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CASE 6-11: Case No. 9: National Power Corp. Vs CA

This case involves a dispute between National Power Corporation (NPC) and Growth Link Inc. Growth Link filed a case against NPC alleging gross bad faith in their dealings as NPC demanded returns of delivered engine parts and arbitrarily blacklisted Growth Link as a supplier. The trial court found NPC liable and held NPC's officers and board of directors jointly and solidarily liable. However, the Supreme Court ruled that NPC's officers and directors should not be held solidarily liable as they were sued in their official capacities, not personal capacities. There were no findings that the officers and directors committed individual acts of malice, bad faith or ill-motive. A corporation acts through its officers and is a separate legal entity, so NPC alone should be liable as

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541 views2 pages

CASE 6-11: Case No. 9: National Power Corp. Vs CA

This case involves a dispute between National Power Corporation (NPC) and Growth Link Inc. Growth Link filed a case against NPC alleging gross bad faith in their dealings as NPC demanded returns of delivered engine parts and arbitrarily blacklisted Growth Link as a supplier. The trial court found NPC liable and held NPC's officers and board of directors jointly and solidarily liable. However, the Supreme Court ruled that NPC's officers and directors should not be held solidarily liable as they were sued in their official capacities, not personal capacities. There were no findings that the officers and directors committed individual acts of malice, bad faith or ill-motive. A corporation acts through its officers and is a separate legal entity, so NPC alone should be liable as

Uploaded by

CJ Mel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CASE 6-11

Case No. 9: National Power Corp. vs CA

(G.R. No. 113103 June 13, 1997


NATIONAL POWER CORPORATION (NPC), NPC BOD, CONRADO D. DEL ROSARIO and
MARCELINO ILAO,
vs.
CA, HON. TOMAS V. TADEO, JR., in his capacity as Presiding Judge, RTC- Quezon City
and GROWTH LINK, INC

GROWTH LINK, INC., petitioner, vs. CA and NPC)

Ruling (Book Page 95): It held that the trial court’s finding of solidary liability among the corporation and
its officers and its officers and directors would patently be baseless when the decision contained no
allegation, finding or conclusion regarding particular acts committed by said officers and members of the
board of directors that showed them to have been individually guilty of unmistakable malice, bad faith or
ill-motive in their personal dealings with third parties. The court emphasized that when corporate officers
and directors are sued merely as nominal parties in their official capacities as such, they cannot be held
liable personally for the judgment rendered against the corporation.

Facts: Growth Link a domestic corporation was supplying engine spare parts to NAPOCOR, it filed a
case against NAPOCOR alleging its gross evident bad faith in its dealings with it as its duly accredited
supplier for demanding return of delivered items claiming it as defective despite proper inspection upon
delivery, alleged discrepancy on brand/technical descriptions, alleging items were second hand while in
fact, they were brand new and deducting amounts in their receivables despite complete deliveries and
NAPOCOR’s unilateral and arbitrary blacklisting of the said supplier.

The trial court found NAPOCOR’s gross evident bad faith in dealing with the supplier and among its order
was holding the individual respondents "jointly and severally" liable with Napocor.

Upon appeal, the CA ruled that there is no need to pierce the Napocor's corporate veil so as to make the
individual respondents personally liable for Napocor's obligations as there was no allegation that would
justify the imposition of a "joint and several" liability with (Napocor) of the individual respondents who, as
officers of Napocor, were being sued in their respective official capacities, hence, the petition to the SC.

Issue: Whether or not the officers and BOD of the NAPOCOR should be held solidary liable with the
NAPOCOR’s obligation with Growth Link.

Held: No. NPC's officers and members of the Board of Directors were sued merely as nominal parties in
their official capacities as such. They were impleaded by Growth Link not in their personal capacities as
individuals but in their official capacities as officers and members of the Board of Directors Therefore, as
a bonafide government corporation, NPC should alone be liable for its corporate acts as duly authorized
by its officers and directors. 

The decision of the trial court contains no such allegation, finding or conclusion regarding particular acts
committed by said officers and members of the Board of Directors that show them to have been
individually guilty of unmistakable malice, bad faith, or ill-motive in their personal dealings with Growth
Link.

A corporation is invested by law with a separate personality, separate and distinct from that of the
persons composing it as well as from any other legal entity to which it may be related. A corporation is an
artificial person and can transact its business only through its officers and agents.

The records even bear out that every single offense taken by the NPC against Growth Link arose from a
corporate decision and was executed as a corporate act. Thus, the trial court gravely erred in holding
said officers and directors to be jointly and severally liable with the NPC for the damages suffered by
Growth Link but caused by the NPC alone as a corporate entity.

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CASE 6-11

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