cases under Corporate Juridical Personality

8/20/2019 cases under Corporate Juridical Personality

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1Corporate juridical personality

EN BANC

[G.R. No. 42780. January 7! "#$.%

&AN'(A GA) C*R+*RA,'*N! Plaintif-Appellant ! -. ,E

C*((EC,*R */ 'N,ERNA( REEN1E! Deendant-Appellee.

)((AB1)

1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF STATUTE; TIME OF RAISING QUESTION. — Where neither in the pleain!"#the e$i"i%n %& the trial $%'rt# n%r the a""i!n(ent %& err%r"# )a"the *'e"ti%n %& the +aliit, %& an a$t rai"e# an n% -'ri"i$ti%nali""'e ein! in+%l+e# it i" n%t the 't, %& the S'pre(e C%'rt t%pa"" %n the $%n"tit'ti%nal *'e"ti%n.

/. I0.; I0.; I0.; ACT N%. 231. 4ALI0ITY. — Q'er, a" t% )hether %rn%t A$t N%. 231 i" +ali.

. I0.; TA5ATION; O6LIGATION OF CONTRACTS. — A $%rp%rati%nha" a per"%nalit, i"tin$t &r%( that %& it" "t%$7h%ler"# enalin!the ta8in! p%)er t% rea$h the latter )hen the, re$ei+e i+ien"&r%( the $%rp%rati%n. 0i+ien" %& a %(e"ti$ $%rp%rati%n )hi$hare pai an eli+ere in $a"h t% &%rei!n $%rp%rati%n" a""t%$7h%ler" are "'-e$t t% the pa,(ent %& the in$%(e ta8# thee8e(pti%n $la'"e in the $harter %& the $%rp%rati%nn%t)ith"tanin!. 9:hilippine Teleph%ne an Tele!raph C%. +.C%lle$t%r %& Internal Re+en'e 1? :hil.# 33#2>2.2#)hi$h the plainti )a" re*'ire , the e&enant t% e'$t an)ithh%l &r%( the +ari%'" "'(" pai , it t% &%rei!n $%rp%rati%n"a" i+ien" an intere"t %n %n" an %ther inetene"" an)hi$h the plainti pai 'ner pr%te"t. On the trial $%'rti"(i""in! the $%(plaint# )ith $%"t"# the plainti appeale

a""i!nin! a" the prin$ipal err%r" alle!e t% ha+e een $%((ittethe &%ll%)in!D

H1. The trial $%'rt erre in h%lin! that the i+ien" pai , theplainti $%rp%rati%n )ere "'-e$t t% in$%(e ta8 in the han" %&it" "t%$7h%ler"# e$a'"e t% i(p%"e the ta8 there%n )%'l e t%i(p%"e a ta8 %n the plainti# in +i%lati%n %& the ter(" %& it"&ran$hi"e# an )%'l# (%re%+er# e %ppre""i+e an ine*'itale.

H/. The trial $%'rt erre in n%t h%lin! that the intere"t %n %n"an %ther inetene"" %& the plainti $%rp%rati%n# pai , it%'t"ie %& the :hilippine I"lan" t% $%rp%rati%n" n%t re"iin!therein# )ere n%t# %n the part %& the re$ipient" there% in$%(e&r%( :hilippine "%'r$e"# an hen$e n%t "'-e$t t% :hilippine

in$%(e ta8.H

The &a$t"# a" "tate , the appellant an a" a$$epte , theappellee# (a, e "'((ariBe a" &%ll%)"D The plainti i" a$%rp%rati%n %r!aniBe 'ner the la)" %& the :hilippine I"lan". It%perate" a !a" plant in the Cit, %& Manila an &'rni"he" !a""er+i$e t% the pe%ple %& the (etr%p%li" an "'rr%'nin!('ni$ipalitie" , +irt'e %& a &ran$hi"e !rante t% it , the

:hilippine G%+ern(ent. A""%$iate )ith the plainti are theI"lan" Ga" an Ele$tri$ C%(pan, %(i$ile in Ne) Y%r7# UniteState"# an the General Finan$e C%(pan, %(i$ile in 'ri$h#S)itBerlan. Neither %& the"e la"t (enti%ne $%rp%rati%n" i"re"ient in the :hilippine".

F%r the ,ear" 1


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/

/. In "'pp%rt %& it" "e$%n a""i!n(ent %& err%r# appellant$%nten" that# a" the I"lan" Ga" an Ele$tri$ C%(pan, an theGeneral Finan$e C%(pan, are %(i$ile in the Unite State" anS)itBerlan re"pe$ti+el,# an a" the intere"t %n the %n" an%ther inetene"" earne , "ai $%rp%rati%n" ha" een pai intheir re"pe$ti+e %(i$ile"# thi" i" n%t in$%(e &r%( :hilippine"%'r$e" )ithin the (eanin! %& the :hilippine In$%(e Ta8 La).

Citin! "e$ti%n" 1J 9a@ an 1 9e@ %& A$t N%. /?# the In$%(e Ta8La)# appellant a""ert" that their appli$ailit, ha" een "*'arel,eter(ine , e$i"i%n" %& thi" $%'rt in the $a"e" %& ManilaRailr%a C%. +. C%lle$t%r %& Internal Re+en'e 9N%. 11/@# )e nee %nl, %"er+e that the"e $a"e"ann%'n$e !%% la)# 't that ea$h $a"e ('"t e e$ie %n it"parti$'lar &a$t". In %ther )%r"# in the %pini%n %& the (a-%rit, %&the $%'rt# the &a$t" at ar an the &a$t" in th%"e $a"e" $an e$learl, ierentiate. Al"%# in the $a"e at ar there i" "%(e'n$ertainl, $%n$ernin! the pla$e %& pa,(ent# )hi$h 'ner %ne+ie) $%'l e $%n"iere the :hilippine" an 'ner an%ther +ie)the Unite State" an S)itBerlan# 't )hi$h $ann%t e enitel,eter(ine )ith%'t the ne$e""ar, %$'(entar, e+ien$e e&%re'".

The appr%+e %$trine i" that n% "tate (a, ta8 an,thin! n%t)ithin it" -'ri"i$ti%n )ith%'t +i%latin! the 'e pr%$e"" $la'"e %&the $%n"tit'ti%n. The ta8in! p%)er %& a "tate %e" n%t e8tene,%n it" territ%rial li(it"# 't )ithin "'$h li(it" it (a, ta8per"%n"# pr%pert,# in$%(e# %r '"ine"". I& an intere"t in pr%pert,i" ta8e# the "it'" %& either the pr%pert, %r intere"t ('"t e&%'n )ithin the "tate. I& an in$%(e i" ta8e# the re$ipientthere%& ('"t ha+e a %(i$ile )ithin the "tate %r the pr%pert, %r'"ine"" %'t %& )hi$h the in$%(e i""'e" ('"t e "it'ate )ithinthe "tate "% that the in$%(e (a, e "ai t% ha+e a "it'" therein.:er"%nal pr%pert, (a, e "eparate &r%( it" %)ner an he (a,e ta8e %n it" a$$%'nt at the pla$e )here the pr%pert, i"

alth%'!h it i" n%t a $itiBen %r re"ient %& the "tate )hi$h i(p%"e"the ta8. 6't et" %)in! , $%rp%rati%n" are %li!ati%n" %& theet%r"# an %nl, p%""e"" +al'e in the han" %& the $reit%r".9Far(er" L%an C%. +. Minne"%ta 1 Wall.# JJ; 6'$7 +. 6ea$h1? :hil.# 3


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ee" %& tr'"t# n%te"# %r %ther intere"tearin! %li!ati%n" %& a%(e"ti$ %r re"ient &%rei!n $%rp%rati%n# . . .H The in$%(eeri+e &r%( the intere"t %n %n" an %ther inetene"" %& theappellant $%rp%rati%n# i" $learl, )ithin the p'r+ie) %& the "tat'te.

The p%)er %& the le!i"lat're t% i(p%"e "'$h a ta8 ('"t ere$%!niBe. A" "tate , K'"ti$e 6rale, in Unite State" +. ErieR. C% 91J3 U. S.# /2; /2 La). e.# 1>1# 1>@D H. . . The ta8 lai'p%n their %n" )a" intene t% ae$t the %)ner" %& the %n"#

an )hil"t the $%(panie" )ere ire$te t% pa, it# the, )erea'th%riBe t% retain the a(%'nt &r%( the in"tall(ent" 'e t% the%nh%ler"# )hether $itiBen" %r alien". The %-e$ti%n thatC%n!re"" ha n% p%)er t% ta8 n%nre"ient alien"# i" (et , the&a$t that the ta8 )a" n%t a""e""e a!ain"t the( per"%nall,# 'ta!ain"t the re(# the $reit# the et 'e t% the(. C%n!re"" ha"the ri!ht t% ta8 all pr%pert, )ithin the -'ri"i$ti%n %& the UniteState"# )ith $ertain e8$epti%n" n%t ne$e""ar, t% e n%te. The(%ne, 'e t% n%nre"ient %nh%ler" in thi" $a"e )a" in theUnite State" — in the han" %& the $%(pan, — e&%re it $%'le tran"(itte t% L%n%n# %r %ther pla$e )here the %nh%ler"re"ie. Whil"t here it )a" liale t% ta8ati%n. C%n!re""# , theinternal re+en'e la)# , )a, %& ta8# "t%ppe a part %& the (%ne,e&%re it" tran"(i""i%n# na(el,D > per $ent %& it. :la'"ile

!r%'n" &%r le+,in! "'$h a ta8 (i!ht e a""i!ne. It (i!ht e"ai that the $reit%r i" pr%te$te , %'r la)" in the en-%,(ent%& the et; that the )h%le (a$hiner, %& %'r $%'rt" an theph,"i$al p%)er %& the !%+ern(ent are pla$e at hi" i"p%"al &%rit" "e$'rit, an $%lle$ti%n.H

A4ANCEA# C.J.# i""entin!D

I % n%t a!ree )ith the (a-%rit, %pini%n )ith re"pe$t t% theappellant" "e$%n a""i!n(ent %& err%r# )hi$h in (, %pini%n"h%'l e "'"taine. The *'e"ti%n in+%l+e in thi" err%r ha" een$learl, e$ie , thi" $%'rt in the $a"e %& Manila Railr%a C%. +.C%lle$t%r %& Internal Re+en'e 9G. R. N%. 11th a, %& Kan'ar, %& ea$h,ear pa, t% the Cit, %& Manila an t% the ('ni$ipalitie" in the:r%+in$e %& RiBal in )hi$h !a" i" "%l# t)% an %nehal& per$ent'( %& the !r%"" re$eipt" )ithin "ai $it, an ('ni$ipalitie"#re"pe$ti+el,# 'rin! the pre$ein! ,ear. Sai pa,(ent "hall e inlie' %& all ta8e"# In"'lar# pr%+in$ial an ('ni$ipal# e8$ept ta8e"%n the real e"tate# 'ilin!"# plant# (a$hiner,# an %therper"%nal pr%pert, el%n!in! t% the !rantee.H

Thi" &ran$hi"e i" a $%ntra$t et)een the G%+ern(ent an the!rantee" there% )h%"e ri!ht" ha+e een a$*'ire , theplainti $%rp%rati%n. In Manila Railr%a C%. +. Raert, 9J :hil.#//# /J@# thi" $%'rt hel that.H . . On$e !rante# a $hartere$%(e" a pri+ate $%ntra$t . . .H Arti$le 1J?@# i" al(%"t in e8a$t parallel )ith the $a"e at ar. The &a$t" %&that $a"e )ere a" &%ll%)"D The Uni%n an :lanter" 6an7 %&Me(phi" )a" 'l, %r!aniBe 'ner the $harter !rante , theLe!i"lat're %& Tenne""ee# , t)% A$t"# re"pe$ti+el, ate Mar$h

/J# 1?>?# an Fer'ar, 1/# 1?3#JJJ# i+ie int% 3#2>J"hare" %& 1JJ ea$h. Farrin!t%n# the plainti in err%r# )a" the%)ner %& 1>J "hare"# %& the +al'e %& 1>#JJJ.

The tenth "e$ti%n %& the $harter %& the an7 e$lareD-!$D

HThat "ai C%(pan, "hall pa, t% the State an ann'al ta8 %& %nehal& %& %ne per $ent %n ea$h "hare %& the $apital "t%$7"'"$rie# )hi$h "hall e in lie' %& all %ther ta8e".H

The State %& Tenne""ee an the C%'nt, %& Shel,# $lai(in! theri!ht# 'ner the Re+en'e La)" %& the State# t% ta8 the "t%$7 %&the plainti in err%r# a "t%$7h%ler %& the an7# a""e""e anta8e it &%r the ,ear 1?2/. It )a" a""e""e at it" par +al'e. Theta8 i(p%"e , the State )a" &%rt, $ent" %n the 1JJ# (a7in!the $%'nt, ta8 13J. The $%'ntr, ta8 )a" 1./J %n the 1JJ#(a7in! the $%'ntr, ta8 1?J.

The plainti in err%r enie the ri!ht %& the State an C%'nt, t%i(p%"e the"e ta8e". e $lai(eD

91@ That the 1Jth "e$ti%n %& the $harter )a" a $%ntra$t et)eenthe State an the 6an7;

9/@ That an, %ther ta8 than that therein "pe$ie )a" e8pre""l,&%rien; an

9@ That the re+en'e la)" i(p%"in! the ta8e" in *'e"ti%ni(paire the %li!ati%n %& the $%ntra$t.

The S'pre(e C%'rt %& Tenne""ee a-'!e the ta8e" t% e +alian the plainti in err%r there'p%n re(%+e the $a"e t% theFeeral S'pre(e C%'rt &%r re+ie).

In 'ph%lin! all %& the $%ntenti%n" %& the plainti in err%r# anpr%n%'n$in! in+ali the ta8e" in+%l+e a" i(pairin! the%li!ati%n %& the $%ntra$t $reate , the &ran$hi"e# the UniteState" S'pre(e C%'rt "aiD

HThi" $a"e t'rn" 'p%n the $%n"tr'$ti%n t% e !i+en t% the 1Jth"e$ti%n %& the $harter %& the an7. . . .

x x x

HWhen thi" $harter )a" !rante# the State (i!ht ha+e een"ilent a" t% ta8ati%n. In that $a"e# the p%)er )%'l ha+e een'n&ettere. 967. +. 6illin!"# :et.# >1.@ It (i!ht ha+e re"er+ethe p%)er a" t% "%(e thin!"# an ,iele it a" t% %ther". It hathe p%)er t% (a7e it" %)n ter(" %r t% re&'"e the $harter. It

$h%"e t% "tip'late &%r a "pe$ie ta8 %n the "hare"# an e$larean %'n it"el& that thi" ta8 "h%'l e in lie' %& all %ther ta8e".

HThere i" n% *'e"ti%n e&%re '" a" t% the ta8 i(p%"e %n the"hare" , the $harter. 6't the State ha" , her re+en'e la)i(p%"e an%ther an an aiti%nal ta8 %n the"e "a(e "hare".

Thi" i" %ne %& th%"e %ther ta8e" )hi$h it ha "tip'late t%&%re!%. The ientit, %& the thin! %'l, ta8e i" n%t ae$te ,the &a$t that in %ne $a"e the ta8 i" t% e pai +i$ari%'"l, , thean7# an in the %ther , the %)ner %& the "hare hi("el&. Thethin! th'" ta8e i" "till the "a(e# an the "e$%n ta8 i" e8pre""l,&%rien , the $%ntra$t %& the partie". A&ter the (%"t $are&'l$%n"ierati%n# )e $an $%(e t% n% %ther $%n$l'"i%n. S'$h# )ethin7# ('"t ha+e een the 'ner"tanin! an intent %& the

partie" )hen the $harter )a" !rante an the an7 )a"%r!aniBe. An, %ther +ie) )%'l i!n%re the $%+enant that theta8 "pe$ie "h%'l e in lie' %& all %ther ta8e". It )%'l l%tth%"e ter(" &r%( the $%nte8t# an $%n"tr'e it a" i& the, )ere n%ta part %& it. . . .

x x x

HThe e$ree %& the S'pre(e C%'rt %& Tenne""ee i" re+er"e anthe $a"e )ill e re(ane# )ith ire$ti%n" t% enter a e$ree in&a+%r %& the plainti in err%r.H 9Farrin!t%n +. Tenne""ee# U. S.#323J# >31.@

That $a"e# it )ill e %"er+e# i" al(%"t in e8a$t parallel )ith the


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$a"e at ar. 6%th $a"e" eal )ith ta8 $%(('tati%n pr%+ie &%rin a &ran$hi"e !rante , the State. In %th $a"e" the State$%+enante that the ta8 "pe$ie in the &ran$hi"e "h%'l e inlie' %& all %ther ta8e". In %th $a"e" the aiti%nal ta8 )hi$h theta8 a'th%ritie" "%'!ht t% i(p%"e )a" a re+en'e ta8. In %th$a"e" the ta8 pr%+ie &%r in the &ran$hi"e )a" pai , the$%rp%rati%n# an the ta8 )hi$h the a'th%ritie" atte(pte t%$%lle$t )ere i(p%"e %n the "t%$7h%ler". In the Farrin!t%n $a"e

the pr%+i"i%n in the Feeral C%n"tit'ti%n that HN% State "hall . . .pa"" an, . . . la) i(pairin! the %li!ati%n %& $%ntra$t"H )a"applie; in thi" $a"e the pr%+i"i%n %& %'r Or!ani$ La) that Hn%la) i(pairin! the %li!ati%n %& $%ntra$t" "hall e ena$teH i"in+%l+e. It )ill e %"er+e# &'rther# that in the Farrin!t%n Ca"ethe &ran$hi"e )a" !rante t% a $%rp%rati%n# ,et the $%'rt helthat the $%(('tati%n pr%+i"i%n %& the &ran$hi"e e8tene t% theini+i'al "t%$7h%ler". In the $a"e at ar# )hile the plainti# thepre"ent %)ner %& the &ran$hi"e# i" a $%rp%rati%n# the %ri!inal!rantee" )ere nat'ral per"%n"; hen$e there i" (%re rea"%n &%rh%lin! in the pre"ent $a"e that the $%(('tati%n pr%+i"i%n in the&ran$hi"e !rante , the :hilippine G%+ern(ent "h%'l e8ten t%the "t%$7h%ler" %& plainti $%rp%rati%n.

The Farrin!t%n Ca"e# e$ie in 1?2?# )a" , a i+ie $%'rt.Ei!hteen ,ear" later — in 1?3#2>2.2.

EN BANC

[G.R. No. (82$. *cto5er #0! "$2.%

),*C6*(3ER) */ /. G1AN*N AN3 )*N)!

'NC.! Petitioners-Appellants! -. REG'),ER */ 3EE3) */

&AN'(A! Respondent-Appellee.

)((AB1)

1. COR:ORATIONS; LIQUI0ATION AN0 0ISTRI6UTION OF ASSETSFOR TRANSFER TO STOCOL0ERS; CERTIFICATE OFLIQUI0ATION IN TE NATURE OF TRANSFER OR CON4EYANCE. —Where the p'rp%"e %& the li*'iati%n# a" )ell a" the i"tri'ti%n%& the a""et" %& the $%rp%rati%n# i" t% tran"&er their title &r%( the$%rp%rati%n t% the "t%$7h%ler" in pr%p%rti%n t% their"hareh%lin!"# that tran"&er $ann%t e ae$te )ith%'t the$%rre"p%nin! ee %& $%n+e,an$e &r%( the $%rp%rati%n t% the

"t%$7h%ler"# an the $erti$ate "h%'l e $%n"iere a" %ne inthe nat're %& a tran"&er %r $%n+e,an$e.3 E C ' ) ' * N

On Septe(er 1


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>N. W. 2@. A "hare %& "t%$7 %nl, t,pie" an ali*'%t part %& the$%rp%rati%n" pr%pert,# %r the ri!ht t% "hare in it" pr%$ee" t%that e8tent )hen i"tri'te a$$%rin! t% la) an e*'it, 9all Fale, +. Alaa(a Ter(inal# 12 Ala.#


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3 The intere"t )hi$h entitle" a per"%n t% inter+ene in a "'itet)een %ther partie" ('"t e in the (atter in liti!ati%n an %&"'$h ire$t an i((eiate $hara$ter that the inter+en%r )illeither !ain %r l%"e , the ire$t le!al %perati%n an ee$t %& the

-'!(ent. Other)i"e# i& per"%n" n%t partie" %& the a$ti%n $%'le all%)e t% inter+ene# pr%$eein!" )ill e$%(e 'nne$e""aril,$%(pli$ate# e8pen"i+e an inter(inale. An thi" i" n%t thep%li$, %& the la). $

The )%r" Han intere"t in the "'-e$tH (ean a ire$t intere"t inthe $a'"e %& a$ti%n a" pleae# an )hi$h )%'l p't theinter+en%r in a le!al p%"iti%n t% liti!ate a &a$t alle!e in the$%(plaint# )ith%'t the e"tali"h(ent %& )hi$h plainti $%'l n%tre$%+er. 7

ere# the intere"t# i& it e8i"t" at all# %& petiti%ner"(%+ant" i"inire$t# $%ntin!ent# re(%te# $%n-e$t'ral# $%n"e*'ential an$%llateral. At the +er, lea"t# their intere"t i" p'rel, in$h%ate# %r in"heer e8pe$tan$, %& a ri!ht in the (ana!e(ent %& the$%rp%rati%n an t% "hare in the pr%t" there%& an in thepr%pertie" an a""et" there%& %n i""%l'ti%n# a&ter pa,(ent %&the $%rp%rate et" an %li!ati%n".

While a "hare %& "t%$7 repre"ent" a pr%p%rti%nate %r ali*'%tintere"t in the pr%pert, %& the $%rp%rati%n# it %e" n%t +e"t the%)ner there%& )ith an, le!al ri!ht %r title t% an, %& the pr%pert,#hi" intere"t in the $%rp%rate pr%pert, ein! e*'itale %rene$ial in nat're. Shareh%ler" are in n% le!al "en"e the%)ner" %& $%rp%rate pr%pert,# )hi$h i" %)ne , the $%rp%rati%na" a i"tin$t le!al per"%n. 8

:etiti%ner" &'rther $%nten that the a+ailailit, %& %therre(eie"# a" e$lare , the C%'rt %& appeal"# i" t%tall,i((aterial t% the a+ailailit, %& the re(e, %& inter+enti%n.

We $ann%t !i+e $reit t% "'$h a+er(ent. A" earlier "tate# thatthe (%+ant" intere"t (a, e pr%te$te in a "eparate pr%$eein!i" a &a$t%r t% e $%n"iere in all%)in! %r i"all%)in! a (%ti%n&%r inter+enti%n. It i" "i!ni$ant t% n%te at thi" -'n$t're that a"per re$%r"# there are &%'r penin! $a"e" in+%l+in! the partie"herein# en'(erate a" &%ll%)"D 1= Spe$ial :r%$eein!" N%.1//1// e&%re the CFI %& Manila# 6ran$h 55II# entitleHC%n$ep$i%n Ma!"a,"a,Lara%r# et al. +. S'i$ Lan C%rp.# etal.H# in+%l+in! the +aliit, %& the tran"&er , the late Genar%Ma!"a,"a, %& %nehal& %& hi" "hareh%lin!" in S'i$ LanC%rp%rati%n; /= Ci+il Ca"e N%. />22J e&%re the CFI %&a(ale"# 6ran$h III# HAelaia R%ri!'eBMa!"a,"a, +.:an!anian# et$.; C%n$ep$i%n Lara%r# et al. Inter+en%r"H#"ee7in! t% ann'l the p'rp%rte 0ee %& A""i!n(ent in &a+%r %&

SU6IC an it" ann%tati%n at the a$7 %& TCT N%. />? in thena(e %& re"p%nent" e$ea"e h'"an; = SEC Ca"e N%.JJ122J# le , re"p%nent pra,in!# a(%n! %ther thin!" that"he e e$lare in her $apa$it, a" the "'r+i+in! "p%'"e ana(ini"tratri8 %& the e"tate %& Genar% Ma!"a,"a, a" the "%le"'"$rier an "t%$7h%ler %& SU6IC. There# petiti%ner"# ,(%ti%n# "%'!ht t% inter+ene. Their (%ti%n t% re$%n"ier theenial %& their (%ti%n t% inter+ene )a" !rante; = S: N%. Q/32< e&%re the CFI %& RiBal# 6ran$h I4# petiti%ner" herein lin!a $%ntin!ent $lai( p'r"'ant t% Se$ti%n ># R'le ?3# Re+i"e R'le"%& C%'rt. " :etiti%ner" intere"t" are n% %'t a(pl, pr%te$te inthe"e $a"e".

Neither % )e len $reen$e t% petiti%ner" ar!'(ent that the,

are (%re intere"te in the %'t$%(e %& the $a"e than the$%rp%rati%na""i!nee# %)in! t% the &a$t that the latter i" )illin! t%$%(pr%(i"e )ith )i%)re"p%nent an "in$e a $%(pr%(i"ein+%l+e" the !i+in! %& re$ipr%$al $%n$e""i%n"# the %nl,$%n$ei+ale $%n$e""i%n the $%rp%rati%n (a, !i+e i" a t%tal %rpartial relin*'i"h(ent %& the $%rp%rate a""et". 0

S'$h $lai( all the (%re %l"ter" the $%ntin!ent nat're %&petiti%ner" intere"t in the "'-e$t %& liti!ati%n.

The &a$t'al nin!" %& the trial $%'rt are $lear %n thi" p%int. Thepetiti%ner" $ann%t $lai( the ri!ht t% inter+ene %n the "tren!th %&the tran"&er %& "hare" alle!el, e8e$'te , the late Senat%r. The

$%rp%rati%n i n%t 7eep %%7" an re$%r". :er&%r$e# n%tran"&er )a" e+er re$%re# ('$h le"" ee$te a" t% pre-'i$ethir partie". The tran"&er ('"t e re!i"tere in the %%7" %& the$%rp%rati%n t% ae$t thir per"%n". The la) %n $%rp%rati%n" i"e8pli$it. Se$ti%n 3 %& the C%rp%rati%n C%e pr%+ie"# th'"D HN%tran"&er# h%)e+er# "hall e +ali# e8$ept a" et)een the partie"#'ntil the tran"&er i" re$%re in the %%7" %& the $%rp%rati%n"h%)in! the na(e" %& the partie" t% the tran"a$ti%n# the ate %&

the tran"&er# the n'(er %& the $erti$ate %r $erti$ate" an then'(er %& "hare" tran"&erre.H

An e+en a""'(in! ar!'en% that there )a" a +ali tran"&er#petiti%ner" are n%nethele"" arre &r%( inter+enin! ina"('$h a"their ri!ht" $an e +entilate an a(pl, pr%te$te in an%therpr%$eein!.

WEREFORE# the in"tant petiti%n i" here, 0ENIE0. C%"t"a!ain"t petiti%ner".

SO OR0ERE0.

)EC*N3 3'')'*N

JAR3'NE 3A'E)! 'NC.! G.R. No. 4#8:etiti%ner#+er"'"

JRB REA(,! 'NC.!

Re"p%nent.

:r%('l!ateD K'l, 1># /JJ>8 8 3 E C ' ) ' * N

6e&%re '" i" a petiti%n &%r re+ie) %& the 0e$i"i%n1=

%& the C%'rt %& Appeal" 9CA@ in CAG.R. C4 N%. >/J1 ar(in! in toto that %& theRe!i%nal Trial C%'rt 9RTC@ in Ci+il Ca"e N%.


7/61

2that the ten,ear peri% %& pre"$ripti%n )a" &a"t appr%a$hin!# t%e8pire %n Mar$h 1# 1


8/61

?)ith plainti 9E8hiit 01@# a" )ell a" theAir$%n" letterhea %& Karine" 0ire$t%r anSeni%r 4i$e:re"ient A.G. M%rri"%n anAir$%n" :re"ient in hi" Mar$h /3# 1


9/61

<$%rp%rate $ti%n# in the a"en$e %& &ra' %r %ther p'li$ p%li$,$%n"ierati%n"./= 6't e+en )hen there i" %(inan$e %+er theaair" %& the "'"iiar,# the %$trine %& pier$in! the +eil %&$%rp%rate $ti%n applie" %nl, )hen "'$h $ti%n i" '"e t% e&eatp'li$ $%n+enien$e# -'"ti&, )r%n!# pr%te$t &ra' %r e&en $ri(e./>= T% )arrant re"%rt t% thi" e8tra%rinar, re(e,# there ('"t epr%%& that the $%rp%rati%n i" ein! '"e a" a $l%a7 %r $%+er &%r&ra' %r ille!alit,# %r t% )%r7 in-'"ti$e./3= An, pier$in! %& the

$%rp%rate +eil ha" t% e %ne )ith $a'ti%n./2= The )r%n!%in!('"t e $learl, an $%n+in$in!l, e"tali"he. It $ann%t -'"t epre"'(e./?=

In the in"tant $a"e# there i" n% e+ien$e that Air$%n )a"

&%r(e %r 'tiliBe )ith the intenti%n %& e&ra'in! it" $reit%r" %re+ain! it" $%ntra$t" an %li!ati%n". There )a" n%thin!&ra''lent in the a$t" %& Air$%n in thi" $a"e. Air$%n# a" a(an'&a$t'rin! r( %& air $%niti%ner"# $%(plie )ith it"%li!ati%n %& pr%+iin! t)% air $%niti%nin! 'nit" &%r the "e$%nP%%r %& the 6lan$% Center in !%% &aith# p'r"'ant t% it" $%ntra$t)ith the re"p%nent. Un&%rt'natel,# the per&%r(an$e %& the air$%niti%nin! 'nit" i n%t "ati"&, the re"p%nent e"pite "e+erala-'"t(ent" an $%rre$ti+e (ea"'re". In a Letter /


10/61

1J The &a$t" a" &%'n , the C%'rt %& Appeal" are a" &%ll%)"D

:laintiappellant San K'an Str'$t'ral an SteelFari$at%r"# In$." a(ene $%(plaint alle!e that %n1 Fer'ar, 1


11/61

11it" pr%pert, an a""et"# in$l'in! it"!%%)ill 888 )hen a'th%riBe ,the +%te %& the "t%$7h%ler"repre"entin! at lea"t t)% thir 9/@%& the %'t"tanin! $apital "t%$7 8 88.

N% "'$h +%te )a" %taine , e&enantNenita Lee Gr'ener! &%r that pr%p%"e"ale;= neither )a" there e+ien$e t% "h%)that the "'pp%"e tran"a$ti%n )a" ratie ,the $%rp%rati%n. :lainti "h%'l ha+e een%n the l%%7 %'t 'ner the"e$ir$'("tan$e". M%re "%# plainti hi("el&%)n"= "e+eral $%rp%rati%n" 9t"n ateA'!'"t 13# 1


12/61

1/SG0.= SG0.=

XXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXX 3=

In it" re$%'r"e e&%re the C%'rt %& Appeal"# petiti%nerin"i"teD

1. Appellant i" entitle t% $%(pel the appellee" t%e8e$'te a 0ee %& A"%l'te Sale in a$$%ran$e )iththe A!ree(ent %& Fer'ar, 1# 1


13/61

1

In the $a"e at ar# Re"p%nent M%t%ri$h $ate!%ri$all,enie" that it e+er a'th%riBe Nenita Gr'ener!# it" trea"'rer# t%"ell the "'-e$t par$el %& lan.1>= C%n"e*'entl,# petiti%ner hathe 'ren %& pr%+in! that Nenita Gr'ener! )a" in &a$ta'th%riBe t% repre"ent an in M%t%ri$h in thetran"a$ti%n. :etiti%ner &aile t% i"$har!e thi" 'ren. It" %er %&e+ien$e e&%re the trial $%'rt $%ntaine n% pr%%& %& "'$ha'th%rit,.13= It ha" n%t "h%)n an, pr%+i"i%n %& "ai re"p%nent"arti$le" %& in$%rp%rati%n# ,la)" %r %ar re"%l'ti%n t% pr%+e thatNenita Gr'ener! p%""e""e "'$h p%)er.

That Nenita Gr'ener! i" the trea"'rer %& M%t%ri$h %e" n%t&ree petiti%ner &r%( the re"p%n"iilit, %& a"$ertainin! the e8tent%& her a'th%rit, t% repre"ent the $%rp%rati%n. :etiti%ner $ann%ta""'(e that "he# , +irt'e %& her p%"iti%n# )a" a'th%riBe t% "ellthe pr%pert, %& the $%rp%rati%n. Sellin! i" %+i%'"l, &%rei!n t% a$%rp%rate trea"'rer" &'n$ti%n# )hi$h !enerall, ha" een

e"$rie a" t% re$ei+e an 7eep the &'n" %& the $%rp%rati%n#an t% i"'r"e the( in a$$%ran$e )ith the a'th%rit, !i+en hi(, the %ar %r the pr%perl, a'th%riBe %$er".12=

Neither )a" "'$h real e"tate "ale "h%)n t% e a n%r(al'"ine"" a$ti+it, %& M%t%ri$h. The pri(ar, p'rp%"e %& M%t%ri$h i"(ar7etin!# i"tri'ti%n# e8p%rt an i(p%rt in relati%n t% a !eneral(er$hani"in! '"ine"".1?= Un(i"ta7al,# it" trea"'rer i" n%t$l%a7e )ith a$t'al %r apparent a'th%rit, t% ', %r "ell realpr%pert,# an a$ti+it, )hi$h &all" )a, e,%n the "$%pe %& her!eneral a'th%rit,.

Arti$le" 1?2 an 1?2? %& the Ci+il C%e %& the :hilippine"pr%+ie"D

ART. 1?2. When a "ale %& a pie$e %& lan %r an,intere"t therein i" thr%'!h an a!ent# the a'th%rit, %&the latter "hall e in )ritin!; %ther)i"e# the "ale "halle +%i.

ART. 1?2? Spe$ial p%)er" %& att%rne, are ne$e""ar, inthe &%ll%)in! $a"eD

8 8 8 8 8 8 8 8 8

9>@ T% enter an, $%ntra$t , )hi$h the %)ner"hip %&an i((%+ale i" tran"(itte %r a$*'ire either!rat'it%'"l, %r &%r a +al'ale $%n"ierati%n;

8 8 8 8 8 8 8 8 8.

:etiti%ner &'rther $%nten" that Re"p%nent M%t%ri$h ha"ratie "ai $%ntra$t %& "ale e$a'"e %& it" a$$eptan$e %&enet"# a" e+ien$e , the re$eipt i""'e , Re"p%nentGr'ener!.1


14/61

1)eond# e+en i& the a%+e(enti%ne ar!'(ent )ere t% e

are""e at thi" ti(e# the C%'rt "till n" n% rea"%n t% 'ph%lit. Tr'e# %ne %& the a+anta!e" %& a $%rp%rate &%r( %& '"ine""%r!aniBati%n i" the li(itati%n %& an in+e"t%r" liailit, t% thea(%'nt %& the in+e"t(ent.J= Thi" &eat're P%)" &r%( the le!althe%r, that a $%rp%rate entit, i" "eparate an i"tin$t &r%( it""t%$7h%ler". %)e+er# the "tat't%ril, !rante pri+ile!e %& a$%rp%rate +eil (a, e '"e %nl, &%r le!iti(ate p'rp%"e".1= On

e*'itale $%n"ierati%n"# the +eil $an e i"re!are )hen it i"'tiliBe a" a "hiel t% $%((it &ra'# ille!alit, %r ine*'it,; e&eatp'li$ $%n+enien$e; $%n&'"e le!iti(ate i""'e"; %r "er+e a" a(ere alter e!% %r '"ine"" $%n'it %& a per"%n %r anin"tr'(entalit,# a!en$, %r a-'n$t %& an%ther $%rp%rati%n./=

Th'"# the C%'rt ha" $%n"i"tentl, r'le that )=hen the$ti%n i" '"e a" a (ean" %& perpetratin! a &ra' %r an ille!al a$t%r a" a +ehi$le &%r the e+a"i%n %& an e8i"tin! %li!ati%n# the$ir$'(+enti%n %& "tat'te"# the a$hie+e(ent %r per&e$ti%n %& a(%n%p%l, %r !enerall, the perpetrati%n %& 7na+er, %r $ri(e# the+eil )ith )hi$h the la) $%+er" an i"%late" the $%rp%rati%n &r%(the (e(er" %r "t%$7h%ler" )h% $%(p%"e it )ill e li&te t%all%) &%r it" $%n"ierati%n (erel, a" an a!!re!ati%n %&ini+i'al".=

We "tre"" that the $%rp%rate $ti%n "h%'l e "et a"ie)hen it e$%(e" a "hiel a!ain"t liailit, &%r &ra'# ille!alit, %rine*'it, $%((itte %n thir per"%n". The *'e"ti%n %& pier$in!the +eil %& $%rp%rate $ti%n i" e""entiall,# then# a (atter %&pr%%&. In the pre"ent $a"e# h%)e+er# the C%'rt n" n% rea"%n t%pier$e the $%rp%rate +eil %& Re"p%nent M%t%ri$h. :etiti%ner'tterl, &aile t% e"tali"h that "ai $%rp%rati%n )a" &%r(e# %r

that it i" %perate# &%r the p'rp%"e %& "hielin! an, alle!e&ra''lent %r ille!al a$ti+itie" %& it" %$er" %r "t%$7h%ler"; %rthat the "ai +eil )a" '"e t% $%n$eal &ra'# ille!alit, %r ine*'it,at the e8pen"e %& thir per"%n"# li7e petiti%ner.

:etiti%ner $lai(" that M%t%ri$h i" a $l%"e $%rp%rati%n. Wer'le that it i" n%t. Se$ti%n


15/61

1>

:etiti%ner $all" %'r attenti%n t% the &%ll%)in! e8$erpt %& thetran"$ript %& "ten%!raphi$ n%te"9TSN@D

Q 0i ,%' e+er repre"ent t% Mr. C% that ,%' )ere a'th%riBe, the $%rp%rati%n t% "ell the pr%pert,

A Ye"# "ir.>=

:etiti%ner $lai(" that the an")er Ye" )a" $r%""e %'t# an#in it" pla$e )a" )ritten a N% )ith an initial "$rile a%+e it.3= Thi"# h%)e+er# i" in"'$ient t% pr%+e that Nenita Gr'ener!)a" a'th%riBe t% repre"ent Re"p%nent M%t%ri$h in the "ale %&it" i((%+ale pr%pert,. Sai e8$erpt "h%'l e 'ner"t%% in the$%nte8t %& her )h%le te"ti(%n,. 0'rin! her $r%""e8a(inati%n#

Re"p%nent Gr'ener! te"tieD

Q S%# ,%' "i!ne in ,%'r $apa$it, a" the trea"'rer

A= Ye"# "ir.

Q E+en then ,%' 7ne=) all al%n! that ,%' )ere= n%ta'th%riBe

A Ye"# "ir.

Q Y%' "tate %n ire$t e8a(inati%n that ,%' i n%t repre"entthat ,%' )ere a'th%riBe t% "ell the pr%pert,

A Ye"# "ir.

Q 6't ,%' al"% i n%t "a, that ,%' )ere n%t a'th%riBe t%"ell the pr%pert,# ,%' i n%t tell that t% Mr. C%# i" that$%rre$t

A That )a" n%t a"7e %& (e.

Q Ye"# -'"t an")er it.

A I -'"t t%l the( that I )a" the trea"'rer %& the $%rp%rati%nan it )a"= al"% the pre"ient )h% )a"= al"%a'th%riBe t% "i!n %n ehal& %& the $%rp%rati%n.

Q Y%' i n%t "a, that ,%' )ere n%t a'th%riBe n%r i ,%'"a, that ,%' )ere a'th%riBe

A Mr. C% )a" +er, intere"te t% p'r$ha"e the pr%pert, an he%ere t% p't 'p a :1JJ#JJJ.JJ earne"t (%ne, at thatti(e. That )a" %'r r"t (eetin!.2=

Clearl, then# Nenita Gr'ener! i n%t te"ti&, that M%t%ri$hha a'th%riBe her t% "ell it" pr%pert,. On the %ther han# herte"ti(%n, e(%n"trate" that the pre"ient %& :etiti%nerC%rp%rati%n# in hi" !reat e"ire t% ', the pr%pert,# thre)$a'ti%n t% the )in , %erin! an pa,in! the earne"t (%ne,)ith%'t r"t +eri&,in! Gr'ener!" a'th%rit, t% "ell the l%t.

/ourt: 'ssue@

Damages and Attorneys %ees

Finall,# petiti%ner pra," &%r a(a!e" an att%rne," &ee"#alle!in! that i=n an 'tter i"pla, %& (ali$e an a &aith#r=e"p%nent" atte(pte an "'$$eee in i(pre""in! %n thetrial $%'rt an the= C%'rt %& Appeal" that Gr'ener! i n%trepre"ent her"el& a" a'th%riBe , Re"p%nent M%t%ri$h e"pitethe re$eipt i""'e , the &%r(er "pe$i$all, ini$atin! that "he)a" "i!nin! %n ehal& %& M%t%ri$h Sale" C%rp%rati%n. Re"p%nentM%t%ri$h li7e)i"e a$te in a &aith )hen it $lai(e it i n%ta'th%riBe Re"p%nent Gr'ener! an that the $%ntra$t )a"= n%tinin!# in"%&ar= a" it )a"= $%n$erne# e"pite re$eipt anen-%,(ent %& the pr%$ee" %& Gr'ener!" a$t.?= A""'(in! thatRe"p%nent M%t%ri$h )a" n%t a part, t% the alle!e &ra'#petiti%ner (aintain" that Re"p%nent Gr'ener! "h%'l e helliale e$a'"e "he a$te &ra''lentl, an in a &aith in=repre"entin! her"el& a" 'l, a'th%riBe , R=e"p%nentC=%rp%rati%n.


16/61

13"he re$ei+e a" earne"t (%ne,# a" n% %ne "hall enri$h hi("el& atthe e8pen"e %& an%ther#>= a prin$iple e(%ie in Arti$le /1> %& the Ci+il C%e.>>= Alth%'!h there )a" n% inin! relati%n et)eenthe(# petiti%ner pai Gr'ener! %n the (i"ta7en elie& that "heha the a'th%rit, t% "ell the pr%pert, %& M%t%ri$h.>3= Arti$le /1>>%& the Ci+il C%e pr%+ie" that p=a,(ent , rea"%n %& a (i"ta7ein the $%n"tr'$ti%n %r appli$ati%n %& a i$'lt *'e"ti%n %& la)(a, $%(e )ithin the "$%pe %& the pre$ein! arti$le.

?ERE/*RE# the petiti%n i" here, DENIED an thea""aile 0e$i"i%n i" A((IR-ED.

)* *R3ERE3.

FIRST 0I4ISION

616AN 'N,ERNA,'*NA(C*R+*RA,'*N!

:etiti%ner# +er"'"

*N. A&*R REE)! in :ercapacity as +residin> Jud>e

o= t:e Re>ional ,rial Court

o= &anila! Branc: 2! and

R*&E* &. &*RA(E)! doin>

5usiness under t:e na9e

and style R& &orales

,rop:ies and +laues!

Re"p%nent".

:r%('l!ateD

Septe(er /


17/61

121. e&enant '7an# In$. an ne)l, $reate

'7an Internati%nal C%rp. a" %ne anthe "a(e $%rp%rati%n;

/. the le+, (ae %n the pr%pertie" %& '7anInternati%nal C%rp. i" here, +ali;

. '7an Internati%nal C%rp. an Mi$hael Chan

are -%intl, an "e+erall, liale t% pa,the a(%'nt a)are t% plaintip'r"'ant t% the e$i"i%n %& N%+e(er/?=# /JJ/ )hi$h ha" l%n! een nalan e8e$'t%r,.

SO OR0ERE0.

Fr%( the a%+e %rer# IC (%+e 't )a" enie re$%n"ierati%nin an%ther Orer ate K'ne 2# /JJ2. IC )ent t% the CA %n a petiti%n &%r $erti%rari t% n'lli&, thea&%re"ai Mar$h 1/ an K'ne 2# /JJ2 RTC Orer".

On Kan'ar, /# /JJ?# the CA renere the a""ailee$i"i%n# the i"p%"iti+e p%rti%n %& )hi$h "tate"D

WEREFORE# pre(i"e" $%n"iere# the petiti%ni" here, 0ENIE0 an the a""aile Orer"ate Mar$h 1/# /JJ2 an K'ne 2# /JJ2 %& the$%'rt a !"o are %th AFFIRME0. N% $%"t".

SO OR0ERE0.11=

The CA later enie IC" (%ti%n &%r re$%n"ierati%n in thea""aile re"%l'ti%n. en$e# the in"tant petiti%n &%r re+ie)# )ith the &%ll%)in! i""'e"

IC rai"e" &%r the C%'rt" $%n"ierati%nD 1. There i" n% le!al a"i" &%r the CA= t%

re"%l+e an e$lare that petiti%ner"C%n"tit'ti%nal Ri!ht t% 0'e :r%$e"" )a"n%t +i%late , the p'li$ re"p%nent inrenerin! the Orer" ate Mar$h 1/#/JJ2 an K'ne 2# /JJ2 an in e$larin!petiti%ner t% e liale &%r the -'!(ent%li!ati%n" %& the $%rp%rati%n '7an# In$.t% pri+ate re"p%nent a" petiti%ner i" a"tran!er t% the $a"e an )a" ne+er (aea part, in the $a"e e&%re the trial $%'rtn%r )a" it e+er "er+e a "'((%n" an a$%p, %& the $%(plaint.

/. There i" n% le!al a"i" &%r the CA= t%re"%l+e an e$lare that the Orer" ateMar$h 1/# /JJ2 an K'ne 2# /JJ2 renere, p'li$ re"p%nent e$larin! thepetiti%ner liale t% the -'!(ent%li!ati%n" %& the $%rp%rati%n '7an# In$.t% pri+ate re"p%nent are +ali a" "ai%rer" %& the p'li$ re"p%nent (%i&,an%r a(en the trial $%'rt" nal ane8e$'t%r, e$i"i%n renere %n N%+e(er/?# /JJ/.

. There i" n% le!al a"i" &%r the CA= t%

re"%l+e an e$lare that the Orer" ateMar$h 1/# /JJ2 an K'ne 2# /JJ2 renere, p'li$ re"p%nent e$larin! thepetiti%ner IC= an the $%rp%rati%n '7an#In$. a" %ne an the "a(e# an# there&%re#the 4eil %& C%rp%rate Fi$ti%n et)een the(e pier$e a" the pr%$e're 'nerta7en ,p'li$ re"p%nent )hi$h the CA= 'phel i"n%t "an$ti%ne , the R'le" %& C%'rtan%r e"tali"he -'ri"pr'en$een'n$iate , thi" %n%rale S'pre(eC%'rt.1/=

In !i"t# the i""'e" t% e re"%l+e %il %)n t% the*'e"ti%n % *rst # )hether the trial $%'rt $an# a&ter the -'!(enta!ain"t '7an# In$. ha" attaine nalit,# e8e$'te it a!ain"t thepr%pert, %& IC; seond# )hether the trial $%'rt a$*'ire

-'ri"i$ti%n %+er IC; an t%ird# )hether the trial an appellate$%'rt" $%rre$tl, applie# 'ner the pre(i"e"# the prin$iple %&pier$in! the +eil %& $%rp%rate $ti%n.

,:e Rulin> o= t:e Court

The petiti%n i" (erit%ri%'". /irst 'ssue@ A>ainst ?:o9 Can a /inal and

E9ent Be E


18/61

1? 0eepl, in!raine in %'r -'ri"pr'en$e

i" the prin$iple that a decision t:at :asacuired nality 5eco9es i99uta5le and

unaltera5le. A" "'$h# it 9ay no lon>er 5e9odied in an, re"pe$t e+en i& the(%i$ati%n i" (eant t% $%rre$t err%ne%'"$%n$l'"i%n" %& &a$t %r la) an )hether it )ill e

(ae , the $%'rt that renere it %r , thehi!he"t $%'rt %& the lan. 8 8 8

The %$trine %& nalit, %& -'!(ent i"

!r%'ne %n the &'na(ental prin$iple %&p'li$ p%li$, an "%'n pra$ti$e that# at theri"7 %& %$$a"i%nal err%r# the -'!(ent %& $%'rt"an the a)ar %& *'a"i-'i$ial a!en$ie" ('"te$%(e nal %n "%(e enite ate 8e ,la). ,:e only e Jurisdiction

o-er 6'C

The ne8t i""'e t'rn" %n the +aliit, %& the e8e$'ti%n the trial$%'rt a'th%riBe a!ain"t IC an it" pr%pert,# !i+en that it )a"neither (ae a part, n%r i(pleae in Ci+il Ca"e N%. : t:e ser-ice o= su99ons

upon t:e9 or t:rou>: t:eir -oluntary

appearance in court and t:eir su59ission

to its aut:ority. 9E(pha"i" "'pplie.@ In the &airl, re$ent Pal#a v. Galvez #/= the C%'rt reiterate it"

h%lin! in Orion )e"rit Corporation# "tatin!D I=n $i+il $a"e"# thetrial $%'rt a$*'ire" -'ri"i$ti%n %+er the per"%n %& the e&enanteither , the "er+i$e %& "'((%n" %r , the latter" +%l'ntar,appearan$e an "'(i""i%n t% the a'th%rit, %& the &%r(er.

The $%'rt" -'ri"i$ti%n %+er a part,e&enant re"'ltin! &r%( hi"+%l'ntar, "'(i""i%n t% it" a'th%rit, i" pr%+ie 'ner Se$. /J#R'le 1 %& the R'le"# )hi$h "tate"D

Se$ti%n /J. Vol"ntar appearane. The e&enant" +%l'ntar, appearan$e in thea$ti%n" "hall e e*'i+alent t% "er+i$e %&"'((%n". The in$l'"i%n in a (%ti%n t% i"(i""%& %ther !r%'n" a"ie &r%( la$7 %& -'ri"i$ti%n%+er the per"%n %& the e&enant "hall n%t eee(e a +%l'ntar, appearan$e.

T% e "'re# the CA" r'lin! that an, &%r( %& appearan$e

, the part, %r it" $%'n"el i" ee(e a" +%l'ntar, appearan$en" "'pp%rt in the 7inre Rep"+li v. /er 2 Co., Ltd./>= an De-idel v. (erandos./3=

Rep"+li an De -idel # h%)e+er# ha+e alrea, een

(%ie i& n%t alt%!ether "'per"ee/2= , La Naval Dr"Corporation v. Co"rt o' Appeals#/?=)herein the C%'rt e""entiall,r'le an el'$iate %n the $'rrent +ie) in %'r -'ri"i$ti%n# t%)itD A= "pe$ial appearan$e e&%re the $%'rt$hallen!in! it"

-'ri"i$ti%n %+er the per"%n thr%'!h a (%ti%n t% i"(i"" e+en i&the (%+ant in+%7e" %ther !r%'n"i" n%t tanta(%'nt t% e"t%ppel

%r a )ai+er , the (%+ant %& hi" %-e$ti%n t% -'ri"i$ti%n %+er hi"per"%n; an "'$h i" n%t $%n"tit'ti+e %& a +%l'ntar, "'(i""i%n t%the -'ri"i$ti%n %& the $%'rt./


19/61

1<ierent entit, an ha" a "eparate le!al per"%nalit, &r%( '7an#In$. An IC )%'l $%n"i"tentl, reiterate thi" a""erti%n in all it"pleain!"# th'" ee$ti+el, re"i"tin! all al%n! the RTC" -'ri"i$ti%n%& it" per"%n. It $ann%t e %+ere(pha"iBe that IC $%'l n%t lee&%re the RTC a (%ti%n t% i"(i"" an it" atta$h(ent" in Ci+ilCa"e N%. = 8 8 8 9E(pha"i" "'pplie.@

The i(pli$ati%n %& the a%+e $%((ent i" t)%&%lD 91@ the $%'rt('"t r"t a$*'ire -'ri"i$ti%n %+er the $%rp%rati%n %r$%rp%rati%n" in+%l+e e&%re it" %r their "eparate per"%nalitie"are i"re!are; an 9/@ the %$trine %& pier$in! the +eil %&$%rp%rate entit, $an %nl, e rai"e 'rin! a &'lll%)n trial %+era $a'"e %& a$ti%n 'l, $%((en$e in+%l+in! partie" 'l, r%'!ht'ner the a'th%rit, %& the $%'rt , )a, %& "er+i$e %& "'((%n" %r)hat pa""e" a" "'$h "er+i$e.

The i""'e %& -'ri"i$ti%n %r the la$7 %& it %+er IC ha" alrea,een i"$'""e. Anent the (atter %& the ti(e an (anner %&

rai"in! the prin$iple in *'e"ti%n# it i" 'ni"p'te that n% &'lll%)n trial in+%l+in! IC )a" ha )hen the RTC i"re!are the$%rp%rate +eil %& IC. The rea"%n &%r thi" a$t'alit, i" "i(ple an'ni"p'teD IC )a" n%t i(pleae in Ci+il Ca"e N%.


20/61

/JGenerally! a 9otion is appropriate

only in t:e a5sence o= re9edies 5y

re>ular pleadin>s! and is not a-aila5le to

settle i9portant uestions o= la! or to

dispose o= t:e 9erits o= t:e case. A

9otion is usually a proceedin> incidental

to an action# 't it (a, e a )h%ll, i"tin$t %rinepenent pr%$eein!. A (%ti%n in thi"

"en"e i" n%t )ithin thi" i"$'""i%n e+en th%'!hthe relie& e(ane i" en%(inate an %rer.

A (%ti%n !enerall, relate" t%

pr%$e're an i" %&ten re"%rte t% in %rer t%$%rre$t err%r" )hi$h ha+e $rept in al%n! theline %& the prin$ipal a$ti%n" pr%!re"".Generall,#)here there i" a pr%$e'ral e&e$t in apr%$eein! an n% (eth% 'ner "tat'te %rr'le %& $%'rt , )hi$h it (a, e $alle t% theattenti%n %& the $%'rt# a (%ti%n i" anappr%priate re(e,. In (an, -'ri"i$ti%n"# the(%ti%n ha" repla$e the $%((%nla) plea"te"tin! the "'$ien$, %& the pleain!"# an

+ari%'" $%((%nla) )rit"# "'$h a" )rit %& err%r$%ra( n%i" an a'ita *'erela. In "%(e$a"e"# a (%ti%n (a, e %ne %& "e+eralre(eie" a+ailale. F%r e8a(ple# in "%(e

-'ri"i$ti%n"# a (%ti%n t% +a$ate an %rer i" are(e, alternati+e t% an appeal there&r%(.

Stat'te" !%+ernin! (%ti%n" are !i+en

a lieral $%n"tr'$ti%n.3= 9E(pha"i" "'pplie.@

The %tt%( line i""'e %& )hether M%rale" $an pr%$ee a!ain"tIC &%r the -'!(ent et %& '7an# In$.a""'(in! h,p%theti$all,that he $an# appl,in! the pier$in! the $%rp%rate +eilprin$iplere"%l+e" it"el& int% the *'e"ti%n %& )hether a (ere

(%ti%n i" the appr%priate +ehi$le &%r "'$h p'rp%"e. 4eril,# M%rale" e"p%'"e" the appli$ati%n %& the prin$iple %&pier$in! the $%rp%rate +eil t% h%l IC liale %n the%r, that'7an# In$. )a" %'t t% e&ra' hi( thr%'!h the '"e %& the"eparate an i"tin$t per"%nalit, %& an%ther $%rp%rati%n# IC. Innet ee$t# M%rale" a+erte (%ti%n t% pier$e the +eil %&$%rp%rate $ti%n ate Kan'ar, # /JJ2 "tate a ne) $a'"e %&a$ti%n# i.e.# &%r the liailit, %& -'!(ent et%r '7an# In$. t% e%rne , IC %n the alle!e ientit, %& the t)% $%rp%rati%n". Thi"ne) $a'"e %& a$ti%n "h%'l e pr%perl, +entilate in an%ther$%(plaint an "'"e*'ent trial )here the %$trine %& pier$in! the$%rp%rate +eil $an# i& appr%priate# e applie# a"e %n thee+ien$e a'$e. E"tali"hin! the $lai( %& M%rale" an the$%rre"p%nin! liailit, %& IC &%r '7an In$." inetene"" $%'lharl, e the "'-e$t# 'ner the pre(i"e"# %& a (ere (%ti%ninterp%"e a&ter the prin$ipal a$ti%n a!ain"t '7an# In$. al%neha pere(pt%ril, een ter(inate. A&ter all# a $%(plaint i" %ne)here the plainti alle!e" $a'"e" %& a$ti%n. In an, e+ent# the prin$iple %& pier$in! the +eil %& $%rp%rate $ti%nn" n% appli$ati%n t% the in"tant $a"e. A" a !eneral r'le# $%'rt" "h%'l e )ar, %& li&tin! the $%rp%rate+eil et)een $%rp%rati%n"# h%)e+er relate. P%ilippine National&an0 v. Andrada Eletri Enineerin Co#pan 2= e8plain" )h,D

A $%rp%rati%n i" an arti$ial ein!

$reate , %perati%n %& la). 8 8 8 It ha" a

per"%nalit, "eparate an i"tin$t &r%( theper"%n" $%(p%"in! it# a" )ell a" &r%( an,%ther le!al entit, t% )hi$h it (a, erelate. Thi" i" a"i$.

E*'all, )ell"ettle i" the prin$iplethat the $%rp%rate (a"7 (a, e re(%+e %rthe $%rp%rate +eil pier$e )hen the$%rp%rati%n i" -'"t an alter e!% %& a per"%n %r%& an%ther $%rp%rati%n. F%r rea"%n" %& p'li$p%li$, an in the intere"t %& -'"ti$e# the$%rp%rate +eil )ill -'"tial, e i(pale %nl,

)hen it e$%(e" a "hiel &%r &ra'# ille!alit, %rine*'it, $%((itte a!ain"t thir per"%n".

ence! any application o= t:e

doctrine o= piercin> t:e corporate -eil

s:ould 5e done it: caution. A $%'rt "h%'le (in&'l %& the (ilie' )here it i" t% eapplie. 't 9ust 5e certain t:at t:e

corporate ction as 9isused to suc: aneainst anot:er! in disre>ard

o= its ri>:ts. ,:e ron>doin> 9ust 5e

clearly and con-incin>ly esta5lis:ed

F it

cannot 5e presu9ed. *t:erise! an

injustice t:at as ne-er unintended 9ay

result =ro9 an erroneous application.

Thi" C%'rt ha" pier$e the $%rp%rate

+eil t% )ar % a -'!(ent $reit# t% a+%iin$l'"i%n %& $%rp%rate a""et" a" part %& thee"tate %& the e$eent# t% e"$ape liailit,ari"in! &r%( a et# %r t% perpet'ate &ra'

an%r $%n&'"e le!iti(ate i""'e" either t%pr%(%te %r t% "hiel 'n&air %-e$ti+e" %r t%$%+er 'p an %ther)i"e latant +i%lati%n %& thepr%hiiti%n a!ain"t &%r'("h%ppin!. *nly int:ese and si9ilar instances 9ay t:e -eil

5e pierced and disre>arded. 9E(pha"i""'pplie.@

In ne# t% -'"ti&, the pier$in! %& the +eil %& $%rp%rate $ti%n# it

('"t e "h%)n , $lear an $%n+in$in! pr%%& that the "eparatean i"tin$t per"%nalit, %& the $%rp%rati%n )a" p'rp%"e&'ll,e(pl%,e t% e+ae a le!iti(ate an inin! $%((it(ent anperpet'ate a &ra' %r li7e )r%n!%in!". T% e "'re# the C%'rtha"# %n n'(er%'" %$$a"i%n"#?= applie the prin$iple )here a

$%rp%rati%n i" i""%l+e an it" a""et" are tran"&erre t% an%thert% a+%i a nan$ial liailit, %& the r"t $%rp%rati%n )ith the re"'ltthat the "e$%n $%rp%rati%n "h%'l e $%n"iere a $%ntin'ati%nan "'$$e""%r %& the r"t entit,.

In th%"e in"tan$e" )hen the C%'rt pier$e the +eil %&$%rp%rate $ti%n %& t)% $%rp%rati%n"# there )a" a $%nP'en$e %&the &%ll%)in! &a$t%r"D

1. A r"t $%rp%rati%n i" i""%l+e; /. The a""et" %& the r"t $%rp%rati%n i"

tran"&erre t% a "e$%n $%rp%rati%n t% a+%ia nan$ial liailit, %& the r"t $%rp%rati%n;an

. 6%th $%rp%rati%n" are %)ne an $%ntr%lle

, the "a(e per"%n" "'$h that the "e$%n$%rp%rati%n "h%'l e $%n"iere a" a$%ntin'ati%n an "'$$e""%r %& the r"t$%rp%rati%n.

In the in"tant $a"e# h%)e+er# the "e$%n an thir

&a$t%r" are $%n"pi$'%'"l, a"ent. There i"# there&%re# n%$%(pellin! -'"ti$ati%n &%r i"re!arin! the $ti%n %& $%rp%rateentit, "eparatin! '7an# In$. &r%( IC. In appl,in! the prin$iple#%th the RTC an the CA (i"eral, &aile t% ienti&, the pre"en$e%& the a%+e(enti%ne &a$t%r". C%n"ierD

The RTC i"re!are the "eparate $%rp%rate per"%nalitie" %&'7an# In$. an IC a"e %n the &%ll%)in! pre(i"e" anar!'(ent"D

While it i" tr'e that a $%rp%rati%n ha" a"eparate an i"tin$t per"%nalit, &r%( it""t%$7h%ler# ire$t%r an %$er"# the la)e8pre""l, pr%+ie" &%r an e8$epti%n. WhenMi$hael Chan# the Mana!in! 0ire$t%r %&e&enant '7an# In$. 9(a-%rit, "t%$7h%ler %&the ne)l, &%r(e $%rp%rati%n IC=@ $%nr(ethe a)ar t% plainti t% "'ppl, an in"tallinteri%r "i!na!e" in the Enterpri"e Center he

http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182729.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182729.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182729.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182729.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182729.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182729.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182729.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182729.htm#_ftn39


21/61

/19Mi$hael Chan# Mana!in! 0ire$t%r %& e&enant'7an# In$.@ 7ne) that there )a" n% "'$ient$%rp%rate &'n" t% pa, it" %li!ati%na$$%'nt#th'" i(pl,in! a &aith %n hi" part an &ra' in$%ntra$tin! the %li!ati%n. Mi$hael Channeither ret'rne the interi%r "i!na!e" n%rtenere pa,(ent t% the plainti. Thi"$ir$'("tan$e (a, )arrant the pier$in! %& the

+eil %& $%rp%rati%n $ti%n. a-in> 5een >uiltyo= 5ad =ait: in t:e 9ana>e9ent o=

corporate 9atters t:e corporate trustee!

director or ocer 9ay 5e :eld personally

lia5le. 8 8 8 Sin$e &ra' i" a "tate %& (in# it nee

n%t e pr%+e , ire$t e+ien$e 't (a, ein&erre &r%( the $ir$'("tan$e" %& the $a"e. 88 8 A=n the $ir$'("tan$e" areD the "i!nat're%& Mi$hael Chan# Mana!in! 0ire$t%r %& '7an#In$. appearin! in the $%nr(ati%n %& the a)ar"ent t% the plainti; "i!nat're %& Chan ai it# a6riti"h Nati%nal appearin! in the Arti$le" %&

In$%rp%rati%n an "i!nat're %& Mi$hael Chanal"% a 6riti"h Nati%nal appearin! in the Arti$le"%& In$%rp%rati%n %&= '7an Internati%nal C%rp.!i+e the i(pre""i%n that the, are %ne an the"a(e per"%n# that Mi$hael Chan an Chan aiit are %th (a-%rit, "t%$7h%ler" %& '7anInternati%nal C%rp. an '7an# In$. h%lin! J%& the "t%$7"; that '7an Internati%nal C%rp. i"pra$ti$all, %in! the "a(e 7in %& '"ine"" a"that %& '7an# In$. to t:e pri-ate

respondent t:e contract it: =ull

noled>e t:at it as not in a position to

co9ply it: t:e o5li>ation it :ad

assu9ed 5ecause o= inadeuate paidup

capital. It ear" "tre""in! that "hareh%ler""h%'l in !%% &aith p't at the ri"7 %& the'"ine""# 'nen$'(ere $apital rea"%nal,ae*'ate &%r it" pr%"pe$ti+e liailitie". The$apital "h%'l n%t e ill'"%r, %r triPin!

$%(pare )ith the '"ine"" t% e %ne an theri"7 %& l%"".

F'rther# it i" $lear that IC= i" a

$%ntin'ati%n an "'$$e""%r %& '7an# In$.Mi$hael Chan# a.7.a. Chan ai it ha" thelar!e"t l%$7 %& "hare" in %th '"ine""enterpri"e". The e(er!en$e %& the &%r(er )a"

$le+erl, ti(e )ith the ha"t, )ithra)al %& thelatter 'rin! the trial t% a+%i the nan$ialliailit, that )a" e+ent'all, "'ere , thelatter. The t)% $%(panie" ha+e a relate'"ine"" p'rp%"e. Considerin> t:esecircu9stances! t:e o5-ious conclusion is

t:at t:e creation o= 6uan 'nternational

Corporation ser-ed as a de-ice to e-ade

t:e o5li>ation incurred 5y 6uan! 'nc. and

yet prot =ro9 t:e >oodill attained 5y

t:e na9e 6uan 5y continuin> to en>a>e

in t:e sa9e line o= 5usiness it: t:e

sa9e list o= clients./= 9E(pha"i" "'pplie.@

E+ientl,# the CA &%'n the (ea!er pai'p $apitaliBati%n %&'7an# In$. an the "i(ilarit, %& the '"ine"" a$ti+itie" in )hi$h%th $%rp%rati%n" are en!a!e a" a -'(pin! %ar t% it"$%n$l'"i%n that the $reati%n %& IC "er+e a" a e+i$e t% e+aethe %li!ati%n in$'rre , '7an# In$. The appellate $%'rt#h%)e+er# le&t a !apin! h%le , &ailin! t% e(%n"trate that '7an#In$. an it" "t%$7h%ler" e&ra'e M%rale". In ne# there i" n%"h%)in! that the in$%rp%rati%n# an the "eparate an i"tin$tper"%nalit,# %& IC )a" '"e t% e&eat M%rale" ri!ht t% re$%+er&r%( '7an# In$. K'!in! &r%( the re$%r"# n% "eri%'" atte(pt)a" (ae t% le+, %n the pr%pertie" %& '7an# In$. M%rale" $%'ln%t# th'"# +alil, ar!'e that '7an# In$. trie t% a+%i liailit, %rha n% pr%pert, a!ain"t )hi$h t% pr%$ee.

M%rale" &'rther $%nten" that '7an# In$." $l%"'re i"e+ien$e , it" &ail're t% le it" /JJ1 General In&%r(ati%n Sheet9GIS@ )ith the Se$'ritie" an E8$han!e C%((i""i%n. %)e+er#"'$h &a$t %e" n%t ne$e""aril, (ean that '7an# In$. haalt%!ether $ea"e %perati%n"# a" M%rale" )%'l ha+e thi" C%'rtelie+e# &%r it i" "tate %n the &a$e %& the GIS that it i" %nl, 'p%na &ail're t% le the $%rp%rate GIS &%r -e HI consecuti-eyears that n%n%perati%n "hall e pre"'(e.

The &a$t that '7an# In$. entere int% a :h: . (illi%n$%ntra$t )hen it %nl, ha a pai'p $apital %& :h: >#JJJ i" n%t anini$ati%n %& the intent %n the part %& it" (ana!e(ent t% e&ra'$reit%r". :ai'p $apital i" (erel, "ee (%ne, t% "tart a$%rp%rati%n %r a '"ine"" entit,. A" in thi" $a"e# it (erel,repre"ente the $apitaliBati%n upon incorporation in ""7 %&'7an# In$. :ai'p $apitaliBati%n %& :h: >#JJJ i" n%t an "h%'ln%t e ta7en a" a rePe$ti%n %& the r(" $apa$it, t% (eet it"re$'rrent an l%n!ter( %li!ati%n". It ('"t e %rne in (inthat the e*'it, p%rti%n $ann%t e e*'ate t% the +iailit, %& a'"ine"" $%n$ern# &%r the e"t te"t i" the )%r7in! $apital )hi$h$%n"i"t" %& the li*'i a""et" %& a !i+en '"ine"" relatin! t% thenat're %& the '"ine"" $%n$ern.

Neither "h%'l the le+el %& pai'p $apital %& '7an# In$.

'p%n it" in$%rp%rati%n e +ie)e a" a a!e %& &ra'# &%r it i" in$%(plian$e )ith Se$. 1 %& the C%rp%rati%n C%e#= )hi$h %nl,re*'ire" a (ini('( pai'p $apital %& :h: >#JJJ.

The "'!!e"ti%n that IC i" 't a $%ntin'ati%n an

"'$$e""%r %& '7an# In$.# %)ne an $%ntr%lle a" the, are , the"a(e "t%$7h%ler"# "tan" )ith%'t &a$t'al a"i". It i" tr'e thatMi$hael Chan# a.7.a. Chan ai it# %)n" J %& the %'t"tanin!$apital "t%$7 %& %th $%rp%rati%n". 6't "'$h $ir$'("tan$e#"tanin! al%ne# i" in"'$ient t% e"tali"h ientit,. There ('"t eat lea"t a "'"tantial ientit, %& "t%$7h%ler" &%r %th$%rp%rati%n" in %rer t% $%n"ier thi" &a$t%r t% e $%n"tit'ti+e %&$%rp%rate ientit,.

It )%'l n%t a+ail M%rale" an, t% rel,= %n GeneralCredit Corporation v. Alsons Develop#ent and Invest#ent

Corporation.>= General Credit Corporation i" &a$t'all, n%t %n all&%'r" )ith the in"tant $a"e. There# the $%((%n "t%$7h%ler" %&the $%rp%rati%n" repre"ente "0 %& the %'t"tanin! $apital

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//"t%$7 %& the $%(panie"# 'nli7e here )here Mi$hael Chan (erel,repre"ent" J %& the %'t"tanin! $apital "t%$7 %& %th IC an'7an# In$.# n%t e+en a (a-%rit, %& it. In that $a"e# (%re%+er#e+ien$e )a" a'$e t% "'pp%rt the nin! that the &'n" %&the "e$%n $%rp%rati%n $a(e &r%( the r"t. Finall,# there )a"pr%%& in General Credit Corporation %& $%(plete $%ntr%l# "'$hthat %ne $%rp%rati%n )a" a (ere '((, %r alter e!% %& the%ther# )hi$h i" a"ent in the in"tant $a"e.

E+ientl,# the a&%re(enti%ne $a"e relie 'p%n ,

M%rale" $ann%t -'"ti&, the appli$ati%n %& the prin$iple %& pier$in!the +eil %& $%rp%rate $ti%n t% the in"tant $a"e. A" "h%)n , there$%r"# the na(e Mi$hael Chan# the "i(ilarit, %& '"ine""a$ti+itie" en!a!e in# an in$ientall, the )%r '7an appearin!in the $%rp%rate na(e" pr%+ie the ne8'" et)een '7an# In$.an IC. A" ill'"trate# the"e $ir$'("tan$e" are in"'$ient t%e"tali"h the ientit, %& IC a" the alter e!% %r "'$$e""%r %&'7an# In$.

It ear" reiteratin! that pier$in! the +eil %& $%rp%rate

$ti%n i" &r%)ne 'p%n. A$$%rin!l,# th%"e )h% "ee7 t% pier$ethe +eil ('"t $learl, e"tali"h that the "eparate an i"tin$t

per"%nalitie" %& the $%rp%rati%n" are "et 'p t% -'"ti&, a )r%n!#pr%te$t &ra'# %r perpetrate a e$epti%n. In the $%n$rete an %nthe a""'(pti%n that the RTC ha" +alil, a$*'ire -'ri"i$ti%n %+erthe part, $%n$erne# M%rale" %'!ht t% ha+e pr%+e ,$%n+in$in! e+ien$e that '7an# In$. )a" $%llap"e antherea&ter IC p'rp%"el, &%r(e an %perate t% e&ra' hi(.M%rale" ha" n%t t% '" i"$har!e hi" 'ren.

?ERE/*RE# the petiti%n i" here, GRAN,E3.

The CA" Kan'ar, /# /JJ? 0e$i"i%n an April 13# /JJ? Re"%l'ti%nin CAG.R. S: N%. 1JJ1>/ are here,REER)E3 an )E,A)'3E. The le+, pla$e 'p%n the per"%nal pr%pertie" %& '7anInternati%nal C%rp%rati%n i" here, %rere li&te an theper"%nal pr%pertie" %rere ret'rne t% '7an Internati%nal

C%rp%rati%n. The RTC %& Manila# 6ran$h /1 i" here, ire$te t%e8e$'te the RTC 0e$i"i%n ate N%+e(er /?# /JJ/ a!ain"t'7an# In$. )ith rea"%nale i"pat$h. N% $%"t". )* *R3ERE3.

FIRST 0I4ISION

[G.R. No. $00#". June 2"! 2004%

RA&1N3* *3AN' )EC*)A! E( B1ENA)EN)*

) and 3A))A3 ?ARE*1)'NG and +*R,

)ER'CE)! 'NC*R+*RA,E3! petitioners!vs. E'R)

*/ ER?'N )1ARE /RANC')C*! respondents.

3 E C ' ) ' * N

Thi" i" a petiti%n &%r re+ie) 'ner R'le > %& the R'le" %&C%'rt "ee7in! the re+er"al %& the e$i"i%n1= %& the C%'rt %&Appeal" ate Fer'ar, /2# /JJ in CAG.R. C4 N%. 31?3?# )hi$har(e in toto the K'ne 1


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/''.

TE COURT OF A::EALS SERIOUSLY ERRE0 WEN IT AFFIRME0 TE 0ECISION OF TE TRIAL COURT IN OL0ING :ETITIONER EL6UENASENSO SY SOLI0ARILY LIA6LE WIT :ETITIONERS 0ASSA0AN0 SECOSA IN 4IOLATION OF TE COR:ORATION LAW AN0RELATE0 KURIS:RU0ENCE ON TE MATTER.

'''.

TE KU0GMENT OF TE TRIAL COURT AS AFFIRME0 6Y TECOURT OF A::EALS AWAR0ING :>JJ#JJJ.JJ AS MORAL0AMAGES IS MANIFESTLY A6SUR0# MISTAEN AN0 UNKUST.>=

The petiti%n i" partl, i(pre""e )ith (erit.

On the i""'e %& )hether petiti%ner 0a""a Wareh%'"in! an:%rt Ser+i$e"# In$. e8er$i"e the ili!en$e %& a !%% &ather %& a&a(il, in the "ele$ti%n an "'per+i"i%n %& it" e(pl%,ee"# )e nthe a""aile e$i"i%n t% e in &'ll a$$%r )ith pertinent pr%+i"i%n"%& la) an e"tali"he -'ri"pr'en$e.

Arti$le /123 %& the Ci+il C%e pr%+ie"D

Wh%e+er , a$t %r %(i""i%n $a'"e" a(a!e t% an%ther# thereein! &a'lt %r ne!li!en$e# i" %li!e t% pa, &%r the a(a!e%ne. S'$h &a'lt %r ne!li!en$e# i& there i" n% pree8i"tin!

$%ntra$t'al relati%n et)een the partie"# i" $alle a *'a"ieli$tan i" !%+erne , the pr%+i"i%n" %& thi" Chapter.

On the %ther han# Arti$le /1?J# in pertinent part# "tate"D

The %li!ati%n i(p%"e , arti$le /123 i" e(anale n%t %nl,&%r %ne" %)n a$t" %r %(i""i%n"# 't al"% &%r th%"e %& per"%n" &%r)h%( %ne i" re"p%n"ile 8 8 8.

E(pl%,er" "hall e liale &%r the a(a!e" $a'"e , theire(pl%,ee" an h%'"eh%l helper" a$tin! )ithin the "$%pe %&their a""i!ne ta"7"# e+en th%'!h the &%r(er are n%t en!a!e inan, '"ine"" %r in'"tr, 8 8 8.

The re"p%n"iilit, treate %& in thi" arti$le "hall $ea"e )hen theper"%n" herein (enti%ne pr%+e that the, %"er+e all theili!en$e %& a !%% &ather %& a &a(il, t% pre+ent a(a!e.

6a"e %n the &%re!%in! pr%+i"i%n"# )hen an in-'r, i" $a'"e, the ne!li!en$e %& an e(pl%,ee# there in"tantl, ari"e" apre"'(pti%n that there )a" ne!li!en$e %n the part %& thee(pl%,er either in the "ele$ti%n %& hi" e(pl%,ee %r in the"'per+i"i%n %+er hi( a&ter "'$h "ele$ti%n. The pre"'(pti%n#h%)e+er# (a, e re'tte , a $lear "h%)in! %n the part %& thee(pl%,er that it e8er$i"e the $are an ili!en$e %& a !%%&ather %& a &a(il, in the "ele$ti%n an "'per+i"i%n %& hi"e(pl%,ee. en$e# t% e+ae "%liar, liailit, &%r *'a"ieli$t$%((itte , an e(pl%,ee# the e(pl%,er ('"t a'$e "'$ientpr%%& that it e8er$i"e "'$h e!ree %& $are.3=

%) %e" an e(pl%,er pr%+e that he inee e8er$i"e theili!en$e %& a !%% &ather %& a &a(il, in the "ele$ti%n an"'per+i"i%n %& hi" e(pl%,ee The $a"e %& -etro -anila $ransitCorporation v. Co"rt o' Appeals2= i" in"tr'$ti+eD

In ne# the part,# )hether plainti %r e&enant# )h% a""ert" thear(ati+e %& the i""'e ha" the 'ren %& pre"entin! at the trial"'$h a(%'nt %& e+ien$e re*'ire , la) t% %tain a &a+%rale

-'!(ent?= . . . In (a7in! pr%%& in it" %r hi" $a"e# it i" para(%'ntthat the e"t an (%"t $%(plete e+ien$e i" &%r(all, entere.


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/"'per+i"i%n %& e(pl%,ee"# e(pl%,er" "h%'l &%r('late "tanar%peratin! pr%$e're"# (%nit%r their i(ple(entati%n# an i(p%"ei"$iplinar, (ea"'re" &%r rea$he" there%&. T% e"tali"h the"e&a$t%r" in a trial in+%l+in! the i""'e %& +i$ari%'" liailit,#e(pl%,er" ('"t "'(it $%n$rete pr%% in$l'in! %$'(entar,e+ien$e.

In thi" $a"e# MMTC "%'!ht t% pr%+e that it e8er$i"e the ili!en$e%& a !%% &ather %& a &a(il, )ith re"pe$t t% the "ele$ti%n %&e(pl%,ee" , pre"entin! (ainl, te"ti(%nial e+ien$e %n it"hirin! pr%$e're. A$$%rin! t% MMTC# appli$ant" are re*'ire t%"'(it pr%&e""i%nal ri+in! li$en"e"# $erti$ati%n" %& )%r7e8perien$e# an $learan$e" &r%( the Nati%nal 6'rea' %&In+e"ti!ati%n; t% 'ner!% te"t" %& their ri+in! "7ill"#$%n$entrati%n# rePe8e"# an +i"i%n; an# t% $%(plete trainin!pr%!ra(" %n tra$ r'le"# +ehi$le (aintenan$e# an "tanar%peratin! pr%$e're" 'rin! e(er!en$, $a"e".

8 8 8 8 8 8 8 8 8

Alth%'!h te"ti(%nie" )ere %ere that in the $a"e %& :er% M'"a

all the"e pre$a'ti%n" )ere &%ll%)e# the re$%r" %& hi" inter+ie)#%& the re"'lt" %& hi" e8a(inati%n"# an %& hi" "er+i$e )ere n%tpre"ente. . . T=here i" n% re$%r that M'"a attene "'$htrainin! pr%!ra(" an pa""e the "ai e8a(inati%n" e&%re he)a" e(pl%,e. N% pr%%& )a" pre"ente that M'"a i n%t ha+ean, re$%r %& tra$ +i%lati%n". N%r )ere re$%r" %& ail,in"pe$ti%n"# alle!el, $%n'$te , "'per+i"%r"# e+erpre"ente. . . The &ail're %& MMTC t% pre"ent "'$h %$'(entar,pr%%& p't" in %'t the $reiilit, %& it" )itne""e".

K'ri"pr'entiall,# there&%re# the e(pl%,er ('"t n%t (erel,pre"ent te"ti(%nial e+ien$e t% pr%+e that he %"er+e the

ili!en$e %& a !%% &ather %& a &a(il, in the "ele$ti%n an"'per+i"i%n %& hi" e(pl%,ee# 't he ('"t al"% "'pp%rt "'$hte"ti(%nial e+ien$e )ith $%n$rete %r %$'(entar, e+ien$e.

The rea"%n &%r thi" i" t% %+iate the ia"e nat're %& thee(pl%,er" te"ti(%n, %r that %& hi" )itne""e".1=

Appl,in! the &%re!%in! %$trine" t% the pre"ent $a"e# )eh%l that petiti%ner 0a""a Wareh%'"in! an :%rt Ser+i$e"# In$.&aile t% $%n$l'"i+el, pr%+e that it ha e8er$i"e the re*'i"iteili!en$e %& a !%% &ather %& a &a(il, in the "ele$ti%n an"'per+i"i%n %& it" e(pl%,ee".

Eilert% 0'er(e# the l%ne )itne"" pre"ente , 0a""aWareh%'"in! an :%rt Ser+i$e"# In$. t% "'pp%rt it" p%"iti%n that itha e8er$i"e the ili!en$e %& a !%% &ather %& a &a(il, in the"ele$ti%n an "'per+i"i%n %& it" e(pl%,ee"# te"tie that he )a"the %ne )h% re$%((ene petiti%ner Ra,('n% Se$%"a a" ari+er t% 0a""a Wareh%'"in! an :%rt Ser+i$e"# In$.; that it )a"hi" 't, t% "$r'tiniBe the $apailitie" %& ri+er"; an that heelie+e petiti%ner t% e ph,"i$all, an (entall, t &%r he ha'ner!%ne ri!i trainin! an attene the ::A "a&et, "e(inar. 1>=

:etiti%ner 0a""a Wareh%'"in! an :%rt Ser+i$e"# In$. &ailet% "'pp%rt the te"ti(%n, %& it" l%ne )itne"" )ith %$'(entar,e+ien$e )hi$h )%'l ha+e "tren!thene it" $lai( %& 'eili!en$e in the "ele$ti%n an "'per+i"i%n %& it" e(pl%,ee". S'$han %(i""i%n i" &atal t% it" p%"iti%n# %n a$$%'nt %& )hi$h# 0a""a$an e ri!ht&'ll, hel "%liaril, liale )ith it" $%petiti%nerRa,('n% Se$%"a &%r the a(a!e" "'ere , the heir" %& Er)inFran$i"$%.

%)e+er# )e n that petiti%ner El 6'ena"en"% S, $ann%te hel "%liaril, liale )ith hi" $%petiti%ner". While it (a, etr'e that S, i" the pre"ient %& petiti%ner 0a""a Wareh%'"in!an :%rt Ser+i$e"# In$.# "'$h &a$t i" n%t , it"el& "'$ient t% h%lhi( "%liaril, liale &%r the liailitie" a-'!e a!ain"t hi" $%petiti%ner".

It i" a "ettle pre$ept in thi" -'ri"i$ti%n that a $%rp%rati%ni" in+e"te , la) )ith a per"%nalit, "eparate &r%( that %& it""t%$7h%ler" %r (e(er".13= It ha" a per"%nalit, "eparate ani"tin$t &r%( th%"e %& the per"%n" $%(p%"in! it a" )ell a" &r%(that %& an, %ther entit, t% )hi$h it (a, e relate. Mere%)ner"hip , a "in!le "t%$7h%ler %r , an%ther $%rp%rati%n %&all %r nearl, all %& the $apital "t%$7 %& a $%rp%rati%n i" n%t in it"el& "'$ient !r%'n &%r i"re!arin! the "eparate $%rp%rateper"%nalit,.12= A $%rp%rati%n" a'th%rit, t% a$t an it" liailit, &%rit" a$ti%n" are "eparate an apart &r%( the ini+i'al" )h% %)nit.1?=

The "%$alle +eil %& $%rp%rati%n $ti%n treat" a" "eparatean i"tin$t the aair" %& a $%rp%rati%n an it" %$er" an"t%$7h%ler". A" a !eneral r'le# a $%rp%rati%n )ill e l%%7e 'p%na" a le!al entit,# 'nle"" an 'ntil "'$ient rea"%n t% the$%ntrar, appear". When the n%ti%n %& le!al entit, i" '"e t%e&eat p'li$ $%n+enien$e# -'"ti&, )r%n!# pr%te$t &ra'# %r e&en$ri(e# the la) )ill re!ar the $%rp%rati%n a" an a""%$iati%n %&per"%n".1JJ#JJJ.JJ &%r ein! (ani&e"tl, a"'r#(i"ta7en an 'n-'"t. We are n%t per"'ae.

Uner Arti$le //J3# the "p%'"e# le!iti(ate an ille!iti(atee"$enant" an a"$enant" %& the e$ea"e (a, e(an(%ral a(a!e" &%r (ental an!'i"h &%r the eath %& thee$ea"e. The rea"%n &%r the !rant %& (%ral a(a!e" ha" eene8plaine in thi" )i"eD

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/>

. . . the a)ar %& (%ral a(a!e" i" ai(e at a re"t%rati%n# )ithinthe li(it" p%""ile# %& the "pirit'al "tat'" *'% ante; an there&%re#it ('"t e pr%p%rti%nate t% the "'erin! inPi$te. The inten"it,%& the pain e8perien$e , the relati+e" %& the +i$ti( i"pr%p%rti%nate t% the inten"it, %& ae$ti%n &%r hi( an ear" n%relati%n )hat"%e+er )ith the )ealth %r (ean" %& the %ener.//=

In the in"tant $a"e# the "p%'"e" Fran$i"$% pre"entee+ien$e %& the "earin! pain that the, &elt )hen the pre(at'rel%"" %& their "%n )a" rela,e t% the(. That pain )a" hi!hl,e+ient in the te"ti(%n, %& the &ather )h% )a" &%re+er epri+e%& a "%n# a "%n )h%"e 'nti(el, eath $a(e at that p%int )henthe latter )a" nearin! the $'l(inati%n %& e+er, parent" )i"h t%e'$ate their $hilren. The eath %& Fran$i" ha" inee le&t a +%iin the li+e" %& the re"p%nent". Ant%ni% Fran$i"$% te"tie %n theee$t %& the eath %& hi" "%n# Fran$i"# in thi" (annerD

QD 9Att,. 6alana!@D What i ,%' % )hen ,%' learnethat ,%'r "%n )a" 7ille %n K'ne /2# 1= )e ar(e the a)ar%& (%ral a(a!e" %& :>JJ#JJJ.JJ t% the heir" %& the +i$ti(# a(%ther# )h% ie &r%( in-'rie" "he "'"taine )hen a '" ri+en, an e(pl%,ee %& the petiti%ner hit her. In the $a"e at ar# )eli7e)i"e ar( the p%rti%n %& the a""aile e$i"i%n a)arin! the(%ral a(a!e".

Sin$e the petiti%ner" i n%t *'e"ti%n the %ther a(a!e"a-'!e a!ain"t the( , the $%'rt a !"o# )e ar( the a)ar%& the"e a(a!e" t% the re"p%nent".

?ERE/*RE# the petiti%n i" 0ENIE0. The a""aile e$i"i%n

i" AFFIRME0 )ith the MO0IFICATION that petiti%ner El6'ena"en"% S, i" A6SOL4E0 &r%( an, liailit, a-'!e a!ain"thi" $%petiti%ner" in thi" $a"e.

C%"t" a!ain"t petiti%ner".

)* *R3ERE3.

FIRST 0I4ISION

[G.R. No. 42$$. July #! 200%

+'('++'NE NA,'*NA( BAN6! petitioner, vs. R',RA,*

GR*1+ 'NC.! R'A,,* 'N,ERNA,'*NA(! 'NC.! and

3A3A)AN GENERA( &ERCAN3')E! respondent.

3 E C ' ) ' * N

In a petiti%n &%r re+ie) %n ertiorari 'ner R'le > %& theRe+i"e R'le" %& C%'rt# petiti%ner "ee7" t% ann'l an "et a"iethe C%'rt %& Appeal" e$i"i%n in C.A. G.R. S.:. N%. >>2 ateMar$h /2# /JJJ# ar(in! the Orer i""'in! a )rit %& preli(inar,in-'n$ti%n %& the Re!i%nal Trial C%'rt %& Ma7ati# 6ran$h 12#ate K'ne J# 1


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/3%)e+er# a" %& April J# 1


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/2

The trial $%'rt# h%)e+er# in it" Orer ate O$t%er # 1=

In Conept &"ilders, In. v. NLRC,13= )e ha+e lai the te"t ineter(inin! the appli$ailit, %& the %$trine %& pier$in! the +eil%& $%rp%rate $ti%n# t% )itD

http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/jul2001/142616.htm#_edn16


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/?1. C%ntr%l# n%t (ere (a-%rit, %r $%(plete $%ntr%l# 't $%(plete%(inati%n# n%t %nl, %& nan$e" 't %& p%li$, an '"ine""pra$ti$e in re"pe$t t% the tran"a$ti%n atta$7e "% that the$%rp%rate entit, a" t% thi" tran"a$ti%n ha at the ti(e n%"eparate (in# )ill %r e8i"ten$e %& it" %)n.

/. S'$h $%ntr%l ('"t ha+e een '"e , the e&enant t%$%((it &ra' %r )r%n!# t% perpet'ate the +i%lati%n %& a "tat't%r,%r %ther p%"iti+e le!al 't,# %r i"h%ne"t an# 'n-'"t a$t in$%ntra+enti%n %& plainti" le!al ri!ht"; an#

. The a&%re"ai $%ntr%l an rea$h %& 't, ('"t pr%8i(atel,$a'"e the in-'r, %r 'n-'"t l%"" $%(plaine %&.

The a"en$e %& an, %ne %& the"e ele(ent" pre+ent" Hpier$in! the$%rp%rate +eil.H In appl,in! the Hin"tr'(entalit,H %r Halter e!%H%$trine# the $%'rt" are $%n$erne )ith realit, an n%t &%r(# )ithh%) the $%rp%rati%n %perate an the ini+i'al e&enant"relati%n"hip t% the %perati%n.12=

A"ie &r%( the &a$t that :N6IFL i" a )h%ll, %)ne"'"iiar, %& petiti%ner :N6# there i" n%) "h%)in! %& theini$ati+e &a$t%r" that the &%r(er $%rp%rati%n i" a (erein"tr'(entalit, %& the latter are pre"ent. Neither i" there ae(%n"trati%n that an, %& the e+il" "%'!ht t% e pre+ente ,the %$trine %& pier$in! the $%rp%rate +eil e8i"t. Ine"$apal,#there&%re# the %$trine %& pier$in! the $%rp%rate +eil a"e %nthe alter e!% %r in"tr'(entalit, %$trine n" n% appli$ati%n in

the $a"e at ar.

In an, $a"e# the parent"'"iiar, relati%n"hip et)een :N6an :N6IFL i" n%t the "i!ni$ant le!al relati%n"hip in+%l+e inthi" $a"e "in$e the petiti%ner )a" n%t "'e e$a'"e it i" theparent $%(pan, %& :N6IFL. Rather# the petiti%ner )a" "'ee$a'"e it a$te a" an att%rne,in&a$t %& :N6IFL in initiatin! the&%re$l%"'re pr%$eein!". A "'it a!ain"t an a!ent $ann%t )ith%'t$%(pellin! rea"%n" e $%n"iere a "'it a!ain"t theprin$ipal. Uner the R'le" %& C%'rt# e+er, a$ti%n ('"t epr%"e$'te %r e&ene in the na(e %& the real part,inintere"t#'nle"" %ther)i"e a'th%riBe , la) %r the"e R'le". 1?= In

(anat%r, ter("# the R'le" re*'ire that Hpartie"inintere"t)ith%'t )h%( n% nal eter(inati%n $an e ha# an a$ti%n "halle -%ine either a" plainti" %r e&enant".H1?# %& the 1


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/<Ro9eo Gal-e! 3o9inador )a5ina! /elipe Radiana!

Ga-ino )uali5io! &oreno Escares! /erdinand

,orres! /elipe Basilan! and Ru5en

Ro5alos! respondents.

3 E C ' ) ' * N

The $%rp%rate (a"7 (a, e li&te an the $%rp%rate +eil(a, e pier$e )hen a $%rp%rati%n i" -'"t 't the alter e!% %& aper"%n %r %& an%ther $%rp%rati%n. Where a!e" %& &ra' e8i"t;)here p'li$ $%n+enien$e i" e&eate; )here a )r%n! i" "%'!htt% e -'"tie there,# the $%rp%rate $ti%n %r the n%ti%n %& le!alentit, "h%'l $%(e t% na'!ht. The la) in the"e in"tan$e" )illre!ar the $%rp%rati%n a" a (ere a""%$iati%n %& per"%n" an# in$a"e %& t)% $%rp%rati%n"# (er!e the( int% %ne.

Th'"# )here a "i"ter $%rp%rati%n i" '"e a" a "hiel t%e+ae a $%rp%rati%n" "'"iiar, liailit, &%r a(a!e"# the$%rp%rati%n (a, n%t e hear t% "a, that it ha" a per"%nalit,

"eparate an i"tin$t &r%( the %ther $%rp%rati%n. The pier$in! %&the $%rp%rate +eil $%(e" int% pla,.

Thi" "pe$ial $i+il a$ti%n %"ten"il, rai"e" the *'e"ti%n %&)hether the Nati%nal La%r Relati%n" C%((i""i%n $%((itte!ra+e a'"e %& i"$reti%n )hen it i""'e a rea7%pen %rer t%the "heri t% e en&%r$e a!ain"t per"%nal pr%pert, &%'n in thepre(i"e" %& petiti%ner" "i"ter $%(pan,.

:etiti%ner C%n$ept 6'iler"# In$.# a %(e"ti$ $%rp%rati%n#)ith prin$ipal %$e at


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Jpr%pertie" "%'!ht t% e le+ie 'p%n , the "heri )ere %)ne ,,r% 9:hil".@# In$. 9::I@ %& )hi$h he i" the 4i$e:re"ient.

On N%+e(er /# 1


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1:ri+ate re"p%nent" then appeale t% the NLRC. On April

/# 1. Control, not #ere #a1orit or o#plete sto0 ontrol, +"t

o#plete do#ination, not onl o' *nanes +"t o' poli and

+"siness pratie in respet to t%e transation atta0ed so t%at

t%e orporate entit as to t%is transation %ad at t%e ti#e no

separate #ind, ;ill or existene o' its o;nB

. )"% ontrol #"st %ave +een "sed + t%e de'endant to

o##it 'ra"d or ;ron, to perpet"ate t%e violation o' a stat"tor

or ot%er positive leal d"t, or dis%onest and "n1"st at in

ontravention o' plaintis leal ri%tsB and

In thi" $a"e# the NLRC n%te that# )hile petiti%ner $lai(ethat it $ea"e it" '"ine"" %perati%n" %n April /


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/

&ot% in'or#ation s%eets ;ere *led + t%e sa#e Virilio O. Casino

as t%e orporate seretar o' +ot% orporations. It ;o"ld also not

+e a#iss to note t%at +ot% orporations %ad t%e sa#epresident,

t%e sa#e +oard o' diretors, t%e sa#e orporate oers, and

s"+stantiall t%e sa#e s"+sri+ers.

(ro# t%e 'oreoin, it appears t%at, a#on ot%er t%ins, t%e

respondent 3%erein petitioner6 and t%e t%ird4part lai#ant

s%ared t%e sa#e address andor pre#ises. Under t%is

ir"#stanes, 3si6 it annot +e said t%at t%e propert levied

"pon + t%e s%eri ;ere not o' respondents.13

Clearl,# petiti%ner $ea"e it" '"ine"" %perati%n" in %rer t%e+ae the pa,(ent t% pri+ate re"p%nent" %& a$7)a!e" an t%ar their rein"tate(ent t% their &%r(er p%"iti%n". ::I i"%+i%'"l, a '"ine"" $%n'it %& petiti%ner $%rp%rati%n an it"e(er!en$e )a" "7ill&'ll, %r$he"trate t% a+%i the nan$ialliailit, that alrea, atta$he t% petiti%ner $%rp%rati%n.

The &a$t" in thi" $a"e are anal%!%'" t% Claparols v. Co"rt o'Ind"strial Relations12 )here )e ha the %$$a"i%n t% r'leD

Respondent o"rts *ndins t%at indeed t%e Claparols )teel and

Nail Plant, ;%i% eased operation o' J"ne ?=, ;as

)UCCEEDED + t%e Claparols )teel Corporation eetive t%e

next da, J"l >, >?=, "p to Dee#+er , >?H, ;%en t%e latter

*nall eased to operate, ;ere not disp"ted + petitioner. it is

ver lear t%at t%e latter orporation ;as a ontin"ation and

s"essor o' t%e *rst entit x x x. &ot% predeessors and

s"essor ;ere o;ned and ontrolled + petitioner Ed"ardo

Claparols and t%ere ;as no +rea0 in t%e s"ession and

ontin"it o' t%e sa#e +"siness. $%is avoidin4t%e4lia+ilit

s%e#e is ver patent, onsiderin t%at ?F o' t%e s"+sri+ed

s%ares o' sto0 o' t%e Claparols )teel Corporation 3t%e seond

orporation6 ;as o;ned + respondent x x x Claparols %i#sel',

and all t%e assets o' t%e dissolved Claparols )teel and Nail Plant

;ere t"rned over to t%e e#erin Claparols )teel Corporation.

It i" +er, %+i%'" that the "e$%n $%rp%rati%n "ee7" thepr%te$ti+e "hiel %& a $%rp%rate $ti%n )h%"e +eil in the pre"ent$a"e $%'l# an "h%'l# e pier$e a" it )a" elieratel, an(ali$i%'"l, e"i!ne t% e+ae it" nan$ial %li!ati%n t% it"e(pl%,ee".

In +ie) %& the &ail're %& the "heri# in the $a"e at ar# t%ee$t a le+, 'p%n the pr%pert, "'-e$t %& the e8e$'ti%n# pri+atere"p%nent" ha n% %ther re$%'r"e 't t% appl, &%r a rea7%pen

%rer a&ter the thirpart, $lai( %& ::I )a" i"(i""e &%r la$7 %& (erit , the NLRC. Thi" i" in $%n"%nan$e )ith Se$ti%n # R'le 4II%& the NLRC Man'al %& E8e$'ti%n %& K'!(ent )hi$h pr%+ie"thatD

)%o"ld t%e losin part, %is aent or representative, re'"se or

pro%i+it t%e )%eri or %is representative entr to t%e plae ;%ere

t%e propert s"+1et o' exe"tion is loated or 0ept, t%e

1"d#ent reditor #a appl to t%e Co##ission or La+or Ar+iter

onerned 'or a +rea04open order.

F'rther(%re# %'r per'"al %& the re$%r" "h%)" that the t)inre*'ire(ent" %& 'e n%ti$e an hearin! )ere $%(plie )ith.:etiti%ner an the thirpart, $lai(ant )ere !i+en the%pp%rt'nit, t% "'(it e+ien$e in "'pp%rt %& their $lai(.

en$e# the NLRC i n%t $%((it an, !ra+e a'"e %&i"$reti%n )hen it ar(e the rea7%pen %rer i""'e , theLa%r Ariter.

Finall,# )e % n%t n an, rea"%n t% i"t'r the r'le that&a$t'al nin!" %& *'a"i-'i$ial a!en$ie" "'pp%rte ,"'"tantial e+ien$e are inin! %n thi" C%'rt an are entitle t%!reat re"pe$t# in the a"en$e %& "h%)in! %& !ra+e a'"e %& ai"$reti%n.1?

?ERE/*RE# the petiti%n i" 0ISMISSE0 an the a""ailere"%l'ti%n" %& the NLRC# ate April /# 1


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%& the $%rre"p%nin! (er$hant" an $%((er$ial r%7er"pri+ile!e ta8 re$eipt".

III. That the e&enant C%lle$t%r %& Internal re+en'e i" n%) Mr.6iian% L. Meer in lie' %& Mr. Al&re% L. Yat$%.

I4. That 'rin! the peri% &r%( Kan'ar, 1# 1


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Manila# :hilippine"# 0e$e(er /3# 1J; E8hiit G@;

9&@ Where the !%%" )ere E'r%pean %ri!in# $%n"'lar in+%i$e"# ill%& lain!# an# in !eneral# the %$'(ent" ne$e""ar, &%r$learan$e )ere "ent ire$tl, t% plainti 9t.".n.# p. 1@;

9!@ I& the plainti ha in "t%$7 the (er$hani"e e"ire , l%$al',er"# it i((eiatel, lle the %rer" %& "'$h l%$al ',er" an(ae eli+er, in the :hilippine" )ith%'t the ne$e""it, %& $alin!it" prin$ipal in A(eri$a either &%r pri$e *'%tati%n" %r $%nr(ati%n%r re-e$ti%n %& that a!ree 'p%n et)een it an the ',er 9t.".n.#pp.


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>I. In it" r"t a""i!n(ent %& err%r appellant "'(it" that the trial$%'rt erre in n%t h%lin! that it i" a %(e"ti$ $%rp%rati%ni"tin$t an "eparate &r%( an n%t a (ere ran$h %& %ppelIn'"trial Car an E*'ip(ent C%(pan,. It $%nten" that it"$%rp%rate e8i"ten$e a" :hilippine $%rp%rati%n $an n%t e$%llaterall, atta$7e an that the G%+ern(ent i" e"t%ppe &r%("% %in!. A" "tate a%+e# the l%)er $%'rt i n%t en, le!alper"%nalit, t% appellant &%r an, an all p'rp%"e"# 't hel in

ee$t that in the tran"a$ti%n in+%l+e in thi" $a"e the p'li$intere"t an $%n+enien$e )%'l e e&eate an )hat )%'la(%'nt t% a ta8 e+a"i%n perpetrate# 'nle"" re"%rt i" ha t% the%$trine %& Hi"re!ar %& the $%rp%rate $ti%n.H In %ther )%r"# inl%%7in! thr%'!h the $%rp%rate &%r( t% the 'lti(ate per"%n %r$%rp%rati%n ehin that &%r(# in the parti$'lar tran"a$ti%n" )hi$h)ere in+%l+e in the $a"e "'(itte t% it" eter(inati%n an

-'!(ent# the $%'rt i "% in %rer t% pre+ent the $%ntra+enti%n%& the l%$al internal re+en'e la)"# an the perpetrati%n %& )hat)%'l a(%'nt t% a ta8 e+a"i%n# ina"('$h a" it $%n"iere anin %'r %pini%n# $%rre$tl, that appellant %ppel 9:hilippine"@# In$.)a" a (ere ran$h %r a!en$, %r '((, 9H%e%"raH@ %& %ppelIn'"trial Car an E*'ip(ent C%. The $%'rt i n%t h%l that the$%rp%rate per"%nalit, %& %ppel 9:hilippine"@# In$.# )%'l al"% e

i"re!are in %ther $a"e" %r &%r %ther p'rp%"e". It )%'l ha+eha n% p%)er t% "% h%l. The $%'rt" a$ti%n in thi" re!ar ('"te $%nne t% the tran"a$ti%n" in+%l+e in the $a"e at ar H&%rthe p'rp%"e %& a-'!in! the ri!ht" an liailitie" %& the partie" inthe $a"e. The, ha+e n% -'ri"i$ti%n t% % (%re.H 91 Fleth$er#C,$l%peia %& C%rp%rati%n# :er(anent e.# p. 1/# "e$ti%n 1.@

A leain! an ('$h $ite $a"e p't" it a" &%ll%)"D

I& an, !eneral r'le $an e lai %)n# in the pre"ent "tate %&a'th%rit,# it i" that a $%rp%rati%n )ill e l%%7e 'p%n a" a le!alentit, a" a !eneral r'le# an 'ntil "'$ient rea"%n t% the$%ntrar, appear"; 't# )hen the n%ti%n %& le!al entit, i" '"e t%e&eat p'li$ $%n+inien$e# -'"ti&, )r%n!# pr%te$t &ra'# %r e&en

$ri(e# the la) )ill re!ar the $%rp%rati%n a" an a""%$iati%n %&per"%n". 91 Flet$her C,$l%peia %& C%rp%rati%n :er(anentEiti%n=# pp. 1># 13; Unite State" +". Mil)a'7ee Re&ri!erati%n

Tran"it C%.# 1/ Fe.# /2# />># per San%rn# K.@

In hi" "e$%n "pe$ial e&en"e appellee alle!e" Hthat the plainti)a" an i" in &a$t a ran$h %r "'"iiar, %& %ppel In'"trial Caran E*'ip(ent C%.# a :enn",l+ania $%rp%rati%n n%t li$en"e t%% '"ine"" in the :hilippine" 't a$t'all, %in! '"ine"" herethr%'!h the plainti; that the "ai &%rei!n $%rp%rati%n h%l" # 1>>.@

While )e re$%!niBe the le!al prin$iple that a $%rp%rati%n %e"n%t l%"e it" entit, , the %)ner"hip %& the 'l7 %r e+en the )h%le

%& it" "t%$7# , an%ther $%rp%rati%n 9M%n%n!ahela C%. +".:itt"'r! C%.# 1; 3 Atl.#


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3e pr%t i& the a(%'nt %& that pr%t )ere t% e "'-e$te t%"'$h a 'nilateral $%ntr%l %& an%ther $%rp%rati%n# 'nle"" ineethe &%r(er ha" pre+i%'"l, een e"i!ne , the in$%rp%rat%r" t%"er+e a" a (ere "'"iiar,# ran$h %r a!en$, %& the latter.E+ientl,# %ppel In'"trial Car an E*'ip(ent C%(pan, (ae'" %& it" %)ner"hip %& the %+er)hel(in! (a-%rit,


37/61

2pri(ar,# n%t t% "a, the "%le# %-e$t %& )hi$h the e+a"i%n %& thepa,(ent %& "'$h ta8. It i" thi" ai( %& the "$he(e that (a7e" itille!al.

We ha+e "ai a%+e that the $%ntra$t" %& "ale in+%l+e herein)ere all per&e$te in the :hilippine". Fr%( the &a$t" "tip'late inpara!raph I4 %& the a!ree "tate(ent %& &a$t"# it $learl, appear"that the :hilippine p'r$ha"er" ha t% )ait &%r %ppel In'"trialCar an E*'ip(ent C%(pan, t% $%(('ni$ate it" $%"t pri$e" t%%ppel 9:hilippine"@# In$.# )ere per&e$te in the :hilippine". Inth%"e $a"e" )here n% "'$h pri$e *'%tati%n" &r%( the A(eri$an$%rp%rati%n )ere neee# %& $%'r"e# the "ale" ee$te in th%"e$a"e" e"$rie in para!raph 4 %& the a!ree "tate(ent %& &a$t")ere# a" e8pre""e therein# tran"a$te Hin "'"tantiall, the "a(e(anner a" %'tline in para!raph 4I.H E+en the "in!le tran"a$ti%ne"$rie in para!raph 4I %& the a!ree "tate(ent %& &a$t" )a"al"% per&e$te in the :hilippine"# e$a'"e the $%ntra$tin! partie")ere here an the $%n"ent %& ea$h )a" !i+en here. While it i"tr'e that )hen the $%ntra$t )a" th'" per&e$te in the :hilippine"the pair %& Atla"0ie"el Marine En!ine" )ere in S)een an thea!ree(ent )a" t% eli+er the( C.I.F. %n!7%n!# the $%ntra$t %&"ale ein! $%n"en"'al per&e$te , (ere $%n"ent 9Ci+il C%e#

arti$le 1>; 1J Manre"a# th e.# p. 11@# the l%$ati%n %& thepr%pert, an the pla$e %& eli+er, i n%t (atter in the *'e"ti%n%& )here the a!ree(ent )a" per&e$te.

In "ai para!raph 4I# )e rea the &%ll%)in!# a" ini$atin! )herethe $%ntra$t )a" per&e$te# $%n"ierin! e&%rehan that %nepart,# %ppel 9:hilippine"@#In$.# )hi$h in $%nte(plati%n %& la)# a"t% that tran"a$ti%n# )a" the "a(e %ppel In'"trial CarE*'ip(ent C%.# )a" in the :hilippine"D

. . . %n April 1# 1

%& the C%e %& C%((er$e# the re"pe$ti+e $%ntra$t" )ere$%(plete &r%( the ti(e %& the a$$eptan$e , the l%$al ',er"#)hi$h happene in the :hilippine".

C%ntra$t" e8e$'te thr%'!h $%rre"p%nen$e "hall e $%(plete&r%( the ti(e an an")er i" (ae aeptin t%e proposition %rthe $%niti%n" , )hi$h the latter (a, e (%ie.H 9C%e %&C%((er$e# arti$le >; e(pha"i" "'pplie.@

A $%ntra$t i" a" a r'le $%n"iere a" entere int% at the pla$e)here the pla$e it i" per&%r(e. S% )here eli+er, i" re!are a"(ae at the pla$e %& eli+er,.H 91 C. K.# >?J?1# "e$ti%n >?1.@

9In the $%n"en"'al $%ntra$t %& "ale eli+er, i" n%t neee &%r it"per&e$ti%n.@

II. Appellant" "e$%n a""i!n(ent %& err%r $an e "'((aril,i"p%"e %&. It i" $lear that the r'lin! %& the Se$retar, %& Finan$e#E8hiit M# )a" n%t inin! 'p%n the trial $%'rt# ('$h le"" 'p%nthi" tri'nal# "in$e the 't, an p%)er %& interpretin! the la)" i"pri(aril, a &'n$ti%n %& the -'i$iar,. 9Ort'a +". Sin!"%nEn$arna$i%n# >< :hil.# J# .@ :lainti $ann%t e e8$'"e &r%(aiin! , thi" le!al prin$iple# n%r $an it pr%perl, e hear t% "a,that it relie %n the Se$retar," r'lin! an that# there&%re# the$%'rt" "h%'l n%t n%) appl, an interpretati%n at +arian$ethere)ith. The r'le %& stare deisis i" 'n%'tel, entitle t%(%re re"pe$t in the $%n"tr'$ti%n %& "tat'te" than theinterpretati%n" !i+en , %$er" %& the a(ini"trati+e ran$he"%& the !%+ern(ent# e+en th%"e entr'"te )ith the a(ini"trati%n%& parti$'lar la)". 6't thi" $%'rt# in :hilippine Tr'"t C%(pan, anS(ith# 6ell an C%. +". Mit$hell9>< :hil.# J# 3@# "aiD

. . . The r'le %& stare deisis i" entitle t% re"pe$t. Stailit, in thela)# parti$'larl, in the '"ine"" el# i" e"irale. 6't i%latr%'"re+eren$e &%r pre$eent# "i(pl, a" pre$eent# n% l%n!er r'le".M%re i(p%rtant than an,thin! el"e i" that $%'rt "h%'l eri!ht. . . .

III. In the +ie) )e ta7e %& the $a"e# an a&ter the i"p%"iti%n(ae a%+e %& the r"t a""i!n(ent %& err%r# it e$%(e"'nne$e""ar, t% (a7e an, "pe$i$ r'lin! %n the thir# &%'rth# &th#"i8th# an "e+enth a""i!n(ent" %& err%r# all %& )hi$h arene$e""aril, i"p%"e %& a+er"el, t% appellant" $%ntenti%n.

Where&%re# he -'!(ent appeale &r%( i" ar(e# )ith $%"t" %&%th in"tan$e" a!ain"t appellant. S% %rere.

)eparate *pinions

+ER/EC,*! J., $%n$'rrin!D

We &'ll, a!ree )ith the )ell)ritten e$i"i%n penne , Mr. K'"ti$e ila% in thi" $a"e. We %nl, )i"h t% a that the in!eni%'"e+i$e %& e+ain! the pa,(ent %& ta8e"# i" n%t a ne) %ne. It i"%nl, %ne %& the (ani&%l (ani&e"tati%n" %& the "hre)ne"" %& the(a"ter(in" ehin "%(e p%)er&'l $%rp%rati%n" )h%# )ith%'t a,$%(p'n$ti%n# % n%t "t%p at a%ptin! an, "$he(e , )hi$h the$%ntr%llin! $apitali"t" (a, !et e+en ri$her an ri$her# "%(eti(e"at !%+ern(ent e8pen"e# "%(eti(e" , "*'eeBin! $re'l%'" %r

i!n%rant "(all "hareh%ler"# "%(eti(e" )ith the e8pl%itati%n %&the helple"" p'li$ at lar!e# an "%(eti(e" at !reat "a$ri$e %&all the three entitie".

The ","te( %& $%rp%rati%n $%(ine"# %& h%lin! an "'"iiar,$%rp%rati%n"# %& "preain! an interl%$7in! $%(panie"# ha" n%)ell e+el%pe an ha" !r%)n "% p%)er&'l that e+en the )i"e"t!%+ern(ent ha een 'nale t% e&en it"el& an pr%te$t thepe%ple &r%( the $r'"hin! tenta$le" %& the (%ne,e %$t%p'"e". Iti" tr'e that in the Unite S

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