Вы находитесь на странице: 1из 7

Araneta v. del Paterno August 22, 1952Tuason, J.

FACTS: Paz Tuason de Paterno is the registered owner of a parcel of land, which was subdivided into lots. Most of these lots were occupied by lessees who had contracts of lease that would expire at a certain time, and carried a stipulation giving the lessees a right of first refusal in case the lots were to be sold. In 1940 and 1941, Paz Tuason obtained from Jose Vidal several loans, and constituted a mortgage on the property to secure the debt. In 1943, she obtained additional loans upon the same security. She decided to sell the whole property to Gregorio Araneta, Inc. The day after the agreement was signed, Paz Tuason offered to Vidal a check in full settlement of her mortgage obligation but Vidal refused to accept it or cancel the mortgage. Gregorio Araneta instituted the case to compel PazTuason to deliver to the former a clear title of the lots. One of the objections made against the sale is that Jose Araneta, president of Gregorio Araneta Inc., was also the agent of Paz Tuason. ISSUE: Whether or not Gregorio Araneta was the agent of Paz Tuason HELD: NO. Article 1459 of the Spanish Civil Code provides: The following persons cannot take bypurchase, even at a public or judicial auction, either in person or through mediation of another: 2. An agent, any property of which the management or sale may have been entrusted tohim; However, in the opinion of Manresa, an agent (in the sense of Article 1459) is one who accepts anothers representation to perform in his name certain acts of more or less transcendency. The ban of paragraph 2 of Article 1459 connotes the idea of trust and confidence. To come under this prohibition, the agent must be in a fiduciary relation with his principal. Tested by this standard, Jose Araneta was not an agent within the meaning of Article 1459. He was nothing more than a go-between or middle man between Paz Tuason and Gregorio Araneta, Inc. to bring them together to make the contract themselves. Jose Araneta was not authorized to make a binding contract for Paz Tuason. He had no power or discretion, which he could abuse to his advantage and to the owners prejudice CIR v. Norton & Harrison Company, G.R. No. L-17618, Aug. 31, 1964 Plaintiffs filed a collection action against X Corporation. Upon execution of the court's decision, X Corporation was found to be without assets. Thereafter, plaintiffs filed an action against its present and past stockholder Y Corporation which owned substantially all of the stocks of X corporation. The two corporations have the same board of directors and Y Corporation financed the operations of X corporation. May Y Corporation be held liable for the debts of X Corporation? Why?

A: Yes, Y Corporation may be held liable for the debts of X Corporation. The doctrine of piercing the veil of corporation fiction applies to this case. The two corporations have the same board of directors and Y Corporation owned substantially all of the stocks of X Corporation, which facts justify the conclusion that the latter is merely an extension of the personality of the former, and that the former controls the policies of the latter. Added to this is the fact that Y

Corporation controls the finances of X Corporation which is merely an adjunct, business conduit or alter ego of Y Corporation. (CIR v. Norton & Harrison Company, G.R. No. L-17618, Aug. 31, 1964) Palacio vs. Fely Transportation Company Fely Company hired Carillo as a driver. Carillo run over Mario Palacio, son of Plaintiff. Mario Palacio suffered a fracture on his leg. Palacio filed this case to recover expenses that he allegedly incurred. In a previous case, the driver Carillo was found guilty of reckless imprudence and ordered to pay 500 in damages. A motion to dismiss was filed by Fely Corp on 1. No cause of action and 2. Cause is barred by prior judgment. The CFI dismissed the case and held that the person subsidiarily liable is Isabel Calingasan, the employer. SC reverses. Calingasan and Fely Corp are subsidiary liable. Calingasan and Fely Corp are to be regarded as the same person. The purpose of the corp was to evade his subsidiary civil liability. And thus the corp should not be heard to say that it has a personality separate and distinct from its members when to allow it to do so would be to sanction the use of fiction of corporate entity as a shield to further an end subversive to justice.

PALAY VS CLAVE FACTS: Palay, Inc., through its President, Albert Onstott executed in favor of Nazario Dumpit, a Contract to Sell a parcel of Land of the Crestview Heights Subdivision in Antipolo, Rizal, owned by said corporation. The sale price was P23,300.00 with 9% interest per annum, payable with a downpayment of P4,660.00 and monthly installments of P246.42 until fully paid. Paragraph 6 of the contract provided for automatic extrajudicial rescission upon default in payment of any monthly installment after the lapse of 90 days from the expiration of the grace period of one month, without need of notice and with forfeiture of all installments paid. Dumpit paid the downpayment and several installments amounting to P13,722.50. The last payment was made on December 5, 1967 for installments up to September 1967. Almost 6 years later, Dumpit wrote petitioner offering to update all his overdue accounts with interest, and seeking its written consent to the assignment of his rights to a certain Lourdes Dizon. Replying petitioners informed respondent that his Contract to Sell had long been rescinded pursuant to paragraph 6 of the contract, and that the lot had already been resold. Dumpit questioned the validity of the rescission of the contract with the NHA. NHA found the rescission void in the absence of either judicial or notarial demand, ordered Palay, Inc. and Alberto Onstott in his capacity as President of the corporation, jointly and severally, to refund immediately to Nazario Dumpit the amount of P13,722.50 . Issue: WON Onstott, as the President, should be solidarily liable with Palay Inc to refund the amount Held: No. Only Palay Inc should refund the payment made by Dumpit

It is important to note that even though there has been a stipulation of automatic rescission of the contract in case of default of payment of installments, still, a notice should be given. This was not done in the case at bar. It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as when as from that of any other legal entity to which it may be related. As a general rule, a corporation may not be made to answer for acts or liabilities of its stockholders or those of the legal entities to which it may be connected and vice versa. However, the veil of corporate fiction may be pierced when it is used as a shield to further an end subversive of justice; or for purposes that could not have been intended by the law that created it; or to defeat public convenience, justify wrong, protect fraud, or defend crime or to perpetuate fraud or confuse legitimate issues; or to circumvent the law or perpetuate deception; or as an alter ego, adjunct or business conduit for the sole benefit of the stockholders. We find no badges of fraud on petitioners' part. They had literally relied, albeit mistakenly, on paragraph 6 of its contract with private respondent when it rescinded the contract to sell extrajudicially and had sold it to a third person. In this case, petitioner Onstott was made liable because he was then the President of the corporation and he was the controlling stockholder. No sufficient proof exists on record that said petitioner used the corporation to defraud private respondent. He cannot, therefore, be made personally liable just because he "appears to be the controlling stockholder". Mere ownership by a single stockholder or by another corporation is not of itself sufficient ground for disregarding the separate corporate personality. MAGLUTAC VS NLRC FACTS: Jose M. Maglutac was employed by Commart (Phils.), Inc sometime in February, 1980 and rose to become the Manager of its Energy Equipment Sales. On October 3, 1984, he received a notice of termination signed by Joaquin S. Cenzon, Vice-President General Manager and Corporate Secretary of CMS International, a corporation controlled by Commart. Thereafter, Jose Maglutac filed a complaint for illegal dismissal against Commart and Jesus T. Maglutac, President and Chairman of the Board of Directors of Commart. The complainant alleged that his dismissal was part of a vendetta drive against his parents who dared to expose the massive and fraudulent diversion of company funds to the company presidents private accounts, stressing that complainants efficiency and effectiveness were never put to question when very suddenly he received his notice of termination. Commart and Jesus T. Maglutac, on the other hand, justified the dismissal for lack of trust and confidence brought about by complainant and his familys establishment of a company, MM International, in direct competition with Commart. Both parties filed their respective motions for reconsideration of the decision of the NLRC. Commart and Jesus T. Maglutac questioned the NLRCs finding that the complainant was dismissed without just cause. For his part, complainant questioned the decision insofar as it deleted the award of moral and exemplary damages and the nonholding of a joint and several liability of Jesus T. Maglutac and Commart. ISSUE: (2) RESPONDENT NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION AND CONTRAVENED EXISTING LAWS AND JURISPRUDENCE IN HOLDING THAT RESPONDENT JESUS T. MAGLUTAC SHOULD NOT HAVE BEEN HELD LIABLE IN SOLIDUM WITH THE RESPONDENT CORPORATION FOR HE IS MERELY A NOMINAL PARTY TO THE CASE AND MADE SO ONLY IN HIS CAPACITY AS PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS OF RESPONDENT CORPORATION, AND SIMPLY CANNOT BE HELD LIABLE FOR HIS CORPORATE ACT. HELD:

From the findings of the Labor Arbiter as affirmed by the NLRC, there is sufficient basis for an award of moral and exemplary damages in the instant case. The alleged loss of trust and confidence on complainant because of his familys establishment of MM International, a company allegedly in direct competition with Commart. Moreover, the complainant was dismissed without due process. His dismissal was made effective immediately and he was not given an opportunity to present his side. Where the employees dismissal was effected without procedural fairness, an award of exemplary damages in her favor can only be justified if her dismissal was affected in a wanton, oppressive or malevolent manner. The same circumstances obtain in the instant case in the light of the manifestation of Commart that it had become insolvent and that it had suspended operations. Moreover, not only was Jesus T. Maglutac the most ranking officer of Commart at the time of the termination of the complainant, it was likewise found that he had a direct hand in the latters dismissal. The Labor Arbiter therefore, correctly ruled that Jesus T. Maglutac was jointly and severally liable with Commart. Concept Builders Inc. vs. National Labor Relations Commission (NLRC, First Division) [GR 108734, 29 May 1996]First Division, Hermosisima Jr. (J): 4 concur Facts: Concept Builders, Inc., (CBI) a domestic corporation, with principal office at 355 Maysan Road,Valenzuela, Metro Manila, is engaged in the construction business while Norberto Marabe; Rodolfo Raquel,Cristobal Riego, Manuel Gillego, Palcronio Giducos, Pedro Aboigar, Norberto Comendador, Rogelio Salut,Emilio Garcia, Jr., Mariano Rio, Paulina Basea, Alfredo Albera, Paquito Salut, Domingo Guarino, RomeoGalve, Dominador Sabina, Felipe Radiana, Gavino Sualibio, Moreno Escares, Ferdinand Torres, FelipeBasilan, and Ruben Robalos were employed by said company as laborers, carpenters and riggers. OnNovember 1981, Marabe, et. al. were served individual written notices of termination of employment by CBI, effective on 30 November 1981. It was stated in the individual notices that their contracts of employment had expired and the project in which they were hired had been completed. The National Labor Relations Commission (NLRC) found it to be, the fact, however, that at the time of the termination of Marabe, et.al.'s employment, the project in which they were hired had not yet been finished and completed. CBI had to engage the services of sub-contractors whose workers performed the functions of Marabe, et. al. Aggrieved, Marabe, et. al. filed a complaint for illegal dismissal, unfair labor practice and non-payment of their legal holiday pay, overtime pay and thirteenth-month pay against CBI. On 19 December 1984, the Labor Arbiter rendered judgment ordering CBI to reinstate Marabe et. al. and to pay them back wages equivalent to 1 year or 300 working days. On 27 November 1985, the NLRC dismissed the motion for reconsideration filed by CBI on the ground that the said decision had already become final and executory. On 16 October 1986, the NLRC Research and Information Department made the finding that Marabe, et. al.'s back wages amounted to P199,800.00. On 29 October 1986, the Labor Arbiter issued a writ of execution directing the sheriff to execute the Decision, dated 19 December 1984. The writ was partially satisfied through garnishment of sums from CBI's debtor, the Metropolitan Waterworks and Sewerage Authority, in the amount of P81,385.34. Said amount was turned over to the cashier of the NLRC. On 1

February 1989, an Alias Writ of Execution was issued by the Labor Arbiter directing the sheriff to collect from CBI the sum of P117,414.76, representing the balance of the judgment award, and to reinstate Marabe, et. al. to their former positions. On 13 July 1989, the sheriff issued a report stating that he tried to serve the alias writ of execution on petitioner through the security guard on duty but the service was refused on the ground that CBI no longer occupied the premises. On 26 September 1986, upon motion of Marabe, et. al., the Labor Arbiter issued a second alias writ of execution. The said writ had not been enforced by the special sheriff because, as stated in his progress report dated 2 November 1989, that all the employees inside CBI's premises claimed that they were employees of Hydro Pipes Philippines, Inc. (HPPI) and not by CBI; that levy was made upon personal properties he found in the premises; and that security guards with high-powered guns prevented him from removing the properties he had levied upon. The said special sheriff recommended that a "break-open order" be issued to enable him to enter CBI's premises so that he could proceed with the public auction sale of the aforesaid personal properties on 7 November 1989. On 6 November 1989, a certain Dennis Cuyegkeng filed a third-party claim with the Labor Arbiter alleging that the properties sought to be levied upon by the sheriff were owned by HPPI, of which he is the Vice-President. On 23 November 1989, Marabe, et. al. filed a "Motion for Issuance of a Break-Open Order," alleging that HPPI and CBI were owned by the same incorporator/stockholders. They also alleged that petitioner temporarily suspended its business operations in order to evade its legal obligations to them and that Marabe, et. al. were willing to post an indemnity bond to answer for any damages which CBI and HPPI may suffer because of the issuance of the break-open order. On2 March 1990, the Labor Arbiter issued an Order which denied Marabe, et. al.'s motion for break-open order. Marabe, et. al. then appealed to the NLRC. On 23 April 1992, the NLRC set aside the order of the Labor Arbiter, issued a break-open order and directed Marabe, et. al. to file a bond. Thereafter, it directed the sheriff to proceed with the auction sale of the properties already levied upon. It dismissed the third-party claim for lack of merit. CBI moved for reconsideration but the motion was denied by the NLRC in a Resolution, dated 3December 1992. Hence, the petition. Issue: Whether the NLRC was correct in issuing the break-open order to levy the HPPI properties located atCBI amd/or HPPIs premises at 355 Maysan Road, Valenzuela, Metro Manila. Held: It is a fundamental principle of corporation law that a corporation is an entity separate and distinct from its stockholders and from other corporations to which it may be connected. But, this separate and distinct personality of a corporation is merely a fiction created by law for convenience and to promote justice. So, when the notion of separate juridical personality is used to defeat public convenience, justify wrong, protect MARVEL VS DAVID Facts: Upon consideration of the report with regards to the war profit tax case of Maria B. Castro, the Secretary of Finance recommended the collection of war profit taxes from the latter. Pursuant thereto, various properties including the Aguinaldo Building, Wise Building and Dewey Boulevard Padre Faura Mansion were seized by the CIR. An action was filed by the plaintiffs enjoining the defendant CIR from selling at public auction the three properties since it belong to Marvel Corporation and not to Maria B. Castro. Defendant claims that Maria B. Castro is the sole and true owner of all the subscribed stocks of the Marvel Corporation including those appearing to have been subscribed and paid for by

other members. CFI of Manila rendered judgment ordering the release of properties and enjoined CIR from selling the same. CIR appealed.

Issue: Whether or not Maria B. Castro is the owner of the share of stock of Marvel Building Corp.

Held: Yes. The CIR presented evidence to prove his claim that Maria B. Castro the sole and true owner of the share of stock Marvel Building Corp., this was the supposed endorsement in blank of the shares of stock in the name of other incorporators. This evidence was testified by Aquino, Internal Revenue examiner, Mariano, examiner and Crispin Llamado, undersecretary of Finance. Julio Llamado who was at that time the bookkeeper of Marvel Building Corp also testified that he was the one who had prepared the original certificates which was given by Maria for comparison with the Articles of Incorporation and that he also prepared a stock certificates which was copied in the Photostat presented in evidence.

CIR was also able to submit an evidence, is the fact that the other stockholder did not have incomes in such amounts during the time of the organization of the corporation in 1947 or immediately thereto, as to enable them to pay full for their supposed subscription and that this supposed subscribers fail to come to court to assert that they actually paid for their subscription and are not mere dummies. G.R. No. 125948Facts: Herein petitioner applied for a mayors permit to operate its pipeline concession. Before such permit was issued, the City treasurer required petitioner to pay local tax. In order not to hamper its operations, petitioner paid the tax under protest. Then the petitioner filed a letter protest addressed to the treasurer claiming exemption from payment of the tax because according to the Local Government Code of 1991, transportation contractors are not included in the enumeration of contractors which are liable to pay taxes. The city treasurer denied the protest. The petitioner filed a case before the trial court for tax refund, however it was subsequently dismissed. Hence, this petition. Issue: Whether or not the petitioner is a common carrier as contemplated to be exempted under the law. Held: The court rules the affirmative. The court enunciated the (4) tests in determining whether the carrier is that of a common carrier: a. must be engaged in the business of carrying goods for other as a public employment and must hold itself out as ready to engage in the transportation of goods generally as a business and not a casual occupationb.it must undertake to carry goods of the kind which its business is confined; c.it must undertake the method by which his business is conducted and over its establishedroads; d. the transportation must be for hire. In the case at bar, the court categorically ruled that the transporting of oil through pipelines is still considered to be an activity of a common carrier. The petitioner is a common carrier because it is engaged in the business of transporting passengers or goods; like petroleum. It undertakes to carry for all persons indifferently. The fact that the petitioner has limited clientele does not exclude it from the definition of common carrier. Under the petroleum act of the Philippines, the petitioner is considered a common carrier even if it is a pipeline concessionaire. And even as regards the petroleum operation, it is of

public utility. Specifically, the Bureau of Internal Revenue considers petitioners as common carrier not subject to withholding tax Azcor Manufacturing Inc. vs. NLRC [303 SCRA 26 (Feb 11 1999)] Piercing the Veil of Corporate Fiction to prevent evasion of obligations or confuse the legitimate issues Facts: Capulso filed with the Labor Arbiter a complaint for constructive illegal dismissal. He alleged that he worked for Azcor as ceramics worker for more than 2 years. Then, due to asthma, he filed a leave of absence. Upon returning to work, he was not permitted to do so. He later on amended his complaint and impleaded Filipinas Paso as additional respondent. On the other hand, Azcor contends that Capulso validly resigned from the company, as evidenced by a letter of resignation, for which Capulso then sought employment from Filipinas Paso, from which he also resigned. The Labor Arbiter dismissed the case. On appeal to the NLRC, it adjudged in favor of Capulso holding Filipinas Paso and Azcor solidarily liable. Hence, this petition with the SC. Issue: Whether or not Filipinas Paso may be held jointly and severally liable with Azcor for back wages of Capulso. Held: Yes. The doctrine that a corporation is a legal entity or a person in law distinct from the persons composing it is merely a legal fiction for purposes of convenience and to subserve the ends of justice. This fiction cannot be extended to a point beyond its reason and policy. Where, as in this case, the corporate fiction was used as a means to perpetrate a social injustice or as a vehicle to evade obligations or confuse the legitimate issues, it would be discarded and the 2 corporations would be merged as one, the first being merely considered as the instrumentality, agency, conduit, or adjunct of the other. In the case at bar, there was much confusion as to the identity of Capulsos employer, but, for sure, it was Filipinas Paso and Azcors own making. First, Capulso had no knowledge that he was already working under Filipinas Paso since he continued to retain his Azcor ID. Second, his pay slips contained the name of Azcor giving the impression that Azcor was paying his salary. Third, he was paid the same salary and he performed the same kind of job, in the same work area, in the same location, using the same tools and under the same supervisor.