Case Digest (G.R. No. 100812)
Facts:
Francisco Motors Corporation v. Court of Appeals and Spouses Gregorio and Librada Manuel, G.R. No. 100812, June 25, 1999, Supreme Court Second Division, Quisumbing, J., writing for the Court.On January 23, 1985, petitioner Francisco Motors Corporation (FMC) filed Civil Case No. 9542 to recover P3,412.06 (balance for a jeep body), P20,454.80 (unpaid balance for vehicle repair), and P6,000.00 for costs and attorney’s fees from respondents Spouses Gregorio and Librada Manuel. In their answer the Manuels asserted a permissive counterclaim: Gregorio Manuel claimed P50,000.00 as unpaid attorney’s fees for legal services he rendered to members of the Francisco family in Special Proceedings No. 7803 (intestate estate of Benita Trinidad). He alleged those family members were incorporators, directors and officers of FMC.
At trial, Branch 135, Regional Trial Court, Makati, ruled in favor of FMC on its collection claim but allowed Gregorio Manuel’s counterclaim. Because FMC did not answer the counterclaim, the trial court declared FMC in default and accepted ex parte evidence, finding that Gregorio had rendered unpaid legal services and ordering payment of P50,000.00.
Both parties appealed. On April 15, 1991, the Court of Appeals (C.A. G.R. CV No. 10014) affirmed the trial court. The Court of Appeals held (a) no separate summons was required for a counterclaim and that FMC had defaulted for failure to answer within the ten-day period under Section 4, Rule 11; and (b) the corporate veil could be pierced so FMC could be held liable for fees owed by its incorporators/directors because equity demanded it. Reconsideration before the CA was denied on July 1, 1991.
FMC filed this petition for review on certiorari under Rule 45 seeking annulment of the Court of Appeals decision. The Supreme Court considered whether the trial court had jurisdiction ove...(Pro-only)
Issues:
- Did the trial court acquire jurisdiction over Francisco Motors Corporation with respect to the permissive counterclaim without a separate summons, and was FMC properly declared in default for failing to answer the counterclaim?
- May the corporate veil of Francisco Motors Corporation be pierced so that the corporation may be held liable for unpaid personal attorney’s fees incurred by its i...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)