Case Summary (G.R. No. L-49834)
Controversy and Initial Proceedings
The matter began when Gervacio Cu filed a complaint in 1969 for collection of a sum of money against the petitioners, asserting that they were solidarily liable under a receipt dated August 10, 1964. The receipt indicated that the tobacco would be sold and paid for by the Philippine Virginia Tobacco Administration, with specific terms regarding collection and payment.
Petitioners' Claims
The petitioners argue that their liability should not be personal but as representatives of Bacarra (I.N.) FaCoMa, Inc. They contend that any obligation should be considered joint rather than solidary. They further claim that their co-defendant, Bienvenido E. Acosta, acted independently and should bear sole responsibility for any alleged loss. A cross-claim against Acosta was denied by the trial court, which the petitioners assert was an error.
Trial Court Decision
The trial court concluded that the petitioners were jointly and severally liable, ordering them to pay Gervacio Cu P19,350.00, plus additional amounts for attorney’s fees and other expenses. This decision was based on the premise that the receipt constituted a personal obligation of the petitioners.
Appellate Court's Affirmation
The Court of Appeals upheld the trial court’s decision, concluding that the petitioners acted in their personal capacity, despite the receipt bearing their official titles. The court highlighted the lack of evidence establishing that the petitioners were authorized by the corporation to enter into the agreement and noted a deviation from the standard business practices of the corporation.
Supreme Court's Review
The Supreme Court found merit in the petitioners’ position, noting the importance of their official titles inscribed on the receipt. The Court determined that the receipt and supporting documentation indicated that the contract was made on behalf of Bacarra (I.N.) FaCoMa, Inc., rather than personally by the petitioners. This interpretation was supported by witness testimony that the documentation for the tobacco was issued in the corporation's name.
Authority and Corporate Liability
The Court examined the petitioners’ claim regarding corporate authority, asserting that the majority of the Board of Directors are normally authorized to bind the corporation in transactions without additional permission. The necessity for a separate resolution to authorize the transaction was deemed redundant.
Business Practices and Alienation of Transaction
The Court further addressed the issues revolving around the private respondent's alien status, clarifying that the distinct procedures followed in executing the receipt stemmed from legal complexities regarding transactions involving non-member
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Case Overview
- The case revolves around the liability of the petitioners, who are officers of Bacarra (I.N.) FaCoMa, Inc., in relation to a receipt they signed concerning a transaction with the private respondent, Gervacio Cu.
- The trial court ruled that the petitioners were solidarily liable to the private respondent, a decision which was affirmed by the appellate court.
- The petitioners contest this ruling, arguing that their liability should be corporate, not personal, and that even if personal liability were established, it should only be joint and not solidary.
Background of the Case
- The controversy originated from a receipt dated August 10, 1964, wherein the petitioners acknowledged the receipt of a truckload of Virginia tobacco from Gervacio Cu.
- The receipt included stipulations regarding payment and collection processes related to the tobacco.
- A conflict arose when Gervacio Cu was not paid for the tobacco, leading him to file a complaint for collection against the signatories of the receipt.
Trial Court Proceedings
- During the trial, evidence revealed that the tobacco was diverted by Bienvenido E. Acosta, one of the defendants, without the knowledge or consent of the other petitioners.
- The trial court denied the petitioners' motion to file a cross-claim against Acosta, citing that it was intended for delay rather than a legitimate claim of liability.
- The trial court ultimately ruled in favor of Gervacio Cu, ordering the petitioners to pay various sums totaling P19,3