Araneta v. De Joya
REITERATIONFacts
The Antecedents: In November 1952, respondent Antonio R. de Joya, then general manager of Ace Advertising, proposed sending an employee, Ricardo Taylor, to the United States for special studies in television. The board of directors did not act on the proposal. Nevertheless, in September 1953, respondent sent Taylor abroad. Respondent assured director J. Antonio Araneta that Taylor's expenses would not be borne by the company, a statement later confirmed in a memorandum. While abroad from September 1, 1953, to March 15, 1954, Taylor continued to receive his salaries, which appeared in vouchers prepared and approved by the respondent. These salaries were included in semi-monthly payroll checks. Petitioner Luis Ma. Araneta, a vice-president and director, signed three of these checks on November 27, December 15, and December 29, 1953. Other checks were signed by the respondent or the company treasurer, Vicente Araneta. Ace Advertising disbursed a total of P5,043.20 for Taylor's travel and studies. Procedural History: On August 23, 1954, Ace Advertising filed a complaint against respondent De Joya for recovery of the P5,043.20, alleging the trip was made without its knowledge, authority, or ratification. Respondent denied this, claiming ratification by the board and that his by-law authority as general manager permitted the trip for the company's benefit. Respondent also filed a third-party complaint against Vicente Araneta, petitioner Luis Ma. Araneta, and Ricardo Taylor. The trial court ordered respondent De Joya to pay Ace Advertising P5,043.20 plus interest and dismissed the third-party complaint. On appeal, the Court of Appeals affirmed the trial court's judgment in favor of Ace Advertising but reversed the dismissal of the third-party complaint, finding that Taylor's trip was neither authorized nor ratified. The appellate court concluded that both Vicente and Luis Araneta were informed, gave their approval, and were privy to the unauthorized disbursement, thus jointly liable for quasi-delict. The Petition: Petitioner Luis Ma. Araneta sought review of the Court of Appeals' decision ordering him to indemnify Antonio R. de Joya for one-third of the sum paid to Ace Advertising.
Issue(s)
Whether petitioner Luis Ma. Araneta is guilty of a quasi-delict for his participation in the unauthorized disbursement of corporate funds. Whether the existence of a contractual position bars recovery for tort.
Ruling
The judgment of the Court of Appeals is affirmed. Petitioner Luis Ma. Araneta is held liable for his participation in the unauthorized disbursement of corporate funds.
Ratio Decidendi
On whether petitioner Luis Ma. Araneta is guilty of a quasi-delict: The Court held that the petitioner is guilty of a quasi-delict. His assertion of signing the payroll checks in good faith was unsubstantiated, as he did not testify or offer proof to support this claim. Despite being a vice-president and director of Ace Advertising, the petitioner remained passive throughout Taylor's stay abroad concerning the unauthorized disbursements. His approval of three payroll checks for Taylor's salary distinctly demonstrated his neglect in properly performing his duties, to the detriment of the firm. The Court of Appeals' finding that both Vicente and Luis Araneta were informed, gave their approval, and were privy to the unauthorized disbursement, making it a venture with their stamp of approval, was upheld. This unauthorized expenditure of corporate funds, which could not have happened without their acts, constituted a quasi-delict committed upon the corporation. On whether the existence of a contractual position bars recovery for tort: The Court reiterated that the existence of a contract between parties does not preclude the commission of a tort by one against the other and the consequent recovery of damages. The fact that petitioner occupied a contractual position at Ace Advertising was deemed of no moment. This principle, repeatedly held by the Supreme Court, allows for recourse through tort actions even when a contractual relationship exists, as the nature of the wrong committed is distinct from the contractual breach.
Main Doctrine
An officer of a corporation who neglects to perform his duties properly, leading to unauthorized disbursement of corporate funds, can be held liable for quasi-delict, even if occupying a contractual position, as the existence of a contract does not bar recovery for tort.