as the
payee, the reference to CBTC in the note shall be construed, under the
very provisions of the merger agreement, as a reference to petitioner
bank, as if such reference [was a] direct reference to the latter for
all intents and purposes.
No other construction can be given to the unequivocal
stipulation. Being clear, plain and free of ambiguity, the provision
must be given its literal meaning
[17]
and applied without a convoluted interpretation.
Verba legis non est recedendum
[18]
In light of the foregoing, the Court holds that petitioner has a
valid cause of action against private respondent. Clearly, the failure
of private respondent to honor his obligation under the promissory note
constitutes a violation of petitioners right to collect the proceeds of
the loan it extended to the former.
Secondary Issues:
Prescription, Laches, Contract
Pour Autrui,
Lack of Consideration
No Prescription
or Laches
Private respondents claim that the action has prescribed,
pursuant to Article 1149 of the Civil Code, is legally untenable.
Petitioners suit for collection of a sum of money was based on a
written contract and prescribes after ten years from the time its right
of action arose.
[19]
Sarmientos obligation under the promissory note became due and
demandable on March 6, 1978. Petitioners complaint was instituted on
August 22, 1985, before the lapse of the ten-year prescriptive period.
Definitely, petitioner still had every right to commence suit against
the payor/obligor, the private respondent herein.
Neither is petitioners action barred by laches. The principle
of laches is a creation of equity, which is applied not to penalize
neglect or failure to assert a right within a reasonable time, but
rather to avoid recognizing a right when to do so would result in a
clearly inequitable situation
[20]
or in an injustice.
[21]
To require private respondent to pay the remaining balance of his loan
is certainly not inequitable or unjust. What would be manifestly unjust
and inequitable is his contention that CBTC is the proper party to
proceed against him despite the fact, which he himself asserts, that
CBTCs corporate personality has been dissolved by virtue of its merger
with petitioner. To hold that no payee/obligee exists and to let private
respondent enjoy the fruits of his loan without liability is surely
most unfair and unconscionable, amounting to unjust enrichment at the
expense of petitioner. Besides, this Court has held that the doctrine of
laches is inapplicable where the claim was filed within the
prescriptive period set forth under the law.
[22]
No Contract
Pour Autrui
Private respondent, while not denying that he executed the
promissory note in the amount of P2,500,000 in favor of CBTC, offers the
alternative defense that said note was a contract
pour autrui
A stipulation
pour autrui
is one in favor of a third
person who may demand its fulfillment, provided he communicated his
acceptance to the obligor before its revocation. An incidental benefit
or interest, which another person gains, is not sufficient. The
contracting parties must have clearly and deliberately conferred a favor
upon a third person.
[23]
Florentino vs. Encarnacion Sr.
[24]
enumerates the requisites for such contract: (1) the stipulation in
favor of a third person must be a part of the contract, and not the
contract itself; (2) the favorable stipulation should not be conditioned
or compensated by any kind of obligation; and (3) neither of the
contracting parties bears the legal representation or authorization of
the third party. The fairest test in determining whether the third
persons interest in a contract is a stipulation
pour autrui
or merely an incidental interest is to examine the intention of the parties as disclosed by their contract.
[25]
We carefully and thoroughly perused the promissory note, but
found no stipulation at all that would even resemble a provision in
consideration of a third person. The instrument itself does not disclose
the purpose of the loan contract. It merely lays down the terms of
payment and the penalties incurred for failure to pay upon maturity. It
is patently devoid of any indication that a benefit or interest was
thereby created in favor of a person other than the contracting parties.
In fact, in no part of the instrument is there any mention of a third
party at all. Except for his barefaced statement, no evidence was
proffered by private respondent to support his argument. Accordingly,
his contention cannot be sustained. At any rate, if indeed the loan
actually benefited a third person who undertook to repay the bank,
private respondent could have availed himself of the legal remedy of a
third-party complaint.
[26]
That he made no effort to implead such third person proves the hollowness of his arguments.
Consideration
Private respondent also claims that he received no
consideration for the promissory note and, in support thereof, cites
petitioners failure to submit any proof of his loan application and of
his actual receipt of the amount loaned. These arguments deserve no
merit.
Res ipsa loquitur
. The instrument, bearing the signature
of private respondent, speaks for itself. Respondent Sarmiento has not
questioned the genuineness and due execution thereof. No further proof
is necessary to show that he undertook to pay P2,500,000, plus interest,
to petitioner bank on or before March 6, 1978. This he failed to do, as
testified to by petitioners accountant. The latter presented before
the trial court private respondents statement of account
[27]
as of September 30, 1986, showing an outstanding balance of
P4,689,413.63 after deducting P1,000,000.00 paid seven months earlier.
Furthermore, such partial payment is equivalent to an express
acknowledgment of his obligation. Private respondent can no longer
backtrack and deny his liability to petitioner bank. A person cannot
accept and reject the same instrument.
[28]
WHEREFORE
, the petition is
GRANTED
. The assailed Decision is
SET ASIDE
and the Decision of RTC-Manila, Branch 48, in Civil Case No. 26465 is hereby
REINSTATED
SO ORDERED
Davide Jr. (Chairman), Bellosillo, Vitug
, and
Quisumbing, JJ.
, concur.
Rollo, pp. 38-48.
Eighth Division,
composed of JJ. Eduardo G. Montenegro, ponente; Jaime M. Lantin,
chairman; and Jose C. de la Rama, concurring.
Penned by Judge Bonifacio A. Cacdac Jr.
RTC Decision, p. 2; records, p. 129.
Assailed Decision, p. 11; rollo, p. 48.
RTC Decision, pp. 1-2; assailed Decision, pp. 2-3; Petition for Review, pp. 1-4.
CA rollo, pp. 35-38. (Upper case in the original.)
This case was deemed submitted for decision upon receipt by this Court of private respondents Memorandum on October 10, 1997.
Petition, p. 5; rollo, p. 24. (Upper case in the original.)
[10]
Jose C. Campos Jr.
and Maria Clara Lopez-Campos, The Corporation Code: Comments, Notes and
Selected Cases, Vol. 2, 1990 ed., p. 441; § 80, Corporation Code.
[11]
Campos and Campos, ibid., p. 447.
[12]
Pertinent provisions of the Corporation Code read:
SEC. 76.
Plan of merger or consolidation
. -- Two or more
corporations may merge into a single corporation which shall be one of
the constituent corporations or may consolidate into a new single
corporation which shall be the consolidated corporation.
The board of directors or trustees of each corporation, party to
the merger of consolidation, shall approve a plan of merger or
consolidation setting forth the following:
The names of the corporations proposing to merge or consolidate, hereinafter referred to as the constituent corporations;
The terms of the merger or consolidation and the mode of carrying the same into effect;
A statement of the changes, if any, in the articles of
incorporation of the surviving corporation in case of merger; and, with
respect to the consolidated corporation in case of consolidation, all
the statements required to be set forth in the articles of incorporation
for corporations organized under this Code; and
Such other provisions with respect to the proposed merger or consolidation as are deemed necessary or desirable.
SEC. 77.
Stockholders or members approval
approval by a majority vote of each of the board of directors or
trustees of the constituent corporations of the plan of merger or
consolidation, the same shall be submitted for approval by the
stockholders or members of each of such corporations at separate
corporate meetings duly called for the purpose. Notice of such meetings
shall be given to all stockholders or members of the respective
corporations, at least two (2) weeks prior to the date of the meeting,
either personally or by registered mail. Said notice shall state the
purpose of the meeting and shall include a copy or a summary of the plan
of merger or consolidation, as the case may be. The affirmative vote of
stockholders representing at least two-thirds (2/3) of the outstanding
capital stock of each corporation in case of stock corporations or at
least two thirds (2/3) of the members in case of non-stock corporations,
shall be necessary for the approval of such plan. Any dissenting
stockholder in stock corporations may exercise his appraisal right in
accordance with the Code: Provided, That if after the approval by the
stockholders of such plan, the board of directors should decide to
abandon the plan, the appraisal right shall be extinguished.
Any amendment to the plan of merger or consolidation may be made,
provided such amendment is approved by majority vote of the respective
boards of directors or trustees of all the constituent corporations and
ratified by the affirmative vote of stockholders representing at least
two-thirds (2/3) of the outstanding capital stock or two-thirds (2/3) of
the members of each of the constituent corporations. Such plan,
together with any amendment, shall be considered as the agreement of
merger or consolidation.
SEC. 78.
Articles of merger or consolidation
. -- After the
approval by the stockholders or members as required by the preceding
section, articles of merger or articles of consolidation shall be
executed by each of the constituent corporations, to be signed by the
president or vice-president and certified by the secretary or assistant
secretary of each corporation setting forth:
1. The plan of the merger or the plan of consolidation;
2. As to stock corporations, the number of shares outstanding, or
in the case of non-stock corporations, the number of members; and
3. As to each corporation, the number of shares or members voting
for and against such plan, respectively.
SEC. 79.
Securities and Exchange Commissions approval and effectivity of merger or consolidation
-- The articles of merger or of consolidation, signed and certified as
hereinabove required, shall be submitted to the Securities and Exchange
Commission in quadruplicate for its approval:
Provided
, That in
the case of merger or consolidation of banks or banking institutions,
building and loan associations, trust companies, insurance companies,
public utilities, educational institutions and other special
corporations governed by special laws, the favorable recommendation of
the appropriate government agency shall first be obtained. Where the
commission is satisfied that the merger or consolidation of the
corporations concerned is not inconsistent with the provisions of this
Code and existing laws, it shall issue a certificate of merger or of
consolidation, as the case may be, at which time the merger or
consolidation shall be effective.
If, upon investigation, the Securities and Exchange Commission has
reason to believe that the proposed merger or consolidation is contrary
to or inconsistent with the provisions of this Code or existing laws, it
shall set a hearing to give the corporations concerned the opportunity
to be heard. Written notice of the date, time and place of said hearing
shall be given to each constituent corporations at least two (2) weeks
before said hearing. The Commission shall thereafter proceed as provided
in this Code.
SEC. 80.
Effects of merger or consolidation
. -- The merger or consolidation, as provided in the preceding sections, shall have the following effects:
The constituent corporations shall become a single
corporation which, in case of merger, shall be the surviving corporation
designated in the plan of merger; and, in case of consolidation, shall
be the consolidated corporation designated in the plan of consolidation;
The separate existence of the constituent
corporations shall cease, except that of the surviving or the
consolidated corporation;
The surviving or the consolidated corporation shall
possess all the rights, privileges, immunities and powers and shall be
subject to all the duties and liabilities of a corporation organized
under this Code;
The surviving or the consolidated corporation shall
thereupon and thereafter possess all the rights, privileges, immunities
and franchises of each of the constituent corporations; and all
property, real or personal, and all receivables due on whatever account,
including subscriptions to shares and other choses in action, and all
and every other interest of, or belonging to, or due to each constituent
corporation, shall be taken and deemed to be transferred to and vested
in such surviving or consolidated corporation without further act or
deed; and
The surviving or consolidated corporation shall be
responsible and liable for all the liabilities and obligations of each
of the constituent corporations in the same manner as if such surviving
or consolidated corporation had itself incurred such liabilities or
obligations; and any claim, action or proceeding pending by or against
any of such constituent corporations may be prosecuted by or against the
surviving or consolidated corporation, as the case may be. The rights
of creditors or any lien upon the property of any of such constituent
corporation shall not be impaired by such merger or consolidation.
[13]
Records, pp. 33-40.
[14]
No. 14, p. 8, Agreement of Merger; records, p. 40.
[15]
Agreement of Merger, pp. 5-6; records, pp. 37-38.
[16]
Ibid., pp. 6-7; records, pp. 38-39.
[17]
Art. 1370, Civil Code.
[18]
Ruben E. Agpalo, Statutory Construction, 1990 ed., p. 94.
[19]
Art. 1144, Civil Code.
[20]
Catholic Bishop of Balanga vs. Court of Appeals, 264 SCRA 181, 193, November 14, 1996.
[21]
Olizon vs. Court of Appeals, 236 SCRA 148, 157, September 1, 1994.
[22]
Chavez vs. Bonto-Perez, 242 SCRA 73, 80-81, March 1, 1995.
[23]
Art. 1311, par. 2, Civil Code.
[24]
79 SCRA 192, 201, September 30, 1977, per Guerrero, J.
[25]
Ibid., p. 202.
[26]
§ 11, Rule 6, Rules of Court.
[27]
Exh. B; records, p. 130.
[28]
Ducasse v. American
Yellow Taxi Operators, Inc., 224 App. Div. 516, 231 NY Supp. 51 (1928),
citing Chipman v. Montgomery, 63 NY 211; in Campos and Campos, supra.
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