Bautista v. Auto Plus Traders, Inc.
REITERATIONFacts
The Antecedents: Petitioner Claude P. Bautista, as President and Presiding Officer of Cruiser Bus Lines and Transport Corporation, purchased spare parts from Auto Plus Traders, Inc. and issued two postdated checks to cover the purchases. These checks were dishonored due to insufficient funds. Procedural History: Private respondent filed an affidavit-complaint for violation of Batas Pambansa Blg. 22 (BP 22). Two Informations were filed with the MTCC, Davao City. Petitioner pleaded not guilty. The MTCC granted the demurrer to evidence, ordering Cruiser Bus Lines and Transport Corporation to pay the complainant the value of the checks with interest and costs. Petitioner's motion for partial reconsideration was denied. Both parties appealed to the RTC. The RTC modified the MTCC order, directing the accused (petitioner) to pay the sums. Petitioner's motion for reconsideration was denied. The Court of Appeals affirmed the RTC's decision. The Petition: Petitioner sought review of the Court of Appeals' decision, raising the issue of whether he, as an officer of the corporation, is personally and civilly liable for the value of the two checks.
Issue(s)
Whether the Court of Appeals erred in upholding the RTC's ruling that petitioner, as an officer of the corporation, is personally and civilly liable to the private respondent for the value of the two checks. Whether petitioner can be considered an accommodation party for the dishonored checks.
Ruling
The petition is GRANTED. The Decision dated August 10, 2004 and the Resolution dated October 29, 2004 of the Court of Appeals in CA-G.R. CR No. 28464 are REVERSED and SET ASIDE. Criminal Case Nos. 52633-03 and 52634-03 are DISMISSED, without prejudice to the right of private respondent Auto Plus Traders, Inc., to file the proper civil action against Cruiser Bus Lines and Transport Corporation for the value of the two checks.
Ratio Decidendi
On the personal liability of the petitioner for corporate debts: The Supreme Court held that juridical entities have personalities separate and distinct from their officers. Generally, officers are not personally liable for corporate obligations except when the veil of corporate fiction is used as a cloak for fraud or illegality, or to work injustice. In this case, the evidence showed that Cruiser Bus Lines and Transport Corporation had the obligations for the tires, and there was no agreement for the petitioner to be personally liable. Therefore, he cannot be held liable for the value of the two checks issued for the corporation's obligation. On whether petitioner is an accommodation party: The Court reiterated the definition of an accommodation party under Section 29 of the Negotiable Instruments Law, requiring three requisites: (1) signing as a party to the instrument, (2) not receiving value therefor, and (3) signing for the purpose of lending his name or credit to some other person. While the first two elements were present as the check was drawn against petitioner's personal account and there was no indication he received value, the third requisite – the intent to lend his name or credit to the corporation – was not sufficiently proven. The check, dated December 15, 2000, corresponded to tires received by the corporation on August 29, 2000, but there was no showing of when the petitioner issued the check or in what capacity. Without concrete evidence, it cannot be assumed that he intended to lend his name to the corporation. Thus, he cannot be considered an accommodation party.
Main Doctrine
An officer of a corporation cannot be held personally liable for corporate debts evidenced by checks issued by the corporation, especially when acquitted of the criminal charges under Batas Pambansa Blg. 22, unless the veil of corporate fiction is pierced. Furthermore, to be considered an accommodation party, all three requisites must be present, including the intent to lend one's name or credit, which was not sufficiently proven in this case.