Case Summary (G.R. No. 228799)
Petitioner, Respondent, and Relationship
Germo was retained under the TCA dated September 21, 2004, to negotiate and perfect sales contracts for MRII on a purely commission basis, plus a monthly allowance of ₱5,000.00. The agreement expressly negated any employer–employee relationship.
Underlying Transaction and Dispute
During the TCA’s effectiveness, Germo secured a daily supply contract of 700 cubic meters of purified water with International Container Terminal Services, Inc. (ICTSI), which began on February 22, 2007. ICTSI faithfully paid MRII, but MRII failed to remit Germo’s commissions, which had accrued to ₱2,225,969.56 by December 2009.
Procedural History
Germo first sought relief before the National Labor Relations Commission, which dismissed for lack of employer–employee relationship. A civil suit in the Regional Trial Court (RTC) was dismissed without prejudice for procedural defects. Germo refiled on February 28, 2011, praying for unpaid commissions, moral and exemplary damages, and attorney’s fees. MRII and Tompar denied liability, challenged Germo’s legal personality, and alleged that another individual procured the ICTSI account.
RTC Decision
On January 14, 2015, the RTC declared MRII and Tompar in default due to repeated absences, admitted Germo’s ex parte evidence, and found: (1) the TCA valid; (2) Germo’s efforts produced the ICTSI contract; (3) MRII failed to pay commissions spanning February 2007 to March 2012 totaling ₱4,499,412.84; and (4) damages were warranted to deter abuse. The court awarded commissions with legal interest, ₱100,000.00 moral damages, ₱100,000.00 exemplary damages, ₱50,000.00 attorney’s fees, and imposed a lien for filing fees.
Court of Appeals Ruling
On August 8, 2016, the Court of Appeals affirmed. It held Germo met the burden of proof on the TCA’s validity, his role in securing the ICTSI contract, and MRII’s nonpayment. New theories of NLRC jurisdiction and Germo’s capacity were deemed waived and contradicted by judicial admissions. A motion for reconsideration was denied on October 14, 2016.
Issue Before the Supreme Court
Whether the Court of Appeals correctly upheld the solidary liability of MRII and Antonio Tompar for Germo’s claims.
Applicable Law
Decision rendered in 2018 invokes the 1987 Philippine Constitution. Relevant provisions include:
- Rule 129, Section 4 (judicial admissions)
- Rule 3, Section 21 (indigent party)
- Rule 141, Section 19 (lien on awards)
Corporate law principles affirm a corporation’s separate juridical personality, shielding officers from personal liability absent bad faith or gross negligence.
Supreme Court Ruling and Reasoning
The petition is partly meritorious. New theories on jurisdiction and Germo’s capacity were correctly excluded as they contravened prior judicial admissions in the Answer. The courts below properly found: (a) a valid, binding TCA; (b) Germo’s commission-based compensation; (c) Germo’s successful procurement of the ICTSI contract; and (d) MRII’s refusal to pay. Factual findings affirmed by the Court of Appeals merit respect and will not be disturbed absent overlooked material facts.
However, Tompar’s solidary liability is reversed. Under corporate law, officers are not personally liable for corporate obligations unless a complaint alleges and clearly proves their assent to
Case Syllabus (G.R. No. 228799)
Facts of the Case
- Petitioner Mactan Rock Industries, Inc. (MRII) is a domestic corporation supplying water, industrial maintenance chemicals, and related services; Antonio Tompar served as its President/CEO.
- On September 21, 2004, MRII, through Tompar, and respondent Benfrei S. Germo executed a Technical Consultancy Agreement (TCA).
- Under the TCA, Germo was engaged as MRII’s marketing consultant on a purely commission basis, with a monthly allowance of ₱5,000.00, and with no employer-employee relationship.
- On May 2, 2006, Germo negotiated a contract with International Container Terminal Services, Inc. (ICTSI) for the daily supply of 700 cubic meters of purified water.
- MRII began supplying water on February 22, 2007; ICTSI consistently paid MRII but MRII allegedly failed to pay Germo commissions amounting to ₱2,225,969.56 as of December 2009 (inclusive of interest).
Procedural History
- Germo first filed a complaint with the NLRC, which was dismissed for lack of employer-employee relationship.
- A subsequent civil action before the RTC of Muntinlupa, Branch 256, was dismissed without prejudice for failure to mark documentary evidence at pre-trial.
- Germo filed the present complaint in Civil Case No. 11-029 before RTC Muntinlupa, Branch 276 on February 28, 2011, seeking unpaid commissions, moral and exemplary damages, and costs.
- MRII and Tompar answered, denying employer-employee status, challenging Germo’s proof of ICTSI negotiations, and seeking recovery of litigation expenses and attorney’s fees.
- Due to multiple absences by MRII, Tompar, and their counsel, the RTC declared them in default and allowed Germo to present evidence ex parte.
RTC Decision (January 14, 2015)
- Found the TCA valid and binding; established Germo’s role as commission-based marketing consultant.
- Concluded that Germo’s efforts directly produced MRII’s ICTSI contract; Germo presented sales invoices from February 2007 to March 2012.
- Ordered MRII and Tompar to pay Germo:
- ₱4,499,412.84 as unpaid commissions (Feb. 200