GR 119053; (January, 1997) (Digest)
G.R. No. 119053. January 23, 1997. FLORENTINO ATILLO III, petitioner, vs. COURT OF APPEALS, AMANCOR, INC. and MICHELL LHUILLIER, respondents.
FACTS
Petitioner Florentino Atillo III and respondent Michell Lhuillier were major shareholders of respondent corporation Amancor, Inc. They executed a Supplemental Memorandum of Agreement wherein Atillo agreed to dispose of certain properties to prepay a P300,000.00 corporate mortgage loan. The agreement stipulated that Amancor would pay Atillo interest equivalent to the prevailing bank rate while unable to repay him. Atillo paid the loan, and after offsetting mutual accounts, a balance of P199,888.89 remained due from Amancor.
Atillo filed a collection suit against both Amancor and Lhuillier. During pre-trial, the parties admitted the genuineness of their agreements and the amount due. The key issues submitted for resolution were whether Lhuillier was personally liable and the applicable interest rate. The trial court ordered only Amancor to pay, absolving Lhuillier. The Court of Appeals affirmed, prompting Atillo’s appeal to the Supreme Court.
ISSUE
Whether respondent Michell Lhuillier is personally liable for the corporate obligation to petitioner Florentino Atillo III.
RULING
The Supreme Court denied the petition and affirmed the appellate court’s decision, holding that Lhuillier incurred no personal liability. The Court clarified that a judicial admission must be clear, deliberate, and unequivocal. Lhuillier’s statements in his Answer, when read in full context, did not constitute an admission of personal liability for the debt. He consistently maintained that his dealings were in his capacity as a corporate officer and that the corporation itself incurred the obligation to repay Atillo.
The legal logic rests on the principle of separate corporate personality. The obligation to repay Atillo arose from the Supplemental Agreement, which was intended to address a corporate loan. Lhuillier signed as an agent of the corporation. There was no express stipulation in the agreements making him personally and solidarily liable with Amancor. Furthermore, the Court found no grounds to pierce the corporate veil, as there was no evidence that the corporation was used as a cloak for fraud, illegality, or to work an injustice. Absent such evidence, a corporate officer is not personally liable for corporate debts. The factual findings of the lower courts, which concluded Lhuillier acted only in a corporate capacity, are binding and conclusive.