G.R. No. 126554 May 31, 2000
ARB CONSTRUCTION CO., INC. and MARK MOLINA, petitioners, vs. COURT OF APPEALS and TBS SECURITY AND INVESTIGATION AGENCY, represented by CECILIA R. BACLAY, respondents.

FACTS

Petitioner ARB Construction Co., Inc. (ARBC) entered into two one-year service contracts with respondent TBS Security and Investigation Agency (TBSS) for security services, effective August 15, 1993, with an automatic renewal clause. On February 23, 1994, ARBC, through its Vice President for Operations Mark Molina, sent a notice to terminate the contracts. TBSS objected, citing the contract term. Molina later conceded the contracts could not be preterminated but reduced the number of guards to one, invoking a contract clause allowing the client to decrease guard count with seven days’ notice. TBSS filed a complaint for preliminary injunction to enforce the contracts. Subsequently, TBSS moved for leave to file an amended and supplemental complaint, shifting the action to a sum of money and damages, alleging ARBC illegally deducted amounts from its payroll for alleged stolen equipment, leaving an outstanding obligation.
The Regional Trial Court granted the motion to amend the complaint. Petitioner Molina filed a motion to dismiss the amended complaint against him personally for lack of cause of action, which the trial court denied. The Court of Appeals affirmed both the grant of leave to amend and the denial of Molina’s motion to dismiss.

ISSUE

The issues are: (1) whether the trial court gravely abused its discretion in granting TBSS’s motion for leave to file an amended and supplemental complaint that allegedly changed the cause of action; and (2) whether the amended complaint stated a cause of action against Mark Molina personally.

RULING

The Supreme Court partially granted the petition. On the first issue, the Court held that the trial court did not commit grave abuse of discretion in allowing the amendment. Amendments to pleadings are favored and should be liberally allowed to determine the actual merits of the controversy. The amended complaint did not substantially alter the cause of action, as both the original and amended complaints were anchored on the same set of facts arising from the service contracts. The change from injunction to a money claim was a shift in the relief sought, not in the foundational facts or the theory of liability for breach of contract. Thus, the appellate court correctly affirmed the trial court’s order.
On the second issue, the Court ruled that the amended complaint failed to state a cause of action against Mark Molina in his personal capacity. Molina was sued solely in his official capacity as Vice President of ARBC. A corporate officer is not personally liable for corporate obligations unless he acted with malice or bad faith. The allegations in the complaint did not impute any independent wrongful act or bad faith to Molina separate from his official actions. His acts, such as sending termination notices and implementing guard reductions, were performed in his corporate capacity. Therefore, the trial court and the Court of Appeals erred in not dismissing the case against him. The orders against Molina were reversed and set aside.