Scribd Logo
Upload

Welcome to Scribd!

  • 301 views

    82 - Tramat Mercantile Inc v. CA

    Uploaded by

    mimiyuki_
    This case involves a dispute over the sale of a tractor by Tramat Mercantile Inc. to the Metropolitan Waterworks and Sewerage System. Tramat purchased the tractor from Melchor de la Cuesta, but then stopped payment on the check after the water system refused to pay, discovering defects in the tractor and that the engine was reconditioned, not new as represented. De la Cuesta sued Tramat and its president David Ong personally to recover the unpaid amount. The court found that Ong could not be held jointly liable with Tramat as he acted in his role as a corporate officer, not personally. Personal liability requires that an officer assented to an unlawful act, acted in bad faith,

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    82 - Tramat Mercantile Inc v. CA

    Uploaded by

    mimiyuki_
    301 views2 pages
    This case involves a dispute over the sale of a tractor by Tramat Mercantile Inc. to the Metropolitan Waterworks and Sewerage System. Tramat purchased the tractor from Melchor de la Cuesta, but then stopped payment on the check after the water system refused to pay, discovering defects in the tractor and that the engine was reconditioned, not new as represented. De la Cuesta sued Tramat and its president David Ong personally to recover the unpaid amount. The court found that Ong could not be held jointly liable with Tramat as he acted in his role as a corporate officer, not personally. Personal liability requires that an officer assented to an unlawful act, acted in bad faith,

    Original Title

    82_Tramat Mercantile Inc v. CA

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This case involves a dispute over the sale of a tractor by Tramat Mercantile Inc. to the Metropolitan Waterworks and Sewerage System. Tramat purchased the tractor from Melchor de la Cuesta, but then stopped payment on the check after the water system refused to pay, discovering defects in the tractor and that the engine was reconditioned, not new as represented. De la Cuesta sued Tramat and its president David Ong personally to recover the unpaid amount. The court found that Ong could not be held jointly liable with Tramat as he acted in his role as a corporate officer, not personally. Personal liability requires that an officer assented to an unlawful act, acted in bad faith,

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    301 views2 pages

    82 - Tramat Mercantile Inc v. CA

    Uploaded by

    mimiyuki_
    This case involves a dispute over the sale of a tractor by Tramat Mercantile Inc. to the Metropolitan Waterworks and Sewerage System. Tramat purchased the tractor from Melchor de la Cuesta, but then stopped payment on the check after the water system refused to pay, discovering defects in the tractor and that the engine was reconditioned, not new as represented. De la Cuesta sued Tramat and its president David Ong personally to recover the unpaid amount. The court found that Ong could not be held jointly liable with Tramat as he acted in his role as a corporate officer, not personally. Personal liability requires that an officer assented to an unlawful act, acted in bad faith,

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    Tramat Mercantile Inc. v.

    CA
    November 7, 1994
    Vitug, J.

    Facts: On 09 April 1984, Melchor de la Cuesta, doing business under the name and style
    of "Farmers Machineries," sold to Tramat Mercantile, Inc. ("Tramat"), one (1) unit
    HINOMOTO TRACTOR Model MB 1100D powered by a 13 H.P. diesel engine. In
    payment, David Ong, Tramat's president and manager, issued a check for P33,500.00
    (apparently replacing an earlier postdated check for P33,080.00). Tramat, in turn, sold
    the tractor, together with an attached lawn mower fabricated by it, to the Metropolitan
    Waterworks and Sewerage System ("NAWASA") for P67,000.00. David Ong caused a
    "stop payment" of the check when NAWASA refused to pay the tractor and lawn
    mower after discovering that, aside from some stated defects of the attached lawn
    mower, the engine (sold by de la Cuesta) was a reconditioned unit.

    On 28 May 1985, de la Cuesta filed an action for the recovery of P33,500.00, as well as
    attorney's fees of P10,000.00, and the costs of suit. Ong, in his answer, averred, among
    other things, that de la Cuesta had no cause of action; that the questioned transaction
    was between plaintiff and Tramat Mercantile, Inc., and not with Ong in his personal
    capacity; and that the payment of the check was stopped because the subject tractor had
    been priced as a brand new, not as a reconditioned unit.

    Issue: Whether or not Ong could be held jointly and severally liable with the
    corporation.

    Ruling: We could find no reason to reverse the factual findings of both the trial court
    and the appellate court, particularly in holding that the contract between de la Cuesta
    and TRAMAT was one of absolute, not conditional, sale of the tractor and that de la
    Cuesta did not violate any warranty on the sale of the tractor to TRAMAT.

    It was, nevertheless, an error to hold David Ong jointly and severally liable with
    TRAMAT to de la Cuesta under the questioned transaction. Ong had there so acted, not
    in his personal capacity, but as an officer of a corporation, TRAMAT, with a distinct and
    separate personality. As such, it should only be the corporation, not the person acting
    for and on its behalf, that properly could be made liable thereon. 3

    Personal liability of a corporate director, trustee or officer along (although not


    necessarily) with the corporation may so validly attach, as a rule, only when —
    1. He assents (a) to a patently unlawful act of the corporation, or
    (b) for bad faith, or gross negligence in directing its affairs, or (c) for conflict of interest,
    resulting in damages to the corporation, its stockholders or other persons; 4

    2. He consents to the issuance of watered stocks or who, having knowledge thereof,


    does not forthwith file with the corporate secretary his written objection thereto; 5

    3. He agrees to hold himself personally and solidarily liable with the corporation; 6 or

    4. He is made, by a specific provision of law, to personally answer for his corporate


    action.7

    In the case at bench, there is no indication that petitioner David Ong could be held
    personally accountable under any of the abovementioned cases.

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy