G.R. No. 82558 August 20, 1990
WESTERN AGRO INDUSTRIAL CORPORATION and ANTONIO RODRIGUEZ, petitioners, vs. HON. COURT OF APPEALS and SIA’S AUTOMOTIVE AND DIESEL PARTS, INC., respondents.

FACTS

Respondent SIA’s Automotive and Diesel Parts, Inc. filed a complaint for sum of money against petitioners Western Agro Industrial Corporation (WESGRO) and its officer, Antonio Rodriguez. The complaint alleged that Rodriguez, representing WESGRO, purchased automotive parts on credit from 1980 to 1982, incurring an unpaid obligation. Rodriguez moved to dismiss, arguing he acted in a corporate capacity and thus no cause of action existed against him personally. The trial court denied his motion, a decision affirmed by the then Intermediate Appellate Court.
During pre-trial, an order was issued stating WESGRO admitted liability for approximately P85,000, later amended to P84,626.70. At the hearing, petitioners’ counsel clarified that only WESGRO, not Rodriguez, admitted liability. Respondent presented its evidence, while petitioners opted not to present any, filing a memorandum instead. The trial court rendered a decision holding both petitioners jointly and severally liable. The Court of Appeals affirmed this decision.

ISSUE

The issues are: (1) whether the petitioners are bound by the pre-trial order; and (2) whether Antonio Rodriguez can be held solidarily liable with the corporation for its debts.

RULING

On the first issue, the Supreme Court held that petitioners are bound by the pre-trial order. While notice of such an order is crucial for due process, the petitioners actively participated in the proceedings that followed its issuance. During the initial hearing, their counsel moved to amend the order to reflect that only WESGRO admitted liability, demonstrating their awareness and acceptance of its contents. By subsequently choosing not to present evidence, they effectively submitted the case for decision based on the stipulated facts. Their conduct estopped them from later disclaiming the order’s binding effect.
On the second issue, the Court ruled that Rodriguez cannot be held solidarily liable. A corporation possesses a legal personality separate and distinct from its shareholders and officers. Corporate acts, such as entering into purchase contracts, are performed through its agents, but the liability attaches to the corporation itself, not the individual agent, provided the agent acted within authorized limits. The doctrine of piercing the corporate veil applies only in exceptional cases, such as when the corporate fiction is used to defraud, justify wrong, or evade an obligation. The respondent failed to allege or prove any such circumstance—like fraud, illegality, or a clear misuse of the corporate form—that would justify disregarding WESGRO’s separate identity and holding Rodriguez personally liable. Since he acted as an authorized corporate officer, his acts were corporate acts, and only the corporation should answer for the resulting obligation.
The petition was partly granted. The Court of Appeals’ decision was modified by absolving Antonio Rodriguez from personal liability. The monetary award stands solely against WESGRO.