Pilipinas Shell v. Duque
REITERATIONFacts
The Antecedents: Pilipinas Shell Petroleum Corporation (PSPC) leased a building and subleased a portion to The Fitness Center (TFC). TFC assigned its rights and obligations to Fitness Consultants, Inc. (FCI). Respondents Carlos Duque and Teresa Duque were the proprietor and corporate secretary of FCI, respectively. FCI failed to pay rentals to PSPC and issued a check, signed by the respondents, to cover its obligations. The check was dishonored for "ACCOUNT CLOSED". Consequently, a criminal complaint for violation of Batas Pambansa Blg. 22 (BP 22) was filed against the respondents. Procedural History: The Metropolitan Trial Court (MeTC) found the respondents guilty of violating BP 22 and ordered them to pay a fine, subsidiary imprisonment, civil indemnity, interest, attorney's fees, and costs. The Regional Trial Court (RTC) acquitted the respondents of the criminal charge but maintained the civil indemnity. Upon motion for reconsideration, the RTC revived its earlier decision, holding respondents civilly liable. The Court of Appeals (CA) reversed the RTC's order, reinstating the order that acquitted the respondents and absolved them of civil liability, holding that upon acquittal, the civil liability of a corporate officer in a BP 22 case is extinguished with the criminal liability. The Petition: PSPC filed a petition for review on certiorari with the Supreme Court, arguing that the CA erred in absolving respondents from civil liability despite their acquittal, in relying on Gosiaco v. Ching, and in ruling that the obligation was a corporate debt.
Issue(s)
Whether respondents, as corporate officers, may still be held civilly liable despite their acquittal from the criminal charge of violation of Batas Pambansa Blg. 22. Whether the Court of Appeals erred in relying on Gosiaco v. Ching. Whether the Court of Appeals erred in ruling that the civil obligation covered by the dishonored checks were corporate debts for which only FCI should be held liable.
Ruling
The petition is denied. The Decision and Resolution of the Court of Appeals are affirmed.
Ratio Decidendi
On the issue of civil liability despite acquittal: The Court ruled in the negative. It reiterated the established jurisprudence that a corporate officer who issues a bouncing corporate check can only be held civilly liable when convicted of violating BP 22. The civil liability of a corporate officer in a BP 22 case is extinguished with the criminal liability upon acquittal. This rule applies regardless of whether the acquittal was based on reasonable doubt or if there was a pronouncement that the facts giving rise to civil liability did not exist. The Court emphasized that in this case, there was no evidence that the respondents personally or solidarily bound themselves for the corporate obligations, nor was there proof of fraud or misuse of the corporate veil. The check was drawn in the name of FCI for its corporate obligation, and respondents signed in their capacity as corporate officers. On the reliance on Gosiaco v. Ching: The Court affirmed the CA's reliance on Gosiaco v. Ching. In Gosiaco, the Supreme Court enunciated that the personal liability of a corporate officer is predicated on the principle that they cannot shield themselves from liability for their own acts by invoking the corporate entity, but this personal liability for violating BP 22 is predicated on conviction. The Court further cited Bautista v. Auto Plus Traders, Incorporated, et. al., which categorically held that the civil liability of a corporate officer in a BP 22 case is extinguished with the criminal liability. The present case aligns with this principle as the respondents were acquitted. On the nature of the obligation as a corporate debt: The Court agreed with the CA that the civil obligation covered by the dishonored checks were corporate debts. The records showed that FCI, through the respondents, incurred the obligation to PSPC. The check was drawn against FCI's account and was intended to cover FCI's obligations. There was no allegation or proof that the respondents agreed to be personally liable for FCI's debts or that the corporate fiction was used as a cloak for fraud. Therefore, FCI, as the corporation, should be held liable for its corporate debts, not the individual officers who acted within their corporate capacity.
Main Doctrine
The civil liability of a corporate officer for issuing a bouncing corporate check is extinguished with their criminal liability upon acquittal of the charge for violation of Batas Pambansa Blg. 22, absent any personal undertaking or piercing of the corporate veil.