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Rustan Pulp V CA

In the case of Rustan Pulp v CA, Rustan Pulp attempted to stop deliveries of pulp wood from Lluch and Borromeo, leading to a breach of contract complaint. The court initially dismissed the complaint but later ordered Rustan Pulp's management to pay damages to the plaintiffs. Ultimately, it was held that the president and manager of Rustan Pulp could not be held personally liable for the contract as they acted in their official capacities.

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25 views1 page

Rustan Pulp V CA

In the case of Rustan Pulp v CA, Rustan Pulp attempted to stop deliveries of pulp wood from Lluch and Borromeo, leading to a breach of contract complaint. The court initially dismissed the complaint but later ordered Rustan Pulp's management to pay damages to the plaintiffs. Ultimately, it was held that the president and manager of Rustan Pulp could not be held personally liable for the contract as they acted in their official capacities.

Uploaded by

Angela
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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RUSTAN PULP v CA

FACTS: Rustan Pulp informed Romeo Lluch and Roberto Borromeo to stop the
delivery of pulp wood supplied by the latter pursuant to a contract of sale
between them. Lluch sent a letter to clarify whether the letter sent by Rustan
was for the stoppage of delivery or termination of the contract of sale.
Unanswered Lluch and Borromeo resumed deliveries and later on filed a
complaint for breach of Contract against Rustan Pulp, Bienvenido Tantoco and
Romeo Vergara for breach of Contract. The court of origin dismissed the
complaint but at the same time enjoined Rustan Pulp to respect the contract of
sale if circumstances warrant the full operation in a commercial scale of
Rustan Pulp’s Baloi plant and to continue accepting and paying for deliveries of
pulp wood products from Romeo Lluch. On appeal on the Intermediate
Appellate Court which modified the judgment by directing Rustan Pulp
including Tantoco, president and general manager, and Vergara, resident
manager to pay Lluch and Borromeo the sum of P30,000.00 as moral damages
and P15,000.00 as attorney's fees.

ISSUE: Whether or not the president and the manager of Rustan Pulp can be
held liable?

HELD: The President and Manager of a corporation who entered into and
signed a contract in his official capacity cannot be made liable thereunder in
his individual capacity in the absence of stipulation to that effect due to the
personality of the corporation being separate and distinct from the persons
composing it. Because of this precept, Vergara's supposed non-participation in
the contract of sale although he signed the letter dated September 30, 1968 is
completely immaterial.

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