Andres Lao vs. CA, the Associated Anglo-Amedican Tabacco Corp. and Esteban Co. February 17, 2000
Corporate Officers not personally liable for Authorized Corporate Acts
Facts: In 1965 a Contract of Sales Agent was entered by the Association of Anglo-American Tobacco Corporation with Andres Lao. Lao was to sell cigarettes manufactured and shipped by the Corporation to his address in Tacloban, and he would remit the sales proceeds. Lao would receive commission for those sold, with a monthly salary and operational allowance. In 1968 Lao’s attention was called to his enormous accounts and the difficulty in obtaining a tally despite his avowal of regular remittance of collections. In 1969 it was established that his liability amounted to P525,053. Also, the Corp. discovered that Lao was engaged in a construction business and suspecting that he diverted the sale proceeds to such business, it gave a demand letter for payment of his obligations. It also found that contrary to his allegations, he did not have a huge collectible from customers and nothing was due to the Corporation. From then on, the Corp. no longer sent him shipments. In 1970, Andres, Jose and Tomas Lao brought a complaint for accounting and damages against the Corp.. The court ordered both to undergo a court supervised accounting but also ordered the Corporation to pay the Lao’s actual loss of earnings, moral damages, exemplary damages, atty. fees and cost of suit. Later the court gave a supplemental decision dismissing Lao’s claim of overpayment. The Corp. and the Lao’s appealed. The CA found the Corp. liable for actual damages of loss of earnings, moral damages and exemplary damages. It also ordered the Corp. to pay the claim of overpayment by Lao. The Corp. file a motion for reconsideration and during its pendency, Esteban Co, the new VP of the Corp. filed a complaint with the fiscal alleging Lao failed to remit an amount which he allegedly misappropriated and converted to his own...
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