G.R. No. 268176 , October 25, 2023
INVICTUS FOOD PRODUCTS CORPORATION, ROMULO H. ESPIRITU, MA. ROWENA E. MANALOTO, JAYSON ROMELL M. ESPIRITU, AND SHARA LEE R. ESPIRITU, PETITIONERS, VS. SANDPIPER SPICES & CONDIMENTS CORP., RESPONDENT.

FACTS

Respondent Sandpiper Spices & Condiments Corporation (Sandpiper), distributor of the Mama Sita’s brand, executed a Distribution Agreement on March 18, 2009, with New RBW Marketing, Inc. (RBW) for exclusive distribution in Northern Luzon. The agreement contained a non-compete clause (Section 37) prohibiting RBW from promoting, selling, or distributing competing products during the agreement and for three years after its termination, and a non-hire clause (Section 51) prohibiting either party from hiring the other’s employee for 12 months post-employment. The agreement was renewed annually until its termination on July 31, 2014. Sandpiper later discovered that RBW was distributing competing products under the brand Lola Pacita, which was manufactured by Invictus Food Products Corporation (Invictus). Sandpiper alleged that RBW and Invictus were controlled by the same individuals, the Espiritus (petitioners Romulo H. Espiritu, Ma. Rowena E. Manaloto, Jayson Romell M. Espiritu, and Shara Lee R. Espiritu), and that Invictus had hired Sandpiper’s former research and development specialist, Laurence Marvin E. Quines, in violation of the non-hire clause. Sandpiper filed a Complaint for Breach of Contract and Damages against RBW, Invictus, the Espiritus, and Quines, and applied for a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction (WPI), which were granted by the Regional Trial Court (RTC). After pre-trial, Sandpiper filed a Motion for Partial Summary Judgment. The RTC granted the motion, rendering a summary judgment finding all defendants in breach of Sections 37 and 51 of the Distribution Agreement and liable for damages, and making the preliminary injunction permanent. The defendants filed a Petition for Certiorari under Rule 65 before the Court of Appeals (CA), which was dismissed. The CA held that certiorari was not the proper remedy and that the RTC did not commit grave abuse of discretion. Petitioners Invictus and the Espiritus filed the present Petition for Review on Certiorari.

ISSUE

Whether the Court of Appeals erred in dismissing the Petition for Certiorari and in affirming the RTC’s Order granting partial summary judgment, which found petitioners liable for breach of contract and pierced the corporate veil of RBW and Invictus.

RULING

The Supreme Court denied the petition and affirmed the CA’s Decision and Resolution. The Court held that a petition for certiorari under Rule 65 was not the proper remedy to assail the RTC’s partial summary judgment, as the said judgment was an interlocutory order that did not completely dispose of the case, leaving the determination of the actual amount of damages for further proceedings. An interlocutory order is not appealable but may be subject to certiorari only if issued with grave abuse of discretion. The Court found that the RTC did not commit grave abuse of discretion in rendering the summary judgment. The RTC based its decision on the evidence presented during the summary hearings for the TRO and WPI and the pre-trial briefs, where the defendants failed to specifically address the material issues and merely raised general denials and the defense of separate corporate personality. The RTC correctly found no genuine issue as to the defendants’ breach of the non-compete and non-hire clauses. The Court also upheld the piercing of the corporate veil, noting the judicial admissions of Romulo Espiritu and the common control and identity of business between RBW and Invictus, which were used to circumvent contractual obligations. The proper remedy from the partial summary judgment was an ordinary appeal under Rule 41 after a final judgment disposing of the entire case. Since the petitioners availed of the wrong remedy, the CA correctly dismissed their petition.