Vazquez vs. Borja, GR L-48930, Feb.

23, 1944

In January 1932, Francisco De Borja entered into a contract of sale with the
NVSD (Natividad-Vasquez Sabani Development Co., Inc.). The subject of the
sale was 4,000 cavans of rice valued at Php2.10 per cavan. On behalf of the
company, the contract was executed by Antonio Vasquez as the companys
acting president. NVSD. only delivered 2,488 cavans and failed and refused
despite demand to deliver the rest hence De Borja incurred damages (apparently,
NVSD was insolvent). He then sue Vasquez for payment of damages.
ISSUE: Whether or not Vasquez is liable for damages.
HELD: No. Vasquez is not party to the contract as it was NVSD which De Borja
contracted with. It is well known that a corporation is an artificial being invested
by law with a personality of its own, separate and distinct from that of its
stockholders and from that of its officers who manage and run its affairs. The
mere fact that its personality is owing to a legal fiction and that it necessarily has
to act thru its agents, does not make the latter personally liable on a contractduly
entered into, or for an act lawfully performed, by them for an in its behalf.
The fact that the corporation, acting thru Vazquez as its manager, was guilty of
negligence in the fulfillment of thecontract did not make Vazquez principally or
even subsidiarily liable for such negligence. Since it was the
corporationscontract, its non fulfillment, whether due to negligence or fault or to
any other cause, made the corporation and not its agent liable.
JUSTICE PARAS Dissenting :
Vasquez as president of NVSD is liable for damages. Vasquez, as acting
president and manager of NVSD, and with full knowledge of the then insolvent
status of his company, agreed to sell to De Borja 4,000 cavans of palay. Further,
NVSD was soon thereafter dissolved.