G.R. No. 186433; November 27, 2013
NUCCIO SAVERIO and NS INTERNATIONAL INC., Petitioners, vs. ALFONSO G. PUYAT, Respondent.

FACTS

On July 22, 1996, respondent Alfonso G. Puyat extended a loan to petitioner NS International, Inc. (NSI) pursuant to a Memorandum of Agreement and Promissory Note, with petitioner Nuccio Saverio representing NSI. The credit line had a limit of ₱500,000.00, payable within 30 days, with an interest rate of 17% per annum (adjustable to 25% if payment was delayed). Petitioners received ₱300,000.00 in cash and certain machineries for a fertilizer processing plant business that ultimately failed to materialize. Nuccio Saverio made personal payments totaling ₱600,000.00. As of December 16, 1999, respondent claimed an outstanding balance of ₱460,505.86. Upon petitioners’ default, respondent filed a collection suit. Petitioners contended the loan had been paid, evidenced by the receipt for ₱600,000.00, and argued that any obligation for the machineries was extinguished by the business failure. They further claimed the claimed amount was inaccurate, the interest and penalty unconscionable, and an independent accounting was necessary.
The Regional Trial Court (RTC) ruled that the payment did not extinguish the obligation, which included the machineries’ value. It applied the doctrine of piercing the corporate veil, finding Nuccio Saverio and NSI to be one and the same, and held them jointly and severally liable for ₱460,505.86 with 12% interest and attorney’s fees. The Court of Appeals affirmed the RTC decision.

ISSUE

Whether the Court of Appeals committed a reversible error in affirming the RTC’s decision holding the petitioners jointly and severally liable for the amount claimed.

RULING

The Supreme Court GRANTED the petition. It held that while the fact of indebtedness was undisputed, the exact amount of the liability was not determined with certainty. The evidentiary basis for the award—primarily the “Breakdown of Account”—was deemed insufficient as the person who prepared it was not presented to authenticate it, and supporting documents for the alleged additional expenses were lacking. Although the petition raised factual issues, which are generally not reviewable in a Rule 45 proceeding, the Court exercised its exception-taking power as the findings of the lower courts were based on a misapprehension of facts and the evidence on record was insufficient to support their conclusions. Consequently, the case was REMANDED to the RTC for proper accounting and reception of evidence to determine the actual amount of petitioner NS International, Inc.’s indebtedness. The Court did not make a definitive ruling on the propriety of piercing the corporate veil, as the primary need was for an accurate determination of the debt. The decisions of the Court of Appeals and the RTC were REVERSED AND SET ASIDE for the purpose of the remand.