Title
Arcilla vs. Court of Appeals
Case
G.R. No. 89804
Decision Date
Oct 23, 1992
Calvin Arcilla, president of CSAR Marine Resources, Inc., held personally liable for unpaid debts after corporate veil pierced due to personal use of corporation for transactions.
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Case Digest (G.R. No. 89804)

Facts:

Background of the Case:

  • Private respondent Emilio Rodulfo filed a complaint for a sum of money against petitioner Calvin S. Arcilla on June 4, 1985, before the Regional Trial Court (RTC) of Catanduanes. The case was docketed as Civil Case No. 1292.
  • The complaint alleged that from late 1981 to early 1983, Arcilla, taking advantage of his close friendship with Rodulfo, secured various items, cash, and checks on credit, totaling P93,358.51. These transactions were evidenced by 30 "vales" (IOUs) signed by Arcilla or his authorized representatives.

Petitioner’s Defense:

  • Arcilla admitted to having business transactions with Rodulfo but claimed that these were for his family corporation, CSAR Marine Resources, Inc. He argued that the "vales" were liquidated through bank loan releases.
  • Arcilla’s main defense was payment, asserting that he had already paid P56,908.20 and P42,363.75 through the Philippine National Bank (PNB) Virac Branch.

Trial Court’s Decision:

  • The trial court found that the "vales" remained unpaid, as they were still in Rodulfo’s possession. The court ruled in favor of Rodulfo, ordering Arcilla to pay P92,358.43 plus interest, attorney’s fees, and costs of suit.

Appeal to the Court of Appeals:

  • Arcilla appealed the decision, but the Court of Appeals initially affirmed the trial court’s ruling. However, upon reconsideration, the Court of Appeals amended its decision, reducing Arcilla’s liability to P23,639.33, representing the outstanding balance of CSAR Marine Resources, Inc.

Petitioner’s Motion for Clarification:

  • Arcilla filed a motion for clarification, arguing that the liability should not be imposed on him personally since the transactions were in the name of CSAR Marine Resources, Inc., which was not a party to the case.
  • The Court of Appeals denied the motion, ruling that the corporate veil should be pierced, and Arcilla, as the president of the corporation, was personally liable.

Issue:

  1. Whether Calvin S. Arcilla is personally liable for the amount adjudged, despite the transactions being in the name of CSAR Marine Resources, Inc.
  2. Whether the Court of Appeals erred in not dismissing the case against Arcilla, considering that CSAR Marine Resources, Inc. was not impleaded as a party.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Conclusion:

  • The Supreme Court upheld the Court of Appeals’ decision, ruling that Arcilla is personally liable for the outstanding balance of P23,639.33, plus interest, attorney’s fees, and costs of suit. The petition was denied for lack of merit.


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