CDCP vs.

Cuenca
Facts:
Ultra International Trading Corporation (UITC) applied for a surety bond from Malayan Insurance
Co., Inc. (MICI), to guarantee its credits, indebtedness, obligations and liabilities of any kind to
Goodyear Tire and Rubber Company of te !ilippines (Goodyear). MICI appro"ed te application
and issued MIC# an amount not e$ceeding !%&&,&&&.&&.
'ubse(uently, UITC failed to settle teir account )it goodyear so te MICI paid (%&&k) it after
se"eral demand letters to UITC. *en te MICI sent demand letter for te reimbursement plus legal
interest, UITC said tat Construction and +e"elopment Corporation of te !ilippines (C+C!) ad
initiated complete re"ie) of teir financial plan to enable it to pay. UITC )as a subsidiary company of
C+C!, o)ing around ,-. of its sares of stock. /o)e"er, payment is still not made so MICI filed a
complaint.
In te meantime, Rodolfo Cuenca (0#+ member) filed motion for lea"e to file a tird1party
complaint )ic te trial court granted.
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Te tird1party complaint
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against C+C! alleged tat it ad
assumed Rodolfo5s liability under te indemnity agreement as indicated in a board resolution.
Issue:
Held:
C+C! cannot be made directly liable to MICI under te indemnity agreement on te ground tat it
is UITC5s ma6ority stockolder. It bears stressing tat te petitioner )as not a party defendant in te
main action. MICI did not assert any claim against te petitioner, nor )as te petitioner impleaded in
te tird1party complaint on te ground of its direct liability to MICI.
In any case, petitioner !7CC, as ma6ority stockolder, may not be eld liable for UITC5s
obligation. 8 corporation, upon coming into e$istence, is in"ested by la) )it a personality separate
and distinct from tose persons composing it as )ell as from any oter legal entity to )ic it may be
related.
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Te "eil of corporate fiction may only be disregarded in cases )ere te corporate "eicle
is being used to defeat public con"enience, 6ustify a )rong, protect fraud, or defend a crime.
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Mere
o)nersip by a single stockolder or by anoter corporation of all or nearly all of te capital stock of a
corporation is not of itself sufficient ground for disregarding te separate corporate personality.
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To
disregard te separate 6uridical personality of a corporation, te )rongdoing must be clearly and
con"incingly establised.
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