G.R. No. 86792 March 21, 1990
SPOUSES MARINO AND LINA JOEL SAPUGAY, petitioners, vs. HON. COURT OF APPEALS, MOBIL PHILIPPINES, INC. AND RICARDO CARDENAS, respondents.

FACTS

Petitioners, the Sapugay spouses, applied for a dealership with Mobil Philippines, Inc. Pending approval, Mobil loaned them equipment valued at P1.5 million for installation at their Batangas premises. The spouses allege that after signing a preliminary agreement and commencing operations, Mobil, through its manager Ricardo Cardenas, imposed a condition for a surety bond, initially P200,000 then raised to P700,000. They further claimed Mobil withheld the formal dealership agreement, preventing them from securing the bond, as a pretense to award the dealership to another party. Mobil eventually repossessed the equipment via a writ of replevin.
The Regional Trial Court ruled in favor of the Sapugays, finding Mobil and Cardenas acted in bad faith. It awarded the spouses various damages, including pre-operation expenses, rental and guarding fees for the equipment, unrealized profits, and moral damages. The Court of Appeals modified this decision by deleting the awards for rental, storage, guarding fees, and unrealized profits, and exonerated Cardenas from personal liability, holding only Mobil Philippines, Inc. liable.

ISSUE

The primary issues were whether the Court of Appeals erred in: (1) deleting the awards for rental, storage, guarding fees, and unrealized profits; and (2) exonerating respondent Ricardo Cardenas from liability.

RULING

The Supreme Court reversed the Court of Appeals on both points. On the first issue, the Court reinstated the awards for rental, storage, and guarding fees. The legal logic is that these expenses were a direct and necessary consequence of Mobil’s act of leaving its heavy equipment on the Sapugays’ property after the failed dealership. The Sapugays, as possessors, were compelled to incur these costs to secure the property, and Mobil, whose bad faith led to the situation, was liable to reimburse them. However, the award for unrealized profits was correctly deleted, as such profits are inherently speculative and not capable of credible computation, failing the requirement for actual and demonstrable proof of damages.
On the second issue, the Court held Cardenas jointly and severally liable with Mobil. The legal basis is that a corporate officer can be held personally accountable for acts done in bad faith that exceed the scope of corporate authority. The evidence demonstrated Cardenas actively participated in the scheme to frustrate the dealership agreement by arbitrarily increasing the bond requirement and withholding the signed contract. These malicious acts constituted a willful and negligent violation of Articles 19 and 20 of the Civil Code on human relations and accountability for damages. Therefore, he could not hide behind the corporate veil to escape liability for his tortious conduct. The decision of the trial court was affirmed with the modification imposing solidary liability on both corporate and individual respondents.