Mansion Biscuit Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Sometime in 1981, Ty Teck Suan, as president of Edward Ty Brothers Corporation, ordered numerous cartons of nutri-wafer biscuits from Mansion Biscuit Corporation. To pay for these goods, Ty Teck Suan issued four postdated checks totaling P404,980.00, and later, four additional checks totaling P400,000.00, with Siy Gui as co-signor. Mansion Biscuit Corporation delivered the goods, but upon presentment, all the checks were dishonored due to insufficient funds. Despite demands, Ty Teck Suan failed to make good the checks. Mansion Biscuit Corporation subsequently filed criminal cases against Ty Teck Suan and Siy Gui for violation of Batas Pambansa Bilang 22 (Bouncing Checks Law). Procedural History: The Regional Trial Court initially dismissed the criminal cases against Ty Teck Suan and Siy Gui, finding that the checks were issued to guarantee an obligation and not for value, thus not constituting a violation of B.P. Blg. 22. The trial court also set aside an order of attachment. The prosecution moved for reconsideration, seeking clarification on the civil aspect, but the trial court denied this, stating that civil liability could only be pursued in a separate action. Mansion Biscuit Corporation appealed the dismissal of the civil aspect to the Court of Appeals. The Court of Appeals, after noting the death of Ty Teck Suan and substituting him with his heirs, dismissed the appeal, holding that the civil liability was contractual and belonged to Edward Ty Brothers Corporation, not the individuals, and thus required a separate civil action. The Petition: Mansion Biscuit Corporation, represented by its president Ang Cho Hong, filed this petition for review with the Supreme Court, seeking to reverse the Court of Appeals' decision. The petitioner argues that the Court of Appeals erred in limiting its review to contractual liability, in refusing to acknowledge tort or quasi-delict, in insisting that the contractual liability could not be enforced against Ty Teck Suan personally, and in disregarding a previous Court of Appeals ruling regarding the attachment. The petitioner contends that Ty Teck Suan's actions created both civil liability arising from the crime and civil liability arising from quasi-delict, and that the acquittal in the criminal cases only extinguished the former, leaving the latter intact. The petition seeks to enforce this remaining civil liability against the private respondents.
Issue(s)
Whether the civil liability for the unpaid value of the biscuits can be enforced against Ty Teck Suan personally. Whether the civil liability arising from the dishonored checks, if any, could be enforced in the criminal cases despite the acquittal of the accused. Whether the civil liability could be based on quasi-delict or tort.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals in toto, ruling that the civil liability for the unpaid value of the biscuits could not be enforced against Ty Teck Suan personally, nor could it be enforced in the criminal cases. The Court held that the liability was contractual and belonged to Edward Ty Brothers Corporation, necessitating a separate civil action against the corporation.
Ratio Decidendi
On the enforceability of civil liability against Ty Teck Suan personally: The Court ruled in the negative. The records clearly showed that the checks were issued "in payment of cartons of nutri-wafer biscuits purchased from the Mansion Biscuit Corporation, represented by Ang Cho Hong, president thereof, by Edward Ty Brothers Corporation thru said accused Ty Teck Suan." Petitioner itself admitted that the contract was executed between ETBC, represented by Ty Teck Suan as president, and Mansion Biscuit Corporation, represented by Ang Cho Hong as president. Therefore, Ty Teck Suan did not purchase the biscuits for himself but for ETBC in his capacity as its president. Ang Cho Hong sold the biscuits for and on behalf of Mansion Biscuit Corporation. The civil liability of ETBC to Mansion Biscuit Corporation arising from the contract of purchase and sale could not have been, and was not, litigated and resolved in the criminal case, as ETBC was not a party thereto. A separate civil action must be instituted by Mansion Biscuit Corporation against ETBC to enforce the contract between them. On the enforceability of civil liability in the criminal cases despite acquittal: The Court held that the acquittal of Ty Teck Suan and Siy Gui in the criminal cases for violation of B.P. Blg. 22 extinguished both their criminal and civil liability arising from the alleged delict. The RTC's order acquitting them clearly stated that the issuance of the checks in question did not constitute a violation of B.P. Blg. 22. Consequently, no civil liability arising from the alleged delict could be awarded in the criminal proceedings. The Court reiterated the principle that where the civil liability is based solely on the crime charged, and the accused is acquitted, the civil liability is extinguished. However, if the civil liability can be predicated on other sources of obligation, such as contract or quasi-delict, it may survive and be pursued in a separate civil action. On the possibility of civil liability based on quasi-delict or tort: The Court found no basis for a claim of quasi-delict or tort. The Court noted that Mansion Biscuit Corporation's stated issue on appeal was whether it had established its right to the payment of the goods delivered, which clearly indicated an enforcement of a contractual, not a tortious, liability. Even assuming a basis for a quasi-delict claim, it must still be addressed against ETBC, as the post-dated checks were issued not for personal obligations but for the corporation's. The alleged fraud was merely incidental to the contractual obligation, not an independent act that could serve as a source of obligation. The acts complained of in cited cases where a contract does not preclude an action on quasi-delict were performed to break an existing contract, whereas the alleged fraud herein was committed at the time of the creation of the contractual relationship and as an incident thereof. Therefore, any claim for tortious liability must be ventilated in a separate action against the proper party.
Main Doctrine
The civil liability arising from a contract entered into by a corporation, even if signed by its president, cannot be enforced against the president personally unless it is proven that he assumed personal liability or committed a tortious act independent of the contract. Acquittal in a criminal case for violation of Batas Pambansa Bilang 22 does not extinguish the civil liability if such liability is based on contract or quasi-delict, but such liability must be pursued in a separate civil action against the proper party.