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CALTEX v. Luzon Stevedoring Corporation

PSTC and LUSTEVECO entered into an agreement where PSTC assumed all of LUSTEVECO's obligations relating to its tanker and bulk business, including a pending case where the court ruled in favor of Caltex. Caltex demanded payment from PSTC based on this agreement. PSTC claimed it was not liable as it was not a party to the original case. However, the court ruled that under the Corporation Code, an assignee is liable for the obligations of the assignor when it acquires all or substantially all of the assignor's assets. Even without expressly assuming the debt, PSTC would still be liable to Caltex up to the value of assets transferred to prevent fraud against creditors like Caltex

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104 views1 page

CALTEX v. Luzon Stevedoring Corporation

PSTC and LUSTEVECO entered into an agreement where PSTC assumed all of LUSTEVECO's obligations relating to its tanker and bulk business, including a pending case where the court ruled in favor of Caltex. Caltex demanded payment from PSTC based on this agreement. PSTC claimed it was not liable as it was not a party to the original case. However, the court ruled that under the Corporation Code, an assignee is liable for the obligations of the assignor when it acquires all or substantially all of the assignor's assets. Even without expressly assuming the debt, PSTC would still be liable to Caltex up to the value of assets transferred to prevent fraud against creditors like Caltex

Uploaded by

shookt panboi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CALTEX (PHILS) INC vs.

PNOC SHIPPING AND tanker and bulk business, PSTC also assumed all
TRANSPORT CORP of LUSTEVECO’s obligations pertaining to such
business.
498 SCRA 400

Even without the Agreement, PSTC is still liable


to Caltex.
FACTS:
The Corporation Code under Section 40 allows
PSTC and Luzon Stevedoring Corporation the transfer of all or substantially all the
(LUSTEVECO) entered into an Agreement of properties and assets of a corporation.
Assumption of Obligations. The agreement However, the transfer should not prejudice the
provides that PSTC shall assume all the creditors of the assignor. The only way the
obligations of LUSTEVECO with respect to, transfer can proceed without prejudice to the
among others, the claims of Caltex pertaining to creditors is to hold the assignee liable for the
a pending case. obligations of the assignor. The acquisition by
the assignee of all or substantially all of the
In the said pending case of Caltex (Phils.), Inc. v. assets of the assignor necessarily includes the
Luzon Stevedoring Corporation before the IAC, assumption of the assignor’s liabilities, unless
the IAC ruled in favor of Caltex and said order the creditors who did not consent to the
became final and executory. The RTC issued a transfer choose to rescind the transfer on the
writ of execution. However, the judgment was ground of fraud. To allow an assignor to
not satisfied because of the prior foreclosure of transfer all its business, properties and assets
LUSTEVECO’s properties. without the consent of its creditors and without
Caltex subsequently learned of the Agreement requiring the assignee to assume the assignor’s
between PSTC and LUSTEVECO. Caltex sent obligations will defraud the creditors. The
successive demands to PSTC asking for the assignment will place the assignor’s assets
satisfaction of the judgment. PSTC informed beyond the reach of its creditors.
Caltex that it was not a party to the prior case
and thus, PSTC would not pay LUSTEVECO’s
judgment debt. PSTC advised Caltex to demand
satisfaction of the judgment directly from
Even if PSTC did not expressly assume to pay
LUSTEVECO.
the creditors of LUSTEVECO, PSTC would still be
ISSUE: liable to Caltex up to the value of the assets
transferred. The transfer of all or substantially
Whether PSTC is liable for the obligations of all of the unencumbered assets of LUSTEVECO
LUSTEVECO to Caltex. to PSTC cannot work to defraud the creditors of
RULING: LUSTEVECO. A creditor has a real interest to go
after any person to whom the debtor
Yes. PSTC may be held liable for the obligations fraudulently transferred its assets
of LUSTEVECO to Caltex.

First, Caltex may recover the judgment debt


from PSTC because the Agreement provides
that PSTC shall assume all the obligations of
LUSTEVECO.

In the said agreement, LUSTEVECO transferred,


conveyed and assigned to PSTC all of
LUSTEVECO’s business, properties and assets
pertaining to its tanker and bulk business
"together with all the obligations relating to the
said business, properties and assets." When
PSTC assumed all the properties, business and
assets of LUSTEVECO pertaining to LUSTEVECO’s

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