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Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-48930 February 23, 1944
NTON!O "#$UE#,petitioner,vs.FRNC!SCO %E &OR',respondent.
x---------------------------------------------------------x
G.R. No. L-48931 February 23, 1944
FRNC!SCO %E &OR',petitioner,
vs.NTON!O "#$UE#,respondent.
O#ET, J.(
This action as co!!enced in the Court of "irst #nstance of
Manila b$"rancisco de Bor%a a&ainst Antonio 'a()ue( and
"ernando Busue&o torecover fro! the! %ointl$ and severall$ the
total su! of P*,+.+ uponthree alle&ed causes of action, to
it
"irst, that in or about the !onth of /anuar$, 012, the
defendants %ointl$
and severall$ obli&ated the!selves to sell to the plaintiff
*, cavans ofpala$ at P.0 per cavan, to be delivered durin& the
!onth of "ebruar$,012, the said defendants havin& subse)uentl$
received fro! the plaintiffin virtue of said a&ree!ent the su!
of P3,*4 that the defendantsdelivered to the plaintiff durin&
the !onths of "ebruar$, March, and April,012, onl$ ,*33 cavans of
pala$ of the value of P5,*.3 and refusedto deliver the balance of
0,50 cavans of the value of P2,0+5.notithstandin& repeated
de!ands. 6econd, that because of defendants7refusal to deliver to
the plaintiff the said 0,50 cavans of pala$ ithin theperiod above
!entioned, the plaintiff suffered da!a&es in the su! ofP0,.
And, third, that on account of the a&ree!ent above !entionedthe
plaintiff delivered to the defendants *, e!pt$ sac8s, of hich
the$
returned to the plaintiff onl$ ,*1 and refused to deliver to the
plaintiffthe balance of 0,50 sac8s or to pa$ their value
a!ountin& to P2++.54
and that on account of such refusal the plaintiff suffered
da!a&es in thesu! of P05.
The defendant Antonio 'a()ue( ansered the co!plaint, den$in&
havin&entered into the contract !entioned in the first cause of
action in his onindividual and personal capacit$, either solel$ or
toðer ith hiscodefendant "ernando Busue&o, and
alle&in& that the a&ree!ent for thepurchase of *,
cavans of pala$ and the pa$!ent of the price ofP3,* ere !ade b$ the
plaintiff ith and to the Natividad-'as)ue(6abani 9evelop!ent Co.,
#nc., a corporation or&ani(ed and existin&under the las of
the Philippines, of hich the defendant Antonio'a()ue( as the
actin& !ana&er at the ti!e the transaction too8 place.B$ a$
of counterclai!, the said defendant alle&ed that he
sufferedda!a&es in the su! of P0, on account of the filin&
of this actiona&ainst hi! b$ the plaintiff ith full
8noled&e that the said defendanthad nothin& to do hatever
ith an$ and all of the transactions!entioned in the co!plaint in
his on individual and personal capacit$.
The trial court rendered %ud&!ent orderin& the defendant
Antonio'a()ue( to pa$ to the plaintiff the su! of P2,0+5. plus the
su! ofP2++.5, ith le&al interest on both su!s, and
absolvin& the defendant"ernando Busue&o :treasurer of the
corporation; fro! the co!plaint andthe plaintiff fro! the defendant
Antonio 'a()ue(7 counterclai!.
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pala$ al precio de P.0 el cavan, de los cuales, dichode!andante
sola!ente recibio ,532 cavanes4 $ )ue asi!is!orecibio para su
envase *, sacos vacios. Esta provbado )uede dichos *, sacos vacios
sola!ente se entre&aron, ,532)uedando en poder del de!andado el
resto, $ cu$o valor es el deP.* cada uno. Presentada la de!anda
contra los de!andados
Antonio 'a()ue( $ "ernando Busue&o para el pa&o de
lacantidad de P*,+.+, con sus intereses le&ales desde el 0.o
de
!ar(o de 012 hasta su co!pleto pa&o $ las costas, el
/u(&adode Pri!era #nstancia de Manila el asunto condenando a
Antonio'a()ue( a pa&ar al de!andante la cantidad de P2,0+5.,
!asla cantidad de P2++.5, con sus intereses le&ales,
absolviendo alde!andado "ernando Busue&o de la de!anda $ al
de!andantede la reconvencion de los de!andados, sin
especialpronuncia!iento en cuanto a las costas. 9e dicha decision
apeloel de!andado Antonio 'a()ue(, apuntado co!o principal error
elde )ue el habia sido condenado personal!ente, $ no lacorporacion
por el representada.
6e&un la preponderancia de las pruebas, la venta hecha
porAntonio 'a()ue( a favor de "rancisco de Bor%a de los *,cavanes
de pala$ fue en su capacidad de Presidente interino $Mana&er de
la corporacion Natividad-'a()ue( 6abani9evelop!ent Co., #nc. Asi
resulta del Exh. 0, )ue es la copia alcarbon del recibo
otor&ado por el de!andado 'a()ue(, $ cu$oori&inal lo habia
perdido el de!andante, se&un el. Asi ta!bienconsta en los
libros de la corporacion arriba !encionada, puesto)ue en los !is!os
se ha asentado tanto la entrada de losP3,*, precio del pala$, co!o
su envio al &obierno en pa&o delos al)uileres de la
>acienda 6abani. Asi !is!o lo ad!itio"rancisco de Bor%a al
abo&ado 6r. /acinto To!acru(, posterior
presidente de la corporacion sucesora en el arrenda!iento de
la6abani Estate, cuando el solicito sus buenos oficios para el
cobrodel precio del pala$ no entre&ado. Asi i&ual!ente lo
declaro el)ue hi(o entre&a de parte del pala$ a Bor%a, "elipe
'eneracion,cu$o testi!onio no ha sido refutado. ? asi se deduce de
la !is!ade!anda, cuando se inclu$o en ella a "ernando
Busue&o,tesorero de la Natividad-'a()ue( 6abani 9evelop!ent
Co., #nc.
6iendo esto asi, la principal responsable debe ser la
Natividad-'a()ue( 6abani 9evelop!ent Co., #nc., )ue )uedo
insolvente $de%o de existir. El /ue( sentenciador declaro, sin
e!bar&o, al
de!andado 'a()ue( responsable del pa&o de la
cantidadrecla!ada por su ne&li&encia al vender los
referidos *,
cavanes de pala$ sin averi&uar antes si o no dicha
cantidadexistia en las bode&as de la corporacion.
Resulta del Exh. 3 )ue despues de la venta de los *, cavanesde
pala$ a "rancisco de Bor%a, el !is!o de!andado vendio a@on& Ah
Pho$ 0,5 cavanes al precio de P. el cavan, $deci!os 7despues7
por)ue esta ulti!a venta aparece asentadadespues de la pri!era.
6e&un esto, el apelante no sola!ente
obro con ne&li&encia, sino interviniendo culpa de su
parte, por lo)ue de acuerdo con los arts. 00, 002 $ 01 del
Codi&o Civil,el debe ser responsable subsidiaria!ente del
pa&o de la cantidadob%ecto de la de!anda.
En !eritos de todo lo expuesto, se confir!a la decision
apeladacon la !odificacion de )ue el apelante debe pa&ar al
apelado lasu!a de P,15.+ co!o valor de los 0,*0+ cavanes de
pala$)ue de%o de entre&ar al de!andante, !as la su!a de
P221.3co!o i!porte de los 0,*0+ sacos vacios, )ue de%o de devolver,
ara(on de P.* el saco, total P2,20*.+3, con sus intereses
le&ales desde la interposicion de la de!anda $ las costas
dea!bas instancias.
'ista la !ocion de reconsideracion de nuestra decision de
fecha02 de ctubre de 01*, $ ale&andose en la !is!a )ue cuando
elapelante vendio los 0,5 cavanes de pala$ a Ah Pho$, lacorporacion
todavia tenia bastante existencia de dicho &rano, $no estando
dicho extre!o suficiente!ente discutido $ probado, $pudiendo variar
el resultado del asunto, de%a!os sin efectonuestra citada decision,
$ ordena!os la devolucion de la causa al/u(&ado de ori&en
para )ue reciba pruebas al efecto $ dictedespues la decision
correspondiente.
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'a()ue( in his personal capacit$ or as !ana&er of the
Natividad-'a()ue( 6abani 9evelop!ent Co., #nc. The Court of Appeals
found thataccordin& to the preponderance of the evidence the
sale !ade b$
Antonio 'a()ue( in favor of "rancisco de Bor%a of *, cavans of
pala$as in his capacit$ as actin& president and !ana&er of
the corporationNatividad-'a()ue( 6abani 9evelop!ent Co., #nc. That
findin& of fact isfinal and, it resolvin& the onl$ issue
involved, should be deter!inative ofthe result.
The Court of Appeals doubl$ erred in orderin& that the cause
bere!anded to the court of ori&in for further trial to
deter!ine hether thecorporation had sufficient stoc8 of pala$ at
the ti!e appellant sold, 05cavans of pala$ to @on& Ah Pho$.
"irst, if that point as !aterial to theissue, it should have been
proven durin& the trial4 and the state!ent ofthe court that it
had not been sufficientl$ discussed and proven as no
%ustification for orderin& a ne trial, hich, b$ the a$,
neither part$ hadsolicited but a&ainst hich, on the contrar$,
both parties no vehe!entl$protest. 6econd, the point is, in an$
event, beside the issue, and this eshall no discuss in connection
ith the ori&inal %ud&!ent of the Court of
Appeals hich the plaintiff cross-petitioner see8s to
!aintain.
The action bein& on a contract, and it appearin& fro!
the preponderanceof the evidence that the part$ liable on the
contract is the Natividad-'a()ue( 6abani 9evelop!ent Co., #nc. hich
is not a part$ herein, theco!plaint should have been dis!issed.
Counsel for the plaintiff, in hisbrief as respondent, ar&ues
that althou&h b$ the preponderance of theevidence the trial
court and the Court of Appeals found that 'a()ue(celebrated the
contract in his capacit$ as actin& president of thecorporation
and althou&h it as the latter, thru 'a()ue(, ith hich
theplaintiff had contracted and hich, thru 'a()ue(, had received
the su! ofP3,* fro! Bor%a, and althou&h that as true fro! the
point of vie of ale&al fiction, ello no i!pede )ue ta!bien sea
verdad lo ale&ado en lade!anda de )ue la !is!a persona de
'as)ue( fue la )ue contrato conBor%a $ )ue la !is!a persona de
'as)ue( fue )uien recibio la su!a deP3,*. But such ar&u!ent is
invalid and insufficient to sho that thepresident of the
corporation is personall$ liable on the contract dul$ andlafull$
entered into b$ hi! in its behalf.
#t is ell 8non that a corporation is an artificial bein&
invested b$ laith a personalit$ of its on, separate and distinct
fro! that of itsstoc8holders and fro! that of its officers ho
!ana&e and run its affairs.The !ere fact that its personalit$
is oin& to a le&al fiction and that it
necessaril$ has to act thru its a&ents, does not !a8e the
latter personall$liable on a contract dul$ entered into, or for an
act lafull$ perfor!ed, b$
the! for an in its behalf. The le&al fiction b$ hich the
personalit$ of acorporation is created is a practical realit$ and
necessit$. Dithout it nocorporate entities !a$ exists and no
corporate business !a$ betransacted. 6uch le&al fiction !a$ be
disre&arded onl$ hen an atte!ptis !ade to use it as a cloa8 to
hide an unlaful or fraudulent purpose. Nosuch thin& has been
alle&ed or proven in this case. #t has not beenalle&ed nor
even inti!ated that 'a()ue( personall$ benefited b$ thecontract of
sale in )uestion and that he is !erel$ invo8in& the le&al
fiction
to avoid personal liabilit$. Neither is i t contended that he
entered into saidcontract for the corporation in bad faith and ith
intent to defraud theplaintiff. De find no le&al and factual
basis upon hich to hold hi! liableon the contract either
principall$ or subsidiaril$.
The trial court found hi! &uilt$ of ne&li&ence in
the perfor!ance of thecontract and held hi! personall$ liable on
that account. n the otherhand, the Court of Appeals found that he
no sola!ente obro conne&li&encia, sino interveniendo culpa
de su parte, por lo )ue de acuerdocon los arts. 00, 002 $ 01 del
Codi&o Civil, el debe ser responsablesubsidiaria!ente del
pa&o de la cantidad ob%eto de la de!anda. De
thin8 both the trial court and the Court of Appeals erred in la
in soholdin&. The$ have !anifestl$ failed to distin&uish a
contractual fro! anextracontractual obli&ation, or an
obli&ation arisin& fro! contract fro! anobli&ation
arisin& fro! culpa aquiliana. The fault and ne&li&ence
referredto in articles 000-00* of the Civil Code are those
incidental to thefulfill!ent or nonfullfill!ent of a contractual
obli&ation4 hile the fault orne&li&ence referred to in
article 01 is the culpa aquiliana of the civilla, ho!olo&ous
but not identical to tort of the co!!on la, hich &ivesrise to
an obli&ation independentl$ of an$ contract. :Cf. Manila
R.R.Co. vs.Cia. Trasatlantica, 23 Phil., 3+5, 33+-314 Can&co
vs.Manila R.R.Co., 23 Phil. +3.; The fact that the corporation,
actin& thru 'a()ue( asits !ana&er, as &uilt$ of
ne&li&ence in the fulfill!ent of the contract, did
not !a8e 'a()ue( principall$ or even subsidiaril$ liable for
suchne&li&ence. 6ince it as the corporation7s contract, its
nonfulfill!ent,hether due to ne&li&ence or fault or to an$
other cause, !ade thecorporation and not its a&ent liable.
n the other hand if independentl$ of the contract 'a()ue( b$ his
fault orne&li&ence cause da!a&ed to the plaintiff, he
ould be liable to the latterunder article 01 of the Civil Code. But
then the plaintiff7s cause ofaction should be based on culpa
aquiliana and not on the contractalle&ed in his co!plaint
herein4 and 'a()ue(7 liabilit$ ould be principaland not !erel$
subsidiar$, as the Court of Appeals has erroneousl$ held.
No such cause of action as alle&ed in the co!plaint or tried
b$ expressor i!plied consent of the parties b$ virtue of section *
of Rule 0+. >ence
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the trial court had no %urisdiction over the issue and could not
ad%udicateupon it :Re$es vs.9ia(, =.R. No. *3+5*.; Conse)uentl$ it
as error forthe Court of Appeals to re!and the case to the trial
court to tr$ anddecide such issue.
#t onl$ re!ains for us to consider petitioner7s second
assi&n!ent of errorreferrin& to the loer courts7 refusal to
entertain his counterclai! forda!a&es a&ainst the
respondent Bor%a arisin& fro! the brin&in& of this
action. The loer courts havin& sustained plaintiff7s action.
The findin& ofthe Court of Appeals that accordin& to the
preponderance of the evidencethe defendant 'a()ue( celebrated the
contract not in his personalcapacit$ but as actin& president
and !ana&er of the corporation, doesnot arrant his contention
that the suit a&ainst hi! is !alicious andtortious4 and since e
have to decide defendant7s counterclai! upon thefacts found b$ the
Court of Appeals, e find no sufficient basis uponhich to sustain
said counterclai!. #ndeed, e feel that a a !atter of!oral %ustice e
ou&ht to state here that the indi&nant attitude adopted
b$the defendant toards the plaintiff for havin& brou&ht
this action a&ainsthi! is in our esti!ation not holl$
ri&ht. Altho fro! the le&al point of vie
he as not personall$ liable for the fulfill!ent of the contract
entered intob$ hi! on behalf of the corporation of hich he as the
actin& presidentand !ana&er, e thin8 it as his !oral dut$
toards the part$ ith ho!he contracted in said capacit$ to see to it
that the corporationrepresented b$ hi! fulfilled the contract b$
deliverin& the pala$ it hadsold, the price of hich it had
alread$ received. Recreant to such dut$ asa !oral person, he has no
le&iti!ate cause for indi&nation. De feel thatunder the
circu!stances he not onl$ has no cause of action a&ainst
theplaintiff for da!a&es but is not even entitled to costs.
The %ud&!ent of the Court of Appeals is reversed, and the
co!plaint ishereb$ dis!issed, ithout an$ findin& as to
costs.
Yulo, C.J., Moran, Horrilleno and Bocobo, JJ.,concur.
Se)ara*e O)++o
PRS, J., dissentin&
