RESTAURANTE LAS CONCHAS vs. LLEGO G.R. No. 119085, September 9, 1999

Facts: While private respondents (employees of Restaurante Las Conchas) were being employed by petitioners (David and Elizabeth Gonzales – officers and members of BOD), the Restaurante Services Corporation got involved in a legal battle with the Ayala Land, Inc. over the land allegedly being occupied by the petitioners for their restaurant. Ayala Land, Inc. obtained a favorable judgment in the case filed against Restaurant Services Corporation for unlawful detainer and the latter were ordered to vacate the premises. Petitioners attempted to look for a suitable place for their restaurant business at the Ortigas Center but to no avail, thus sometime in February 1994 they shut down their business. This resulted in the termination of employment of private respondents.

The NLRC, on appeal, ordered the petitioners to pay the separation benefits to the complainant.


Issue: Can the petitioners be held personally liable as officers and members of the BOD of the corporation, notwithstanding the fact that it is the latter which is the owner of Restaurante Las Conchas?


Held: Yes. Assuming that indeed, the Restaurant Services Corporation was the owner of the Restaurante Las Conchas and the employer of private respondents, this will not absolve petitioners David Gonzales and Elizabeth Gonzales from their liability as corporate officers. Although, as a rule, the officers and members of a corporation are not personally liable for acts done in the performance of their duties, this rule admits of exceptions, one of which is when the employer corporation is no longer existing and is unable to satisfy the judgment in favor of the employee, the officers should be held to satisfy the judgment in favor of the employee, the officers should be held liable for acting on behalf of the corporation. Here, the corporation does not appear to exist anymore.

The employees can no longer claim their separation benefits and 13th month pay from the corporation because it has already ceased operation. To require them to do so would render illusory the separation and 13th month pay awarded to them by the NLRC. Their only recourse is to satisfy their claim from the officers of the corporation who were, in effect, acting in behalf of the corporation. It would appear that, originally, Restaurante Las Conchas was a single proprietorship put up by the parents of Elizabeth Gonzales, who together with her husband, David, later took over its management. Private respondents claim, and rightly so, that the former were the real owners of the restaurant. The conclusion is bolstered by the fact that petitioners never revealed who were the other officers of the Restaurant Services Corporation, if only to pinp9int responsibility in the closure of the restaurant that resulted in the dismissal of private respondents from employment. Petitioners David and Elizabeth Gonzales are, therefore, personally liable for the payment of the separation and 13th month pay due to their former employees.