This document discusses a case involving Shrimp Specialists, Inc. (SSI) and Fuji Triumph Agri-Industrial Corporation. SSI and Fuji had a distributorship agreement under which Fuji agreed to supply prawn feeds to SSI. SSI issued postdated checks as payment but later issued stop payment orders claiming the feeds were contaminated. The court ruled that the president of SSI could not be held solidarily liable for the dishonored checks because a corporation has a separate legal personality from its owners and officers. Solidary liability requires exceptional circumstances not present in this case.
This document discusses a case involving Shrimp Specialists, Inc. (SSI) and Fuji Triumph Agri-Industrial Corporation. SSI and Fuji had a distributorship agreement under which Fuji agreed to supply prawn feeds to SSI. SSI issued postdated checks as payment but later issued stop payment orders claiming the feeds were contaminated. The court ruled that the president of SSI could not be held solidarily liable for the dishonored checks because a corporation has a separate legal personality from its owners and officers. Solidary liability requires exceptional circumstances not present in this case.
This document discusses a case involving Shrimp Specialists, Inc. (SSI) and Fuji Triumph Agri-Industrial Corporation. SSI and Fuji had a distributorship agreement under which Fuji agreed to supply prawn feeds to SSI. SSI issued postdated checks as payment but later issued stop payment orders claiming the feeds were contaminated. The court ruled that the president of SSI could not be held solidarily liable for the dishonored checks because a corporation has a separate legal personality from its owners and officers. Solidary liability requires exceptional circumstances not present in this case.
This document discusses a case involving Shrimp Specialists, Inc. (SSI) and Fuji Triumph Agri-Industrial Corporation. SSI and Fuji had a distributorship agreement under which Fuji agreed to supply prawn feeds to SSI. SSI issued postdated checks as payment but later issued stop payment orders claiming the feeds were contaminated. The court ruled that the president of SSI could not be held solidarily liable for the dishonored checks because a corporation has a separate legal personality from its owners and officers. Solidary liability requires exceptional circumstances not present in this case.
Download as DOCX, PDF, TXT or read online from Scribd
Download as docx, pdf, or txt
You are on page 1/ 1
2 SHRIMP SPECIALISTS, INC.
v FUJI TRIUMPH AGRI-INDUSTRIAL CORPORATION corporation; or
GR 168756 | 7 December 2009 | J. Carpio o When a director, trustee or officer is made, by specific provision of Separate Personality / Piercing the Veil law, personally liable for his corporate action. In this case, none of these exceptional circumstances is present. A corporation is vested by law with a personality separate and distinct from the people comprising it. Ownership by a single or small group of stockholders of nearly all of the capital stock of the corporation is not by itself a sufficient ground to disregard the separate corporate personality.
1. SSI and Fuji entered into a Distributorship Agreement, under which Fuji agreed to supply prawn feeds to SSI. 2. As payment, SSI issued postdated checks to SSI but thereafter issued a stop payment order because it discovered that earlier deliveries were contaminated with aflatoxin. 3. Fuji’s Vice President and SSI’s Finance Officer met and agreed that SSI would issue another set of checks to cover the ones earlier issued and that Fuji would replace the feeds. 4. Upon presentment of the replacement checks, however, they were again dishonored due to another stop payment order issued by SSI. 5. SSI contends that it was constrained to issue such order for failure of Fuji to replace the defective feeds. 6. Criminal charges (BP 22) were filed against the SSI officers who signed the checks. 7. RTC found the officers solidarily liable; CA modified, absolving SSI’s President from liability
WON the President of SSI may be held solidarily liable in this case- NO
A corporation is vested by law with a personality separate and distinct
from the people comprising it. Ownership by a single or small group of stockholders of nearly all of the capital stock of the corporation is not by itself a sufficient ground to disregard the separate corporate personality. The general rule is that obligations incurred by the corporation, acting through its directors, officers, and employees, are its sole liabilities. However, solidary liability may be incurred under the following exceptional circumstances: o When directors and trustees or, in appropriate cases, the officers of a corporation: a) vote for or assent to patently unlawful acts of the corporation, b) act in bad faith or with gross negligence in directing the corporate affairs, or c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons; o When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto; o When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the
