SALVADOR O. BOOC, complainant, vs. MALAYO B.
BANTUAS, SHERIFF
IV, RTC, BRANCH 3, ILIGAN CITY, respondent.
RESOLUTION
DE LEON, JR., J.:
An affidavit-complaint dated August 31, 1999 was filed before the Office of the
Court Administrator (OCA) by Salvador Booc charging Malayo B. Bantuas, Sheriff
IV of the Regional Trial Court (RTC), Branch 3, Iligan City with Gross Ignorance of
the Law and Grave Abuse of Authority relative to Civil Case No. 1718 entitled, Felipe
G. Javier, Jr. vs. Rufino Booc.
Complainant is the President of five Star Marketing Corporation. On August 22,
1994 herein respondent Sheriff Malayo B. Bantuas, pursuant to a Writ of Execution
issued in Civil Case No. 1718 filed a Notice of Levy with the Register of Deeds,
Iligan City over a parcel of land covered by TCT No. T-19209 and owned by Five
Star Marketing Corporation. Complainant alleged that respondent sheriff, at the
instance of plaintiff, former Judge Felipe Javier, proceeded to file the Notice of Levy
despite respondent sheriffs knowledge that the property is owned by the corporation
which was not a party to the civil case.
On July 31, 1995, the corporation through the complainant reiterated to
respondent sheriff that it was the owner of the property and Rufino Booc had no share
or interest in the corporation. Hence, the corporation demanded that respondent sheriff
cancel the notice of levy, otherwise the corporation would take the appropriate legal
steps to protect its interest.
Respondent sheriff, however, did not heed the corporations demand inasmuch as
on August 20, 1999 the corporation received a Notice of Sale on Execution of Real
Property, dated August 11, 1999, covering the subject property. Respondent sheriff
scheduled the public auction on August 31, 1999. Consequently, the corporation, to
protect its rights and interests, was compelled to file an action for Quieting of Title
with the RTC, Branch 4 of Iligan City.
Respondent sheriff, in his answer to the complaint filed against him before the
OCA, said that he filed a Notice of Levy with the Register of Deeds of Iligan City on
the share, rights, interest and participation of Rufino Booc in the parcel of land owned
by Five Star Marketing Corporation. Respondent sheriff claimed that Rufino Booc is
the owner of around 200 shares of stock in said corporation according to a document
issued by the Securities and Exchange Commission.
Respondent sheriff stressed that the levy was made on the share, rights and/or
interest and participation which Rufino Booc, as president and stockholder, may have
in the parcel of land owned by Five Star Marketing Corporation. Claiming that he was
only acting pursuant to his duties as sheriff, respondent cited Section 15, Rule 39 of
the Rules of Court which states that
x x x The officer must enforce an execution of a money judgment by levying on all the
property, real and personal of every name and nature whatsoever, and which may be
disposed of for value of the judgment debtor not exempt from execution.
Real property stocks, shares, debts, credits, and other personal property, or any
interest in either real or personal property, may be levied upon in like manner and
with like effect as under a writ of execution.
Respondent sheriff said that while complainant Salvador Booc made a demand for
the cancellation of levy made, the former deemed it wise to have the judgment
satisfied in accordance with Section 39 of the Rules of Court. Respondent sheriff
added that the trial court where the case for Quieting of Title filed by the corporation
was pending ordered the auction sale of the shares of stock of Rufino Booc. The
corporation allegedly never questioned said order of the RTC.
Finally, respondent sheriff averred that the corporation is merely a dummy of
Rufino Booc and his brother Sheikding Booc. Respondnet sheriff submitted as an
exhibit an affidavit executed by Sheikding Booc wherein the latter admitted that when
Judge Felipe Javier won in the civil case against Rufino Booc, the latter simulated a
transfer of his shares of stock in Five Star Marketing Corporation so that the property
may not be levied upon.[1]
Complainant, in his reply to respondent sheriffs comment belied the latters
allegation that the corporation never questioned the auction sale. Complainant averred
that contrary to the respondent sheriffs assertion, the trial court in fact issued a
restraining order which was withdrawn after plaintiffs counsel manifested that the
respondent sheriff would only auction Rufino Boocs shares of stock in the corporation
and not the subject property.
The OCA found respondent sheriff liable for the charges filed against him, stating
that respondent sheriff acted in bad faith when he auctioned the subject property
inasmuch as Judge Mangotara had already warned him that the public auction should
pertain only to shares of stock owned by Rufino Booc in Five Star Marketing
Corporation. Respondent sheriff, however, in violation of the order issued by Judge
Mangotara and in disregard of the manifestation filed by plaintiffs counsel that the
sale should involve only the shares of stock, proceeded to auction the subject
property. The OCA, thus, made the recommendation that:
1) The instant case be RE-DOCKETED as a regular administrative matter; and
2) Respondent Sheriff Malayo B. Bantuas be FINED in the amount of Ten Thousand Pesos
(P10,000.00) for conducting the auction sale in violation of the terms of the order issued by
Acting Presiding Judge Mamindiara P. Mangotara with a STERN WARNING that a
commission of the same or similar acts in the future shall be dealt with more severely.
A careful scrutiny of the records shows that respondent sheriff, in filing a notice
of levy on the subject property as well as in the certificate of sale, did not fail to
mention that what was being levied upon and sold was whatever shares, rights,
interests and participation Rufino Booc, as president and stockholder in Five Star
Marketing Corporation may have on subject property. Respondent sheriff, however,
overstepped his authority when he disregarded the distinct and separate personality of
the corporation from that of Rufino Booc as stockholder of the corporation by levying
on the property of the corporation.Respondent sheriff should not have made the levy
based on mere conjecture that since Rufino Booc is a stockholder and officer of the
corporation, then he might have an interest or share in the subject property.
It is settled that a corporation is clothed with a personality separate and distinct
from that of its stockholders. It may not be held liable for the personal indebtedness of
its stockholders. In the case of Del Rosario vs. Bascar, Jr.,[2] we imposed the fine of
P5,000.00 on respondent sheriff Bascar for allocating unto himself the power of the
court to pierce the veil of corporate entity and improvidently assuming that since
complainant Esperanza del Rosario is the treasurer of Miradel Development
Corporation, they are one and the same. In the said case we reiterated the principle
that the mere fact that one is a president of the corporation does not render the
property he owns or possesses the property of the corporation since the president, as
an individual, and the corporation are separate entities.
Based on the foregoing, respondent Sheriff Bantuas has clearly acted beyond his
authority when he levied the property of Five Star Marketing Corporation. The fact,
however, that respondent sheriff, in levying said property, had stated in the notice of
levy as well as in the certificate of sale that what was being levied upon and sold was
whatever rights, shares interest and/or participation Rufino Booc, as stockholder and
president in the corporation, may have on the subject property, shows that respondent
sheriffs conduct was impelled partly by ignorance of Corporation Law and partly by
mere overzealousness to comply with his duties and not by bad faith or blatant
disregard of the trial courts order. Hence, we deem that the penalty of a fine of Five
Thousand Pesos (P5,000.00) to be imposed on respondent sheriff would suffice.
WHEREFORE, respondent Malayo B. Bantuas, Sheriff IV of the RTC of Iligan
City , Branch 3, is hereby FINED in the sum of Five Thousand Pesos (P5,000.00)
with the STERN WARNING that a repetition of the same or similar acts in the future
will be dealt with more severely.
SO ORDERED.
CLAUDE P. BAUTISTA, G.R. No. 166405
Petitioner,
Present:
QUISUMBING, J., Chairperson,
PUNO, C.J.,*
- versus - TINGA,
VELASCO, JR., and
BRION, JJ.
AUTO PLUS TRADERS, Promulgated:
INCORPORATED and COURT OF
APPEALS (Twenty-First Division), August 6, 2008
Respondents.
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DECISION
QUISUMBING, J.:
This petition for review on certiorari assails the Decision [1] dated August 10,
2004 of the Court of Appeals in CA-G.R. CR No. 28464 and the
Resolution[2] dated October 29, 2004, which denied petitioners motion for
reconsideration. The Court of Appeals affirmed the February 24, 2004 Decision
and May 11, 2004 Order of the Regional Trial Court (RTC), Davao City, Branch
16, in Criminal Case Nos. 52633-03 and 52634-03.
The antecedent facts are as follows:
Petitioner Claude P. Bautista, in his capacity as President and Presiding
Officer of Cruiser Bus Lines and Transport Corporation, purchased various spare
parts from private respondent Auto Plus Traders, Inc. and issued two postdated
checks to cover his purchases. The checks were subsequently dishonored. Private
respondent then executed an affidavit-complaint for violation of Batas
Pambansa Blg. 22[3] against petitioner. Consequently, two Informations for
violation of BP Blg. 22 were filed with the Municipal Trial Court in Cities
(MTCC) of Davao City against the petitioner. These were docketed as Criminal
Case Nos. 102,004-B-2001 and 102,005-B-2001. The Informations[4] read:
Criminal Case No. 102,004-B-2001:
The undersigned accuses the above-named accused for violation
of Batas Pambansa Bilang 22, committed as follows:
That on or about December 15, 2000, in the City of Davao,
Philippines, and within the jurisdiction of this Honorable Court, the
above-mentioned accused, knowing fully well that he had no sufficient
funds and/or credit with the drawee bank, wilfully, unlawfully and
feloniously issued and made out Rural Bank of Digos, Inc. Check No.
058832, dated December 15, 2000, in the amount of P151,200.00, in
favor of Auto Plus Traders, Inc., but when said check was presented to
the drawee bank for encashment, the same was dishonored for the reason
DRAWN AGAINST INSUFFICIENT FUNDS and despite notice of
dishonor and demands upon said accused to make good the check,
accused failed and refused to make payment to the damage and prejudice
of herein complainant.
CONTRARY TO LAW.
Criminal Case No. 102,005-B-2001:
The undersigned accuses the above-named accused for violation
of Batas Pambansa Bilang 22, committed as follows:
That on or about October 30, 2000, in the City of Davao,
Philippines, and within the jurisdiction of this Honorable Court, the
above-mentioned accused, knowing fully well that he had no sufficient
funds and/or credit with the drawee bank, wilfully, unlawfully and
feloniously issued and made out Rural Bank of Digos, Inc. Check No.
059049, dated October 30, 2000, in the amount of P97,500.00, in favor
of Auto Plus Traders, [Inc.], but when said check was presented to the
drawee bank for encashment, the same was dishonored for the reason
DRAWN AGAINST INSUFFICIENT FUNDS and despite notice of
dishonor and demands upon said accused to make good the check,
accused failed and refused to make payment, to the damage and
prejudice of herein complainant.
CONTRARY TO LAW.
Petitioner pleaded not guilty. Trial on the merits ensued. After the
presentation of the prosecutions evidence, petitioner filed a demurrer to
evidence. On April 21, 2003, the MTCC granted the demurrer, thus:
WHEREFORE, the demurrer to evidence is granted, premised on
reasonable doubt as to the guilt of the accused. Cruiser Bus Line[s] and
Transport Corporation, through the accused is directed to pay the
complainant the sum of P248,700.00 representing the value of the two
checks, with interest at the rate of 12% per annum to be computed from
the time of the filing of these cases in Court, until the account is paid in
full; ordering further Cruiser Bus Line[s] and Transport Corporation,
through the accused, to reimburse complainant the expense representing
filing fees amounting to P1,780.00 and costs of litigation which this
Court hereby fixed at P5,000.00.
SO ORDERED.[5]
Petitioner moved for partial reconsideration but his motion was
denied. Thereafter, both parties appealed to the RTC. On February 24, 2004, the
trial court ruled:
WHEREFORE, the assailed Order dated April 21, 2003 is hereby
MODIFIED to read as follows: Accused is directed to pay and/or
reimburse the complainant the following sums: (1) P248,700.00
representing the value of the two checks, with interest at the rate of 12%
per annum to be computed from the time of the filing of these cases in
Court, until the account is paid in full; (2) P1,780.00 for filing fees
and P5,000.00 as cost of litigation.
SO ORDERED.[6]
Petitioner moved for reconsideration, but his motion was denied on May 11,
2004. Petitioner elevated the case to the Court of Appeals, which affirmed the
February 24, 2004 Decision and May 11, 2004 Order of the RTC:
WHEREFORE, premises considered, the instant petition
is DENIED. The assailed Decision of the Regional Trial Court, Branch
16, Davao City, dated February 24, 2004 and its Order dated May 11,
2004 are AFFIRMED.
SO ORDERED.[7]
Petitioner now comes before us, raising the sole issue of whether the Court of
Appeals erred in upholding the RTCs 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.[8]
Petitioner asserts that BP Blg. 22 merely pertains to the criminal liability of
the accused and that the corporation, which has a separate personality from its
officers, is solely liable for the value of the two checks.
Private respondent counters that petitioner should be held personally liable
for both checks. Private respondent alleged that petitioner issued two postdated
checks: a personal check in his name for the amount of P151,200 and a corporation
check under the account of Cruiser Bus Lines and Transport Corporation for the
amount of P97,500.According to private respondent, petitioner, by issuing his
check to cover the obligation of the corporation, became an accommodation
party. Under Section 29[9] of the Negotiable Instruments Law, an accommodation
party is liable on the instrument to a holder for value. Private respondent adds that
petitioner should also be liable for the value of the corporation check because
instituting another civil action against the corporation would result in multiplicity
of suits and delay.
At the outset, we note that private respondents allegation that petitioner
issued a personal check disputes the factual findings of the MTCC. The MTCC
found that the two checks belong to Cruiser Bus Lines and Transport Corporation
while the RTC found that one of the checks was a personal check of the
petitioner. Generally this Court, in a petition for review on certiorari under Rule 45
of the Rules of Court, has no jurisdiction over questions of facts. But, considering
that the findings of the MTCC and the RTC are at variance, [10] we are compelled to
settle this issue.
A perusal of the two check return slips[11] in conjunction with the Current
Account Statements[12] would show that the check for P151,200 was drawn against
the current account of Claude Bautista while the check for P97,500 was drawn
against the current account of Cruiser Bus Lines and Transport
Corporation. Hence, we sustain the factual finding of the RTC.
Nonetheless, we find the appellate court in error for affirming the decision of
the RTC holding petitioner liable for the value of the checks considering that
petitioner was acquitted of the crime charged and that the debts are clearly
corporate debts for which only Cruiser Bus Lines and Transport Corporation
should be held liable.
Juridical entities have personalities separate and distinct from its officers and
the persons composing it.[13] Generally, the stockholders and officers are not
personally liable for the obligations of the corporation except only when the veil of
corporate fiction is being used as a cloak or cover for fraud or illegality, or to work
injustice.[14] These situations, however, do not exist in this case. The evidence
shows that it is Cruiser Bus Lines and Transport Corporation that has obligations to
Auto Plus Traders, Inc. for tires.There is no agreement that petitioner shall be held
liable for the corporations obligations in his personal capacity. Hence, he cannot be
held liable for the value of the two checks issued in payment for the corporations
obligation in the total amount of P248,700.
Likewise, contrary to private respondents contentions, petitioner cannot be
considered liable as an accommodation party for Check No. 58832. Section 29 of
the Negotiable Instruments Law defines an accommodation party as a person who
has signed the instrument as maker, drawer, acceptor, or indorser, without
receiving value therefor, and for the purpose of lending his name to some other
person. As gleaned from the text, an accommodation party is one who meets all the
three requisites, viz: (1) he must be a party to the instrument, signing as maker,
drawer, acceptor, or indorser; (2) he must not receive value therefor; and (3) he
must sign for the purpose of lending his name or credit to some other person.
[15]
An accommodation party lends his name to enable the accommodated party to
obtain credit or to raise money; he receives no part of the consideration for the
instrument but assumes liability to the other party/ies thereto.[16] The first two
elements are present here, however there is insufficient evidence presented in the
instant case to show the presence of the third requisite. All that the evidence shows
is that petitioner signed Check No. 58832, which is drawn against his personal
account. The said check, dated December 15, 2000, corresponds to the value of 24
sets of tires received by Cruiser Bus Lines and Transport Corporation on August
29, 2000.[17] There is no showing of when petitioner issued the check and in what
capacity. In the absence of concrete evidence it cannot just be assumed that
petitioner intended to lend his name to the corporation.Hence, petitioner cannot be
considered as an accommodation party.
Cruiser Bus Lines and Transport Corporation, however, remains liable for the
checks especially since there is no evidence that the debts covered by the subject
checks have been paid.
WHEREFORE, 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.
No pronouncement as to costs.
SO ORDERED.
