SECOND DIVISION
[G.R. No. 218071. September 6, 2017.]
HBD PARTNERS HOLDINGS, INC., petitionervs. MED CENTRAL, INC., DAVID M. SARMIENTO, WARREN DAVID A. SARMIENTO, AISSA AMOR A. SARMIENTO, HENRY F. SIA, JEROLD JOSEPHSON U. CAONES, ANTONIO S. CRUZ, JOHNNY PEREZ, and ZENO ZUÑIGA, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated 06 September 2017 which reads as follows:
"G.R. No. 218071: HBD PARTNERS HOLDINGS, INC., petitioner, v. MED CENTRAL, INC., DAVID M. SARMIENTO, WARREN DAVID A. SARMIENTO, AISSA AMOR A. SARMIENTO, HENRY F. SIA, JEROLD JOSEPHSON U. CAONES, ANTONIO S. CRUZ, JOHNNY PEREZ, and ZENO ZUÑIGA,respondents.
Before the Court is a petition for review 1 of the 18 November 2014 Decision 2 and the 29 April 2015 Resolution 3 of the Court of Appeals in CA-G.R. SP No. 127318, which modified the 20 December 2011 and 31 July 2012 Orders 4 of the Regional Trial Court of Quezon City, Branch 222, in Civil Case No. Q10-68134. The Court of Appeals dismissed the complaint against respondent Aissa Amor A. Sarmiento (Aissa) for being a mere representative of respondent Med Central, Inc. (MCI), and against respondents David M. Sarmiento (David), Warren David A. Sarmiento (Warren), Henry F. Sia (Henry), Jerold Josephson U. Caones (Jerold), Antonio S. Cruz (Antonio), Johnny Perez (Johnny), and Zeno Zuñiga (Zeno) for being mere stockholders of MCI.
The facts as narrated by the Court of Appeals are as follows:
Petitioner MCI is a domestic corporation which used to operate a medical clinic in Robinsons Galleria Mall in Ortigas, Quezon City. Respondent David is a stockholder, member of the board of directors and then President of MCI. Respondents Warren and Antonio are stockholders, members of the board of directors and elected Vice-Presidents of MCI. Respondents Henry and Jerold are stockholders and members of the board of directors of MCI, while respondents Johnny and Zeno are nominee stockholders of MCI.
In 2008, the owners and stockholders of MCI decided to sell their shares in the business along with the medical clinic and its equipment. In connection with the sale, Aissa was appointed by MCI as its attorney-in-fact to negotiate with potential buyers. One of those interested was Dr. Hernando Delizo (Delizo) who claimed to represent Healthcare Business Development Partners Holdings, Inc., which is a domestic corporation engaged in the business of "investing, purchase, or x x x acquisition of real and personal properties, including the acquisition of corporations, partnerships or other kind of business outfits, x x x, particularly in the field of health care and wellness, among others." 5 During the course of the negotiations, Aissa provided Healthcare with MCI's Statement of Revenues and Expenses for the year 2008 through electronic mail.
On 12 February 2009, a Memorandum of Agreement (MOA) 6 was entered into by and between Healthcare and MCI wherein both parties confirmed the purchase price for the sale of MCI at P15 million payable in four installments. Upon payment of the first installment on 13 February 2009, Delizo took possession and control of MCI's medical clinic and operated it. All the equipment were turned over to Delizo, who changed the name of the clinic to "Clinica Medcentral." Thereafter, Healthcare reneged on its obligation to pay the agreed installment payments. Of the entire obligation, only P3 million was paid to MCI. In 2010, Delizo requested for a renegotiation for the payment of the balance. The parties, however, failed to reach an agreement.
Meanwhile, as the lease on the premises occupied by Clinica Medcentral was about to expire, the stockholders of MCI pulled out all the equipment, vacated the premises, and returned the same to its original condition pursuant to the lease agreement with Robinsons Land Corporation. An inventory was conducted which revealed that some of the equipment turned over to Delizo were still in the latter's possession. The stockholders of MCI requested for a meeting with Delizo for an accounting of their mutual obligations, but the same did not materialize.
On 18 October 2010, HBD Partners Holdings, Inc. (HBD), through Delizo, filed a Complaint 7 against respondents for the issuance of a writ of preliminary attachment, confirmation of the alleged unilateral rescission of the MOA, and the return of the P3 million as partial payment for the purchase of MCI's business and shares.
In its Order of 26 November 2010, 8 the RTC granted the prayer for the issuance of a writ of preliminary attachment upon the payment of a bond of P3 million.
Respondents filed Motions to Dismiss on the ground of failure to state a cause of action since petitioner HBD is not a real party in interest. According to respondents, HBD is not a party to the MOA and HBD came into existence only a month after the execution of the MOA. Aissa filed a separate motion to dismiss alleging additionally that she is not a stockholder of MCI and does not have any interest in the MOA. Aissa merely represented MCI and its stockholders when she executed the MOA on their behalf. Johnny and Zeno jointly filed a separate motion to dismiss claiming additionally that they were not stockholders of MCI in their own right but merely nominee stockholders of Warren. The RTC denied the motions to dismiss. The motion for reconsideration was likewise denied.
On petition for certiorari, the Court of Appeals partially granted the petition for certiorari. The Court of Appeals dismissed the complaint against Aissa for being merely a representative of MCI; and against David, Warren, Henry, Jerold, Antonio, Johnny, and Zeno for being merely stockholders of MCI.
The Court of Appeals held that the MOA is a contract being the best evidence of the parties' intention. Thus, when the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon. The MOA laid down the reciprocal obligations of each party.
The Court of Appeals rejected MCI's claim that HBD is not a real party in interest to the case having no legal personality in the MOA due to the fact that it was only incorporated a month after the MOA was entered into. The Court of Appeals cited Merrill Lynch Futures, Inc. v. CA, 9 where the Court clarified that a party is estopped from challenging the personality of a corporation after having acknowledged the same by entering into a contract with it. Thus, by contracting with HBD and benefitting therefrom, MCI can no longer claim that HBD lacked the personality to enter into contracts. The contracting parties to the MOA are clearly MCI and HBD.
The Court of Appeals held that MCI and HBD, being corporations, have their own legal personality separate and distinct from those of their stockholders, directors, or officers. A stockholder is not answerable for the acts or liabilities of the corporation and vice versa. The MOA was explicit in stating that Aissa was merely representing MCI in the said agreement as an agent. No stockholder took part in the said agreement in their personal capacity. Thus, the RTC erred in not dismissing the complaint as against Aissa and the stockholders.
The dispositive portion of the Court of Appeals' decision reads:
WHEREFORE, in view of the foregoing, the petition is hereby PARTLY GRANTED. The Orders of the Regional Trial Court of Quezon City, Branch 222, dated December 20, 2011 and July 31, 2012, respectively, in Civil Case No. Q-10-68134 are MODIFIED as follows:
The Complaint is dismissed against the following parties:
1. Petitioner Aissa Amor A. Sarmiento for being merely a representative of petitioner-corporation MCI; and
2. Petitioners David M. Sarmiento, Warren David A. Sarmiento, Henry F. Sia, Jerold Josephson U. Caones, Antonio S. Cruz, Johnny Perez and Zeno Zuniga for being merely stockholders of petitioner-corporation MCI.
All others stand.
SO ORDERED. 10
In its 29 April 2015 Resolution, the Court of Appeals denied the Motion for Partial Reconsideration. Hence, this petition.
The issue is whether the Court of Appeals committed reversible error in dismissing the complaint against Aissa and the stockholders of MCI.
The petition is unmeritorious.
First, there is no dispute that HBD's cause of action is based on the MOA. HBD's complaint prays for, among others, the confirmation of the rescission of the MOA, and as a necessary consequence of such rescission, the return 11 of the P3 million as partial payment for the purchase of MCI's business.
The MOA was executed only by and between HBD and MCI. Clearly, only HBD and MCI are the parties to the MOA. The parties' respective rights and obligations arise out of the MOA, and are governed by its terms. Therefore, the persons who stand to be benefited or injured by the judgment in the suit — the real parties in interest — are the parties to the contract, 12 namely, HBD and MCI.
Section 2, Rule 3 of the Rules of Court defines a real party in interest, as follows:
Parties in interest. — A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest.
Aissa signed the MOA as a representative of MCI. Meanwhile, the respondent MCI stockholders are not parties to the MOA. Consequently, Aissa and the respondent stockholders are not real parties in interest in HBD's suit against MCI. Therefore, the complaint should be dismissed against them for failure to state a cause of action. If a suit is not brought in the name of or against the real party in interest, a motion to dismiss may be filed on the ground that the complaint states no cause of action. 13
Second, settled is the principle that a corporation has a personality separate and distinct from its officers and stockholders. The liability of the corporation is not the liability of the officers or stockholders, and vice-versa.
In Santos v. National Labor Relations Commission, 14 the Court held that "a corporation is a juridical entity with [a] legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it. The rule is that obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities." 15 Thus, in this case, respondent MCI stockholders cannot be made personally liable for obligations incurred by MCI under the MOA.
Meanwhile, Aissa was a mere agent or representative of MCI when she signed the MOA. There is no allegation in the complaint that Aissa expressly bound herself under the terms of the MOA. Neither is there any allegation that Aissa exceeded the limits of her authority. Hence, she is not liable on the MOA. Article 1897 of the Civil Code provides:
Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers.
Third, HBD's invocation of the piercing the veil doctrine is a mere afterthought since it was mentioned for the first time in HBD's motion for partial reconsideration 16 before the Court of Appeals. Significantly, the complaint is bereft of any clear allegation that the corporation was used as a vehicle for perpetrating fraud by the stockholders. The complaint failed to allege any specific acts of fraud carried out by Aissa and the stockholders. The allegations in the complaint pertain essentially to breaches of the MOA. It must be stressed that in all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated with particularity. 17 This HBD failed to do.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.
SO ORDERED."
Very truly yours,
MA. LOURDES C. PERFECTODivision Clerk of Court
By:
(SGD.) TERESITA AQUINO TUAZONDeputy Division Clerk of Court
Footnotes
1. Under Rule 45 of the Rules of Court.
2.Rollo, pp. 36-56. Penned by Associate Justice Stephen C. Cruz, with Associate Justices Magdangal M. De Leon and Eduardo B. Peralta, Jr. concurring.
3.Id. at 57-58.
4.Id. at 154, 227-228. Penned by Judge Edgar Dalmacio Santos.
5.Id. at 62.
6.Id. at 73-74.
7.Id. at 59-72.
8.Id. at 98-104.
9. 286 Phil. 988, 1004 (1992).
10.Rollo, pp. 55-56.
11.See Laperal v. Solid Homes, Inc., 499 Phil. 367 (2005).
12.See Spouses Oco v. Limbaring, 516 Phil. 691 (2006).
13.Strongworld Construction Corp. v. Perello, 528 Phil. 1080, 1095 (2006); Tankiko v. Cezar, 362 Phil. 184, 195 (1999), cited in Goco v. CA, G.R. No. 157449, 6 April 2010; Travel Wide Associated Sales (Phils.), Inc. v. CA, 276 Phil. 219, 224 (1991).
14. 325 Phil. 145, 156 (1996).
15.Id.; Francisco v. Mallen, 645 Phil. 369, 374 (2010).
16.Rollo, pp. 376-380.
17. Rules of Court, Rule 8, Section 5.