Spouses Marino v. Hon. Court of Appeals

Summary

This case involves a dealership agreement dispute where Mobil Philippines Inc. filed a replevin action to recover equipment loaned to spouses Sapugay pending their dealership application. The Sapugays countered that Mobil and its manager Cardenas acted in bad faith by creating obstacles through excessive bond requirements to prevent the dealership award, intending to give it to another company. The trial court favored the Sapugays, awarding damages for bad faith. The Court of Appeals modified the decision, excluding Cardenas from liability and reducing damages. The Supreme Court reinstated Cardenas' joint liability, finding he participated in the fraudulent scheme. The Court applied Articles 19-20 of the Civil Code regarding abuse of rights and established important precedents on counterclaim jurisdiction and compulsory counterclaim requirements. The decision demonstrates how corporate managers can be held personally liable for bad faith acts in contractual negotiations.