GR L 48627; (June, 1987) (Digest)
G.R. No. L-48627, June 30, 1987
FERMIN Z. CARAM, JR. and ROSA O. DE CARAM, petitioners, vs. THE HONORABLE COURT OF APPEALS and ALBERTO V. ARELLANO, respondents.
FACTS
Private respondent Alberto V. Arellano rendered pre-incorporation services, including preparing a project study, at the request of defendants Barretto and Garcia to organize an airline. This study was later presented to petitioners Fermin and Rosa Caram to convince them to invest. Subsequently, Filipinas Orient Airways was incorporated, with the Carams as major stockholders and, along with Barretto and Garcia, as principal officers. Arellano sued for compensation, and the Court of Appeals held the corporation, Barretto, Garcia, and the Carams jointly and severally liable for P50,000.00 for his services plus attorney’s fees.
The petitioners, the Carams, contested this solidary liability. They argued they had no contractual relationship with Arellano, as they were merely subsequent investors persuaded by the project study. They asserted that liability should rest solely with the promoters, Barretto and Garcia, who directly requested the services, or with the separate juridical entity, the corporation itself.
ISSUE
Whether petitioners Fermin Z. Caram, Jr. and Rosa O. De Caram can be held personally liable, jointly and severally, for the compensation due for pre-incorporation services rendered to the corporation.
RULING
The Supreme Court ruled in favor of the petitioners, declaring them not liable, jointly or solidarily. The legal logic is anchored on the absence of a contractual link and the recognition of corporate personality. The Court found that the Carams were not involved in the initial, preparatory stages of incorporation. The services were contracted solely by promoters Barretto and Garcia. The Carams’ participation was limited to being prospective financiers who, upon review of the completed study, decided to invest. The corporation, Filipinas Orient Airways, was a bona fide entity with a separate juridical personality. There was no factual basis to pierce the corporate veil, as the corporation was not shown to be fictitious or used to defraud. Merely benefiting from the services, as all stockholders do, is insufficient to impose personal liability on an investor. To hold otherwise would unjustly extend personal liability to all stockholders. Consequently, the Court modified the challenged decision, absolving the Carams from any liability under the award for Arellano’s pre-incorporation services.