Solid Bank Corp. v. Mindanao Ferroalloy Corp.
SOLIDBANK CORPORATION, Petitioners,
MINDANAO FERROALLOY CORPORATION, Spouses JONG-WON HONG and SOO-OK KIM HONG, TERESITA CU, and RICARDO P. GUEVARA and Spouse, respondents.
G.R. No. 153535
July 28, 2005
It is axiomatic that solidary liability cannot be lightly inferred. Under Article 1207 of the Civil Code, “there is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity.”
Private respondents herein secured a loan to the petitioner bank under the name of the respondent corporation. In the course of the corporations operation, it was not able to pay its obligation to the petitioner and has to stop its operation. Petitioner bank filed an action against the corporation together with its principal officers for the collection of the loan they acquired. The RTC ruled in favor of the bank petitioner and ordering the respondent corporation to pay the amount of loan plus interest. On appeal, the CA held the decision of the RTC and ruled also that the private respondents were not solidary liable to the petitioner.
Whether or not principal officers can be held personally liable upon signing the contract of loan under the name of the corporation?
Basic is the principle that a corporation is vested by law with a personality separate and distinct from that of each person composing or representing it. Equally fundamental is the general rule that corporate officers cannot be held personally liable for the consequences of their acts, for as long as these are for and on behalf of the corporation, within the scope of their authority and in good faith. The separate corporate personality is a shield against the personal liability of corporate officers, whose acts are properly attributed to the corporation. Moreover, it is axiomatic that solidary liability cannot be lightly inferred. Since solidary liability is not clearly expressed in the Promissory Note and is not required by law or the nature of the obligation in this case, no conclusion of solidary liability can be made. Furthermore, nothing supports the alleged joint liability of the individual petitioners because, as correctly pointed out by the two lower courts, the evidence shows that there is only one debtor: the corporation.
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