1. Corporations can be liable in same manner as natural persons, for tort.

—A
corporation is civilly liable in the same manner as natural persons for torts, because
“generally speaking, the rules governing the liability of a principal or master for a
tort committed by an agent or servant are the same whether the principal or master
be a natural person or a corporation, and whether the servant or agent be a natural
or artificial person. All of the authorities agree that a principal or master is liable for
every tort which he expressly directs or authorizes, and this is just as true of a
corporation as of a natural person.

2. Corporation Law;   The President of a corporation who actively manages the

business falls within the meaning of an “employer” as contemplated by the Labor
Code and may be held jointly and severally liable for the obligations of the
corporation to its dismissed employees.—Sergio F. Naguiat, admittedly, was the
president of CFTI who actively managed the business. Thus, applying the ruling
in A.C. Ransom, he falls within the meaning of an “employer” as contemplated by
the Labor Code, who may be held jointly and severally liable for the obligations of
the corporation to its dismissed employees.



Same; Same; Same; “Close Family Corporations”; Stockholders who are actively
engaged in the management or operation of the business and affairs of a close
corporation shall be personally liable for corporate torts unless the corporation
has obtained reasonably adequate liability insurance.—Moreover, petitioners also
conceded that both CFTI and Naguiat Enterprises were “close family corporations”
owned by the Naguiat family. Section 100, paragraph 5, (under Title XII on Close
Corporations) of the Corporation Code, states: “(5) To the extent that the
stockholders are actively engage(d) in the management or operation of the business
and affairs of a close corporation, the stockholders shall be held to strict fiduciary
duties to each other and among themselves. Said stockholders shall be personally
liable for corporate torts unless the corporation has obtained reasonably adequate
liability insurance.” 



Same; Same; Same; Torts; Corporate Torts; Our jurisprudence is wanting as to the
definite scope of “corporate tort.”—Our jurisprudence is wanting as to the definite
scope of “corporate tort.” Essentially, “tort” consists in the violation of a right
given or the omission of a duty imposed by law. Simply stated, tort is a breach of a
legal duty. Article 283 of the Labor Code mandates the employer to grant
separation pay to employees in case of closure or cessation of operations of
establishment or undertaking not due to serious business losses or financial
 reverses, which is the condition obtaining at bar. CFTI failed to comply with this
law-imposed duty or obligation. Consequently, its stockholder who was actively
engaged in the management or operation of the business should be held personally
liable.

3. The President of a corporation cannot be held liable for estafa under Art. 315 of
the R.P.C. on account of the corporation’s violation of the terms of the trust receipt
which speaks exclusively of the corporation’s liability.—It is worthy of note that the
civil liability imposed by the trust receipt is exclusively on the Metal Company.
Speaking of such liability alone, as one arising from the contract, as distinguished
from the civil liability arising out of a crime, the petitioner was never intended to
be equally liable as the corporation. Without being made so liable personally as the
corporation is, there would then be no basis for holding him criminally liable, for
any violation of the trust receipt. This is made clearly so upon consideration of the
fact that in the violation of the trust agreement and in the absence of positive
evidence to the contrary, only the corporation benefited, not the petitioner
personally, yet, the allegation of the information is to the effect that the
misappropriation or conversion was for the personal use and benefit of the
petitioner, with respect to which there is variance between the allegation and the
evidence.

4. Corporation Law; The Trust Receipts Law recognizes the impossibility of imposing

the penalty of imprisonment on a corporation, hence, if the entrustee is a
corporation, the law makes the officers or employees or other persons responsible
for the offense liable to suffer the penalty of imprisonment.—The Trust Receipts
Law recognizes the impossibility of imposing the penalty of imprisonment on a
corporation. Hence, if the entrustee is a corporation, the law makes the officers or
employees or other persons responsible for the offense liable to suffer the penalty
of imprisonment. The reason is obvious: corporations, partnerships, associations
and other juridical entities cannot be put to jail. Hence, the criminal liability falls
on the human agent responsible for the violation of the Trust Receipts Law. In the
instant case, the Bank was the entruster while ARMAGRI was the entrustee. Being
the entrustee, ARMAGRI was the one responsible to account for the goods or its
proceeds in case of sale. However, the criminal liability for violation of the Trust
Receipts Law falls on the human agent responsible for the violation. Petitioner,
who admits being the agent of ARMAGRI, is the person responsible for the offense
for two reasons. First, petitioner is the signatory to the trust receipts, the loan
applications and the letters of credit. Second, despite being the signatory to the trust
 receipts and the other documents, petitioner did not explain or show why he is not
responsible for the failure to turn over the proceeds of the sale or account for the
goods covered by the trust receipts.



Same; Same; Same; Estafa; Mere failure by the entrustee to account for the goods
received in trust constitutes estafa; It is a well-settled doctrine long before the
enactment of the Trust Receipts Law, that the failure to account, upon demand, for
funds or property held in trust is evidence of conversion or misappropriation.—It is
a well-settled doctrine long before the enactment of the Trust Receipts Law, that the
failure to account, upon demand, for funds or property held in trust is evidence of
conversion or misappropriation. Under the law, mere failure by the entrustee to
account for the goods received in trust constitutes estafa. The Trust Receipts Law
punishes dishonesty and abuse of confidence in the handling of money or goods to
the prejudice of public order. The mere failure to deliver the proceeds of the sale or
the goods if not sold constitutes a criminal offense that causes prejudice not only to
the creditor, but also to the public interest. Evidently, the Bank suffered prejudice
for neither money nor the goods were turned over to the Bank.



Same; Same; Same; Same; Agency; It is a well-settled rule that the law of agency
governing civil cases has no application in criminal cases.—True, petitioner acted
on behalf of ARMAGRI. However, it is a well-settled rule that the law of agency
governing civil cases has no application in criminal cases. When a person
participates in the commission of a crime, he cannot escape punishment on the
ground that he simply acted as an agent of another party. In the instant case, the
Bank accepted the trust receipts signed by petitioner based on petitioner’s
representations. It is the fact of being the signatory to the two trust receipts, and
thus a direct participant to the crime, which makes petitioner a person responsible
for the offense.

5. Corporation Law; An officer of a corporation can be held criminally liable for acts
or omissions done in behalf of the corporation only where the law directly requires
the corporation to do an act in a given manner.—The case cited by the Court of
Appeals in support of its stand—Tan Boon Kong case, supra—may however not be
squarely applicable to the instant case in that the corporation was directly required
by law to do an act in a given manner, and the same law makes the person who fails
to perform the act in the prescribed manner expressly liable criminally. The
performance of the act is an obligation directly imposed by the law on the
corporation. Since it is a responsible officer or officers of the corporation who
 actually perform the act for the corporation, they must of necessity be the ones to
assume the criminal liability; otherwise this liability as created by the law would be
illusory, and the deterrent effect of the law, negated.



Same;   Same;   In the absence of a law making a corporate officer liable for a
criminal offense committed by the corporation, the existence of criminal liability of
the former may not be said to be beyond doubt. The intention of the parties must be
ascertained in such a situation to determine if criminal liability was intended to
result.—In the present case, a distinction is to be found with the Tan Boon Kong
case in that the act alleged to be a crime is not in the performance of an act directly
ordained by law to be performed by the corporation. The act is imposed by
agreement of parties, as a practice observed in the usual pursuit of a business or a
commercial transaction. The of-fense may arise, if at all, from the peculiar terms
and condition agreed upon by the parties to the transaction, not by direct provision
of the law. The intention of the parties, therefore, is a factor determinant of whether
a crime was committed or whether a civil obligation alone was intended by the
parties. With this explanation, the distinction adverted to between the Tan Boon
Kong case and the case at bar should come out clear and meaningful. In the
absence of a express provision of law making the petitioner liable for the criminal
offense committed by the corporation of which he is a president as in fact there is
no such provisions in the Revised Penal Code under which petitioner is being
prosecuted, the existence of a criminal liability on his part may not be said to be
beyond any doubt. In all criminal prosecutions, the existence of criminal liability
for which the accused is made answerable must be clear and certain. The maxim
that all doubts must be resolved in favor of the accused is always of compelling
force in the prosecution of offenses. This Court has thus far not ruled on the
criminal liability of an officer of a corporation signing in behalf of said corporation
a trust receipt of the same nature as that involved herein. In the case of Samo vs.
People, L-17603-04, May 31, 1962, the accused was not clearly shown to be acting
other than in his own behalf, not in behalf of a corporation.

6. Corporation Law; Criminal Liability for Damages; Corporate officers or

employees through whose act, default or omission the corporation commits a crime
may themselves be individually held answerable for the crime.—Bicol Gas is a
corporation. As such, it is an entity separate and distinct from the persons of its
officers, directors, and stockholders. It has been held, however, that corporate
officers or employees, through whose act, default or omission the corporation
commits a crime, may themselves be individually held answerable for the crime.

 

Same; Same; Same; Same; Before a stockholder may be held criminally liable for
acts committed by the corporation, it must be shown that he had knowledge of the
criminal act committed in the name of the corporation and that he took part in the
same or gave his consent to its commission whether by action or inaction.—The
“owners” of a corporate organization are its stockholders and they are to be
distinguished from its directors and officers. The petitioners here, with the
exception of Audie Llona, are being charged in their capacities as stockholders of
Bicol Gas. But the Court of Appeals forgets that in a corporation, the management
of its business is generally vested in its board of directors, not its stockholders.
Stockholders are basically investors in a corporation. They do not have a hand in
running the day-to-day business operations of the corporation unless they are at the
same time directors or officers of the corporation. Before a stockholder may be held
criminally liable for acts committed by the corporation, therefore, it must be shown
that he had knowledge of the criminal act committed in the name of the corporation
and that he took part in the same or gave his consent to its commission, whether by
action or inaction.

7. Corporation Law; Liability of Corporate Officers; Batas Pambansa Blg. 33;   A

member of the Board of Directors of a corporation, cannot, by mere reason of such
membership, be held liable for the corporation’s probable violation of   Batas
Pambansa (BP) Blg. 33.—As clearly enunciated in Ty v. NBI Supervising Agent De
Jemil, 638 SCRA 671 (2010), a member of the Board of Directors of a corporation,
cannot, by mere reason of such membership, be held liable for the corporation’s
probable violation of BP 33. If one is not the President, General Manager or
Managing Partner, it is imperative that it first be shown that he/she falls under the
catch-all “such other officer charged with the management of the business affairs,”
before he/she can be prosecuted.

8. Corporations; Liability of Corporate Officers; To be held criminally liable for the

acts of a corporation, there must be a showing that its officers, directors, and
shareholders actively participated in or had the power to prevent the wrongful act.
—A corporation’s personality is separate and distinct from its officers, directors,
and shareholders. To be held criminally liable for the acts of a corporation, there
must be a showing that its officers, directors, and shareholders actively participated
in or had the power to prevent the wrongful act.
9. Corporation Law; The existence of the corporate entity does not shield from
prosecution the corporate agent who knowingly and intentionally caused the
corporation to commit a crime. Thus, petitioners cannot hide behind the cloak of
the separate corporate personality of the corporation to escape criminal
liability.―This Court finds that there is sufficient evidence to warrant the
prosecution of petitioners for trademark infringement and unfair competition,
considering that petitioner Republic Gas Corporation, being a corporation,
possesses a personality separate and distinct from the person of its officers,
directors and stockholders. Petitioners, being corporate officers and/or directors,
through whose act, default or omission the corporation commits a crime, may
themselves be individually held answerable for the crime. Veritably, the CA
appropriately pointed out that petitioners, being in direct control and supervision in
the management and conduct of the affairs of the corporation, must have known or
are aware that the corporation is engaged in the act of refilling LPG cylinders
bearing the marks of the respondents without authority or consent from the latter
which, under the circumstances, could probably constitute the crimes of trademark
infringement and unfair competition. The existence of the corporate entity does not
shield from prosecution the corporate agent who knowingly and intentionally
caused the corporation to commit a crime. Thus, petitioners cannot hide behind the
cloak of the separate corporate personality of the corporation to escape criminal
liability. A corporate officer cannot protect himself behind a corporation where he is
the actual, present and efficient actor.

10.CORPORATIONS; LlABILITY OF OFFICERS AND AGENTS.—A Corporation

can act only through its officers and agents, and where the business itself involves a
violation of the law, the correct rule is that all who participate in it are liable.



ID. ; ID. ; CRIMINAL LIABILITY.—The manager of a corporation who fails to
make true return of the corporation's receipts and sales in violation of sections 1458
and 2723 of the Administrative Code, may be held criminally liable.

11. An employee of a company or corporation engaged in illegal recruitment may be

held liable as principal, together with his employer, if it is shown that he actively
and consciously participated in illegal recruitment.—As stated in the first sentence
of Section 6 of RA 8042, the persons who may be held liable for illegal recruitment
are the principals, accomplices and accessories. An employee of a company or
corporation engaged in illegal recruitment may be held liable as principal, together
with his employer, if it is shown that he actively and consciously participated in
illegal recruitment. It has been held that the existence of the corporate entity does
not shield from prosecution the corporate agent who knowingly and intentionally
causes the corporation to commit acrime. The corporation obviously acts, and can
act, only by and through its human agents, and it is their conduct which the law
must deter. The employee or agent of a corporation engaged in unlawful business
naturally aids and abets in the carrying on of such business and will be prosecuted
as principal if, with knowledge of the business, its purpose and effect, he
consciously contributes his efforts to its conduct and promotion, however slight his
contribution may be.



Same; Same; Same; The corporation also incurs criminal liability for the act of its
employee or agent if (1) the employee or agent committed the offense while acting
within the scope of his employment and (2) the offense was committed with at least
some intent to benefit the employer.—The corporation also incurs criminal liability
for the act of its employee or agent if (1) the employee or agent committed the
offense while acting within the scope of his employment and (2) the offense was
committed with at least some intent to benefit the employer. The liability is imputed
to the corporation not because it actively participated in the malice or fraud but
because the act is done for the benefit of the corporation while the employee or
agent was acting within the scope of his employment in the business of the
corporation, and justice requires that the latter shall be held responsible for
damages to the individual who suffered by such conduct. [New York Central &
Hudson River Railroad Co. vs. US, 212 U.S. 481, 53 L. ed. 613 (1909); US vs.
Basic Construction Co., et al., 711 F.2d 570 (1983); US vs. Automated Medical
Laboratories, Inc., 770 F.2d 399 (1985)]. 



Same; Same; Same; Agency; The law of agency, as applied in civil cases, has no
application in criminal cases, and no man can escape punishment when he
participates in the commission of a crime upon the ground that he simply acted as
an agent of any party.—The law of agency, as applied in civil cases, has no
application in criminal cases, and no man can escape punishment when he
participates in the commission of a crime upon the ground that he simply acted as
an agent of any party. The culpability of the employee therefore hinges on his
knowledge of the offense and his active participation in its commission. Where it is
shown that the employee was merely acting under the direction of his superiors and
was unaware that his acts constituted a crime, he may not be held criminally liable
for an act done for and in behalf of his employer.



 Same;   Same;   Same;   Same;   Agents or representatives appointed by a licensed
recruitment agency whose appointments are not previously approved by the
Philippine Overseas Employment Administration are considered “non-licensee” or
“non-holder of authority” and therefore not authorized to engage in recruitment
activity.—Evidence shows that accused-appellant interviewed private complainants
in the months of June, August and September in 1994 at Craftrade’s office. At that
time, he was employed as interviewer of Craftrade which was then operating under
a temporary authority given by the POEA pending renewal of its license. The
temporary license included the authority to recruit workers. He was convicted
based on the fact that he was not registered with the POEA as employee of
Craftrade. Neither was he, in his personal capacity, licensed to recruit overseas
workers. Section 10 Rule II Book II of the Rules and Regulation Governing
Overseas Employment (1991) requires that every change, termination
or appointment of officers, representatives and personnel of licensed agencies be
registered with the POEA. Agents or representatives appointed by a licensed
recruitment agency whose appointments are not previously approved by the POEA
are considered “non-licensee” or “non-holder of authority” and therefore not
authorized to engage in recruitment activity.

12.Corporations; A corporation cannot invoke its separate judicial entity to escape its
liability for nonpayment of Social Security System (SSS) contributions.—Even
when the employer is a corporation, it shall still be held liable for the non-
remittance of SSS contributions. It is, however, the head, directors or officers that
shall suffer the personal criminal liability. Although a corporation is invested by
law with a personality separate and distinct from that of the persons composing it,
the corporate veil is pierced when a director, trustee or officer is made personally
liable by specific provision of law. In this regard, Section 28(f) of R.A. No. 8282
explicitly provides that “[i]f the act or omission penalized by this Act be committed
by an association, partnership, corporation or any other institution, its managing
head, directors or partners shall be liable to the penalties provided in this Act for
the offense.” Thus, a corporation cannot invoke its separate judicial entity to escape
its liability for nonpayment of SSS contributions. To acquire jurisdiction over the
corporation in a criminal case, its head, directors or partners must be served with a
warrant of arrest. Naturally, a juridical entity cannot be the subject of an arrest
because it is a mere fiction of law; thus, an arrest on its representative is sufficient
to acquire jurisdiction over it. To reiterate, the law specifically disregards the
separate personality between the corporation and its officers with respect to
violations of R.A. No. 8282; thus, an arrest on its officers binds the corporation.