G.R. No. 212885 July 17, 2019
SPOUSES NOLASCO FERNANDEZ and MARICRIS FERNANDEZ, Petitioners vs. SMART COMMUNICATIONS, INC., Respondent

FACTS

Smart Communications, Inc. (Smart) filed a collection suit against Everything Online, Inc. (EOL) and its directors, including petitioners Nolasco Fernandez (CEO) and Maricris Fernandez (Board Member), for unpaid cellular line charges exceeding ₱39 million. The obligation arose from service applications and undertakings signed by EOL’s president, which included a clause holding the president and all directors/officers solidarily liable for all charges. Nolasco signed a subsequent “EOL Undertaking” reaffirming this solidary liability clause. Maricris did not sign any document.
Petitioners moved to dismiss the complaint against them personally. The Regional Trial Court (RTC) granted the motion, ruling that the complaint failed to state a cause of action against them as individuals. The RTC held that corporate officers are not personally liable for corporate debts unless they allegedly acted with malice or bad faith. The Court of Appeals (CA) reversed the RTC, reinstating the complaint. The CA found that the specific contractual stipulation on solidary liability, to which Nolasco expressly agreed by signing, sufficiently alleged a cause of action against him. For Maricris, the CA ruled that the allegation of her being a director bound by the clause, while unsigned, required a trial to determine the validity and application of that stipulation to her.

ISSUE

Whether the Amended Complaint stated a valid cause of action against petitioners Nolasco and Maricris Fernandez to warrant the denial of their motion to dismiss.

RULING

Yes, the complaint sufficiently alleged a cause of action against both petitioners. A motion to dismiss based on failure to state a cause of action tests the legal sufficiency of the allegations in the complaint. The court assumes the pleaded facts to be true and determines if these facts entitle the plaintiff to any relief. The rule does not require the plaintiff to prove its case at this preliminary stage.
For Nolasco, the complaint explicitly alleged he signed the “EOL Undertaking,” whose Clause 9 stipulated the solidary liability of all directors and officers. His signature on the document containing the stipulation is a factual allegation that, if proven true, could establish his personal contractual commitment. This is sufficient to survive a motion to dismiss. For Maricris, while she did not sign, the complaint alleged she was a director and officer of EOL and was thus included under the same solidary liability clause. The validity and enforceability of such a clause against a non-signing director is a matter of defense and evidence best resolved during a full trial on the merits. The CA correctly held that dismissing the case against them at such an early stage was premature, as the factual issues surrounding the contract’s application and their individual liabilities required a presentation of evidence.