Case Digest (G.R. No. 212885)
Facts:
In Spouses Nolasco Fernandez and Maricris Fernandez v. Smart Communications, Inc. (G.R. No. 212885, July 17, 2019), Everything Online, Inc. (EOL) engaged Smart Communications, Inc. (SMART) in 2006 to provide 2,000 post-paid mobile lines and devices. EOL’s President, Salustiano G. Samaco III, signed corporate service applications and Letters of Undertaking stipulating that EOL’s president, directors, and officers would be “held solidarily liable in their personal capacity” for all charges. A subsequent 2006 Letter Agreement and an EOL Undertaking, co-signed by petitioner Nolasco Fernandez as CEO, reaffirmed that personal liability clause. When franchisee-assigned lines went unpaid, SMART’s demands for over ₱39 million were ignored, prompting an April 1, 2009 Collection Case (No. 09-199) in the Makati RTC against EOL and its officers, including the spouses Fernandez. On November 11, 2009, the RTC granted petitioners’ motions to dismiss for failure to state a cause of action, recalCase Digest (G.R. No. 212885)
Facts:
- Parties and organizational roles
- Everything Online, Inc. (EOL) is an internet‐service company operating through franchisees; Smart Communications, Inc. (SMART) is a mobile‐service provider.
- Petitioners Nolasco and Maricris Fernandez served as CEO and director, respectively, of EOL.
- Formation of SMART service agreements
- In 2006, EOL negotiated to secure 2,000 post‐paid SMART lines; corporate president Samaco III executed two Corporate Service Applications and two Letters of Undertaking, each containing a clause that the president, directors, and officers would be personally and solidarily liable for all charges incurred.
- SMART initially issued 1,119 lines; on September 13, 2006, the parties executed a Letter Agreement and an EOL Undertaking reaffirming EOL’s responsibility for all charges and restating the personal, solidarity liability of its president, directors, and officers (Item 9).
- Dispute over nonpayment
- SMART’s collection department sent recurring bills for lines assigned to franchisees; EOL allegedly refused to accept these, disputing liability for franchisee lines.
- By October 2008, SMART’s outstanding claims against EOL exceeded ₱39 million; SMART’s demand letters (November 2007 and January 2008) went unheeded.
- Litigation in the Regional Trial Court
- On April 1, 2009, SMART filed an amended complaint for collection against EOL and its officers/directors (including the petitioners), seeking a writ of preliminary attachment on their properties.
- Petitioners moved to dismiss, arguing they were not real parties in interest—Maricris for lack of express consent to the liability clause, and Nolasco because his signature alone on the EOL Undertaking did not bind him personally and he was no longer an officer at filing.
- On November 11, 2009, the RTC granted their motions, dismissing the complaint against them and lifting the attachment; motions for reconsideration were denied.
- Decision of the Court of Appeals
- SMART petitioned for certiorari (Rule 65), alleging grave abuse by the RTC; on December 2, 2013, the CA reversed the RTC and reinstated the complaint against Samaco III and spouses Nolasco and Maricris Fernandez.
- Supreme Court recourse
- Petitioners sought review under Rule 45, challenging (a) the propriety of the CA’s use of certiorari to reverse the dismissal and (b) the substantive grounds for suing them as corporate officers.
Issues:
- Procedural issue
- Was a petition for certiorari under Rule 65 the proper remedy to assail the RTC’s dismissal order?
- Substantive issue
- Did the complaint for collection against petitioners fail to state a cause of action because they were not real parties in interest?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)