Rustan Pulp & Paper Mills v. The Intermediate Appellate Court

Summary

This case involved a breach of contract dispute between Rustan Pulp & Paper Mills, Inc. and its pulp wood supplier Romeo A. Lluch. The Supreme Court ruled that a contractual provision allowing unilateral stoppage of deliveries based solely on the buyer's determination of sufficient supply was potestative and therefore void under Article 1306 of the Civil Code. The Court found Rustan liable for breach of contract after it sent a stoppage notice but continued accepting deliveries from other suppliers, contradicting its claim of sufficient supply. However, the Court modified the lower court's decision by absolving individual corporate officers from personal liability, establishing that corporate officers acting in their official capacity cannot be held personally liable absent specific stipulation, reinforcing the doctrine of separate corporate personality.