GR 158086; (February, 2008) (Digest)
G.R. No. 158086 ; February 14, 2008
ASJ CORPORATION and ANTONIO SAN JUAN, petitioners, vs. SPS. EFREN & MAURA EVANGELISTA, respondents.
FACTS
Respondents, operating as R.M. Sy Chicks, engaged the hatchery services of petitioner ASJ Corporation, a family-owned corporation, for incubating broiler eggs. They delivered eggs and would later collect the hatched chicks and by-products, paying a service fee per egg. A practice developed where payment delays were tolerated, with balances carried over. From January to February 1993, respondents delivered 101,350 eggs under Setting Reports Nos. 108 to 113. When they attempted to collect the output, petitioner Antonio San Juan, representing ASJ Corp., refused release due to unpaid accrued service fees from prior deliveries. Despite respondents making partial payments, San Juan insisted on full settlement, accompanied by threats to impound their vehicle and detain them if they returned without full payment. Fearing these threats, respondents ceased collection attempts.
ISSUE
The core issues were: (1) Whether petitioners were justified in retaining the chicks and by-products due to unpaid prior accounts; and (2) Whether the corporate veil of ASJ Corp. should be pierced to hold Antonio San Juan solidarily liable.
RULING
The Supreme Court affirmed the lower courts’ decisions, ruling against the petitioners. On the first issue, the retention was unjustified. The obligation for each setting report was separate and distinct. Petitioners’ claim of a running balance did not create a single, indivisible obligation. By accepting the new deliveries (Setting Reports Nos. 108-113), petitioners were bound to return the hatched output thereof. Their right to collect unpaid fees for prior deliveries was separate and should have been pursued independently, not through the improper retention of the goods from the new, distinct transactions. The act of withholding the chicks constituted mora accipiendi (delay on the part of the creditor to accept delivery) for those specific contracts.
On the second issue, the Court upheld the application of the doctrine of piercing the corporate veil. The evidence showed ASJ Corp. was merely an alter ego of Antonio San Juan. The corporation was family-owned, and San Juan exercised sole control, treating corporate assets as his own. His personal intervention in the contract disputes, including making threats, demonstrated the absence of a bona fide separate corporate identity. Where the corporation is used as a cloak for fraud or to justify a wrong, as in this case of unjust retention, the separate juridical personality may be disregarded. Thus, San Juan and ASJ Corp. were correctly held solidarily liable for the actual damages (value of the withheld chicks and by-products), moral damages, exemplary damages, and attorney’s fees awarded to the respondents.