Law Recit Reviewer

SECOND DIVISION

[G.R. No. 210741, October 14, 2020]

MARIA LEA JANE I. GESOLGON AND MARIE STEPHANIE N. SANTOS, PETITIONERS, VS.
CYBERONE PH., INC., MACIEJ MIKRUT, AND BENJAMIN JUSON, RESPONDENTS.

Background
- Gesolgon and Santos were initially hired as part-time remote Customer Service Representatives
for CyberOne AU, an Australian company.
- Later promoted to full-time employees and Supervisors in CyberOne AU.
- Asked by Maciej Mikrut, CEO of CyberOne AU and CyberOne PH, to become dummy directors
of CyberOne PH, with promotions to Managers and salary increases.

Conflict
- Disputes arose when salaries were reduced and options given in 2011: indefinite furlough, entry-
level position, or resignation.
- Filed a complaint for illegal dismissal, non-payment of salaries, and other claims against
CyberOne PH, Mikrut, and Juson.
- Labor Arbiter ruled in favor of respondents, stating petitioners were shareholders, not regular
employees.
- NLRC reversed, declaring petitioners were employees of both CyberOne AU and CyberOne PH.
- CA overturned NLRC, stating no employer-employee relationship with CyberOne PH.

Decision
- Supreme Court denied the petition, affirming CA's decision.
- No evidence proved an employer-employee relationship with CyberOne PH.
- Piercing the corporate veil deemed unwarranted; no jurisdiction over CyberOne AU.
- Petitioners considered stockholders, not employees.

Key People Involved

Roles of Key People Involved:

1. Maria Lea Jane I. Gesolgon:

- Initially hired as a part-time remote Customer Service Representative for CyberOne AU.
- Promoted to a full-time employee and later to the position of Supervisor in CyberOne AU.
- Asked to become a dummy director of CyberOne PH, later promoted to Manager with
associated salary increases.

2. Marie Stephanie N. Santos:

- Initially hired as a part-time remote Customer Service Representative for CyberOne AU.
- Promoted to a full-time employee and later to the position of Supervisor in CyberOne AU.
- Asked to become a dummy director of CyberOne PH, later promoted to Manager with
associated salary increases.

3. CyberOne PH, Inc.:

- The company where Gesolgon and Santos were asked to become dummy directors.
- Involved in the dispute over the alleged illegal dismissal of the petitioners.

4. Maciej Mikrut:
- Chief Executive Officer (CEO) of both CyberOne AU and CyberOne PH.
- Asked Gesolgon and Santos to become dummy directors of CyberOne PH.
- Central figure in the case, accused of orchestrating the alleged illegal dismissal and salary
issues.

5. Benjamin Juson:
 - Respondent in the case involving the alleged illegal dismissal.
- Possibly associated with CyberOne PH and implicated in the decisions made regarding the
employment status of Gesolgon and Santos.
Date of Decision:
- The decision was made on an unspecified date but referred to a September 2, 2013, CA decision
and a January 10, 2014, resolution.

Connection of this Case to Doctrine of Separate Juridical Personality

The Doctrine of Separate Juridical Personality is a legal principle that recognizes a corporation as
a separate legal entity distinct from its shareholders or directors. This doctrine aims to protect the
rights and liabilities of the corporation, ensuring that it is treated as a separate person in the eyes
of the law. However, there are instances where the corporate veil can be pierced, allowing the
courts to look beyond the corporate entity and hold individuals accountable for the actions of the
corporation.

In the case of Gesolgon and Santos against CyberOne PH, the Doctrine of Separate Juridical
Personality is relevant in determining the nature of their relationship with the company. The key
points related to this doctrine in the case are as follows:

1. Promotion and Involvement in Management:

- Gesolgon and Santos were initially hired as part-time remote Customer Service Representatives
for CyberOne AU and later promoted to full-time employees and Supervisors. They were then
asked to become dummy directors of CyberOne PH, later being promoted to Managers. This
progression in their roles within the company indicates a level of involvement in the management
structure.
2. Decision on Employment Status:
- The conflict arose when salaries were reduced, and the petitioners were given options in 2011,
including indefinite furlough, entry-level position, or resignation. The legal battle focused on
whether Gesolgon and Santos were employees of CyberOne PH or not.
3. Labor Arbiter, NLRC, and CA Decisions:
- The Labor Arbiter initially ruled in favor of the respondents, stating that the petitioners were
shareholders, not regular employees, suggesting the application of the Doctrine of Separate
Juridical Personality. However, the NLRC reversed this decision, considering Gesolgon and
Santos as employees of both CyberOne AU and CyberOne PH. The CA later overturned the NLRC
decision, asserting that there was no employer-employee relationship with CyberOne PH.
4. Supreme Court Decision:
- The Supreme Court denied the petition, affirming the CA's decision. The court found no
evidence proving an employer-employee relationship with CyberOne PH. The corporate veil was
deemed unwarranted to be pierced, and the petitioners were considered stockholders, not
employees.

In summary, the case highlights the application of the Doctrine of Separate Juridical Personality
in determining the legal relationship between employees and corporations. The courts, in this
instance, emphasized the lack of evidence establishing an employer-employee relationship with
CyberOne PH, ultimately upholding the separate legal entity status of the corporation.
 FIRST DIVISION

[G.R. No. 246270. June 30, 2021]

SUSAN R. ROQUEL, PETITIONER, VS. PHILIPPINE NATIONAL BANK AND PNB GLOBAL
REMITTANCE AND FINANCIAL CO. (HK) LTD., RESPONDENTS.

Facts
- Susan R. Roquel was hired by PNB International Finance Ltd. (PNB-IFL), a subsidiary of the
Philippine National Bank (PNB), in 1990.
- Roquel underwent multiple transfers within the PNB Hong Kong Group, including assignments
at PNB's Hong Kong Branch (PNB-HK) and PNB's Remittance Center Limited (PNB-RCL).
- PNB-RCL later merged with PNB Global Remittance and Finance Co. (HK) Ltd. (PNB Global),
with Roquel absorbed by PNB Global.
- Roquel was terminated by PNB Global in December 2011, leading to her filing a complaint for
illegal dismissal.

People Involved
- Susan R. Roquel: Employee who filed a complaint for illegal dismissal.
- Philippine National Bank (PNB): Respondent and employer of Roquel.
- PNB-IFL, PNB-HK, PNB-RCL, and PNB Global: Entities within the PNB Hong Kong Group
involved in Roquel's transfers.

Background
- Roquel's employment spanned 21 years, involving transfers among various entities within the
PNB Hong Kong Group.
- Dispute arose over Roquel's termination by PNB Global in 2011.
 Conflict
- Roquel asserted an employer-employee relationship with PNB, while PNB claimed she was an
employee of PNB Global.
- Jurisdictional issues and the application of the alter ego doctrine were central to the dispute.

Decision
- The Labor Arbiter initially ruled in favor of Roquel, finding her illegally dismissed and awarding
monetary compensation.
- The National Labor Relations Commission (NLRC) reversed the decision, asserting no
jurisdiction over the case.
- The Court of Appeals affirmed the NLRC's decision, stating PNB Global was Roquel's sole
employer.
- The Supreme Court, however, disagreed, applying the alter ego theory to pierce the corporate
veil, concluding that PNB was Roquel's employer.
- The decision reinstated the Labor Arbiter's ruling, declaring Roquel illegally dismissed and
entitled to backwages, separation pay, moral and exemplary damages, and attorney's fees.

Conclusion
The Supreme Court reversed the decisions of the lower courts, determining that PNB was Roquel's
employer. The alter ego theory was applied, emphasizing the interconnectedness of entities within
the PNB Hong Kong Group, and Roquel was deemed illegally dismissed, entitled to various
compensations.

Connection of this Case to Doctrine of Piercing the Corporate Veil

The case of Susan R. Roquel and the Philippine National Bank (PNB) involves the application of
the Doctrine of Piercing the Corporate Veil, particularly through the use of the alter ego theory.
The Doctrine of Piercing the Corporate Veil allows the courts to disregard the separate legal
personality of a corporation and hold its shareholders or parent company personally liable for the
company's actions. Here's how the case relates to this doctrine:

1. Multiple Entities Within PNB Hong Kong Group

 - Roquel underwent multiple transfers within the PNB Hong Kong Group, involving PNB
International Finance Ltd. (PNB-IFL), PNB's Hong Kong Branch (PNB-HK), PNB's Remittance
Center Limited (PNB-RCL), and PNB Global Remittance and Finance Co. (HK) Ltd. (PNB
Global).
- The existence of these entities and their interconnectedness sets the stage for potential issues
regarding the separation of corporate personalities.

2. Termination Dispute and Jurisdictional Issues:

- The conflict arose when Roquel was terminated by PNB Global, leading to a dispute over the
employer-employee relationship. Roquel claimed an employer-employee relationship with PNB,
while PNB asserted she was an employee of PNB Global.
- Jurisdictional issues emerged as the courts had to determine which entity had jurisdiction over
Roquel's case.

3. Application of Alter Ego Theory:

- The alter ego theory is a specific application of the Doctrine of Piercing the Corporate Veil. It
is invoked when there is such a unity of interest and ownership between the corporation and its
shareholders or related entities that the separate personalities of the corporation and the individuals
or entities are no longer distinguishable.
- In this case, the Supreme Court applied the alter ego theory to pierce the corporate veil. The
court found that the various entities within the PNB Hong Kong Group were so interrelated that
they effectively operated as one, justifying the disregard of their separate legal personalities.

4. Supreme Court Decision:

- The Supreme Court disagreed with the lower courts, particularly the Court of Appeals, which
affirmed the NLRC's decision that PNB Global was Roquel's sole employer.
- By applying the alter ego theory, the Supreme Court concluded that PNB was the true employer
of Roquel. The interconnectedness of the entities within the PNB Hong Kong Group played a
crucial role in piercing the corporate veil.

5. Remedies Granted:
- The Supreme Court's decision resulted in the reinstatement of the Labor Arbiter's ruling,
declaring Roquel illegally dismissed. Roquel was then entitled to various compensations, including
backwages, separation pay, moral and exemplary damages, and attorney's fees.
In summary, the case illustrates the application of the Doctrine of Piercing the Corporate Veil,
specifically through the alter ego theory, to establish the true employer of an individual within a
complex corporate structure. The interconnectedness of entities and the unity of interest played a
pivotal role in piercing the corporate veil and holding the parent company (PNB) liable for the
actions concerning the termination of the employee (Roquel).
 SECOND DIVISION

[G.R. No. 224307, August 6, 2018]

THE MISSIONARY SISTERS OF OUR LADY OF FATIMA (PEACH SISTERS OF LAGUNA),

represented by Rev. Mother Ma. Concepcion R. Realon, et al., PETITIONERS, VS. AMANDO V.
ALZONA, et al., RESPONDENTS.

Parties Involved:
- Petitioner: The Missionary Sisters of Our Lady of Fatima, also known as the Peach Sisters of
Laguna.
- Respondents: Legal heirs of Purificacion Y. Alzona.

Background
- The petitioner is a religious and charitable group established in 1989 with a primary mission to
care for abandoned and neglected elderly persons.
- Purificacion Y. Alzona, a spinster and owner of certain properties, became a benefactor of the
petitioner in 1996, supporting their community and works.
- In 1999, Purificacion decided to donate her house and lot to the petitioner, formalized through
a handwritten letter in October 1999 and a Deed of Donation in August 2001.
- The petitioner, not yet registered with the Securities and Exchange Commission (SEC) at the
time of the donation, filed its registration application in August 2001.

Conflict
- After Purificacion's death in October 2001, her brother, Amando Y. Alzona, filed a complaint
seeking to annul the Deed of Donation, arguing that the petitioner, being unregistered with the
SEC at the time, had no legal capacity to accept the donation.
 Decision
1. The Regional Trial Court (RTC) initially dismissed the complaint on August 14, 2013, ruling
that the essential elements of a donation were present, and the petitioner's capacity as a de facto
corporation was valid.
2. The Court of Appeals (CA), on January 7, 2016, partially granted the respondents' appeal,
declaring the Deed of Donation void on the grounds that the petitioner was not considered a de
facto corporation, lacking a bona fide attempt to incorporate at the time of the donation.
3. The Supreme Court (SC) reversed the CA's decision. The SC ruled that the petitioner, although
not a de facto corporation at the time, could be considered a corporation by estoppel. Purificacion's
intent to donate was clear, and her subsequent actions ratified the donation. The SC emphasized
the importance of promoting charitable works and upheld the validity of the donation.

Key Points
- The SC recognized the doctrine of corporation by estoppel, holding that parties dealing with a
non-existent corporation are estopped from denying its legal existence when enforcing a contract.
- The genuine intent of Purificacion to donate was upheld, and subsequent acts ratified the
donation, rendering it valid.
- The SC emphasized the promotion of charitable works and recognized benevolent giving as an
essential social fabric.

The case described involves the recognition and application of the doctrine of "Corporation by
Estoppel." To understand how it connects to the concepts of De Facto Corporations vs.
Corporations by Estoppel, let's delve into the key points and legal principles highlighted in the
case:

De Facto Corporations

1. Definition: A de facto corporation is an entity that, despite not having completed all the statutory
requirements for incorporation, is treated as if it were a validly formed corporation due to a good
faith attempt to comply with the law.

2. Key Requirement: To be considered a de facto corporation, there should be a bona fide attempt
to comply with the incorporation requirements, and the entity should act in good faith as if it were
a valid corporation.
Corporations by Estoppel

1. Definition: Corporations by Estoppel is a legal doctrine that prevents a party from denying the
existence of a corporation when they have treated it as such, entered into contracts with it, or
otherwise relied on its representation as a legal entity.

2. Key Requirement: The crucial element is the reliance or actions of third parties who, despite
knowing that the entity is not validly incorporated, treat it as a corporation and are then estopped
from challenging its legal existence.

Connection to the Case:

1. Initial Lack of De Facto Corporation Status:

- The Court of Appeals (CA) declared the Deed of Donation void, arguing that the petitioner was
not considered a de facto corporation because it lacked a bona fide attempt to incorporate at the
time of the donation.

2. Recognition of Corporation by Estoppel by the Supreme Court (SC):

- The Supreme Court (SC) reversed the CA's decision and applied the doctrine of "Corporation
by Estoppel."
- The SC held that even though the petitioner was not a de facto corporation at the time of the
donation, it could still be considered a corporation by estoppel.

3. Intent of the Donor and Subsequent Acts:

- The SC emphasized the genuine intent of Purificacion to donate and highlighted her subsequent
actions, which ratified the donation.
- This recognition aligns with the principle of Corporation by Estoppel, where the actions and
intent of the parties involved play a crucial role in determining the legal existence of the
corporation.
Overall Connection:

- While the case initially involves a lack of de facto corporation status, the SC's decision introduces
the concept of Corporation by Estoppel to validate the donation.
- The recognition of the doctrine of Corporation by Estoppel is essential in situations where the
formal requirements for incorporation are not fully met, but parties have treated the entity as a
valid corporation, preventing them from denying its legal existence later on.

In summary, the case illustrates the shift from focusing solely on de facto corporation status to
embracing the concept of Corporation by Estoppel, emphasizing the importance of parties' actions
and intent in determining the legal status of an entity.
 THIRD DIVISION

[G.R. No. 227990, March 7, 2018]

CITYSTATE SAVINGS BANK, PETITIONERS, VS. TERESITA TOBIAS AND SHELLIDIE

VALDEZ, RESPONDENTS.

- Petitioner: Citystate Savings Bank

- Rolando Robles, a certified public accountant and branch manager

- Respondents:
- Teresita Tobias: Meat vendor at Baliuag Public Market
- Shellidie Valdez: Daughter of Teresita Tobias, co-depositor

- Conflict:
- Robles persuaded Tobias to open an account and invest in a high-interest back-to-back scheme.
- Robles misappropriated the invested funds for personal use, failing to remit promised interest.

- Trial Court Decision:

- RTC ruled in favor of respondents, ordering Robles to pay damages.

- Court of Appeals (CA) Decision:

- Modified the decision, holding both the bank (petitioner) and Robles jointly and solidarily liable
for damages.
- Applied the doctrine of apparent authority.
- Supreme Court (SC) Decision:
- Denied the petition for review, affirming the CA's decision.
- Emphasized the bank's liability for acts within the scope of apparent authority.
- Held the bank solidarily liable, stressing the fiduciary duty of banks to exercise due diligence.
- Applied the doctrine of estoppel, as the bank was estopped from denying apparent authority.
- Highlighted the public interest nature of the banking business and the need for meticulous care
in handling depositors' accounts.

-Doctrine of Apparent Authority: The Doctrine of Apparent Authority is a legal principle that deals
with the authority of an agent as perceived by third parties based on the actions and representations
of the principal (the person or entity the agent represents). In essence, this doctrine holds that if a
principal creates the appearance or gives the impression that an agent has the authority to act on
its behalf, the principal is bound by the agent's actions even if the agent exceeds their actual
authority.
- Application in the Case:
- The Supreme Court (SC) applied the doctrine of apparent authority in holding the petitioner
(Citystate Savings Bank) solidarily liable for the actions of its branch manager, Rolando Robles.
- Despite the petitioner's argument that Robles acted in his personal capacity, the SC ruled that
the bank was estopped from denying apparent authority.
- The doctrine holds that if a principal (in this case, the bank) allows an agent (Robles) to
perform acts that lead a third party (Tobias and Valdez) to believe the agent has authority, the
principal is bound by the agent's actions within the scope of that apparent authority.

- Estoppel and Liability:

- The SC emphasized the bank's fiduciary duty and the necessity for meticulous care in handling
depositors' accounts.
- The bank, through its actions and representations, created an appearance of authority for
Robles to handle financial transactions on its behalf.
- The bank, being aware of Robles' position as branch manager, was estopped from denying his
apparent authority.
 - This estoppel led to the bank's solidary liability for damages caused by Robles'
misappropriation, as the apparent authority extended to the investment scheme involving Tobias
and Valdez.

- Public Interest in Banking Business:

- The case underscored the public interest nature of the banking business, emphasizing the
importance of banks exercising the highest degree of diligence and care.
- The doctrine of apparent authority, in this context, reinforces the idea that banks must take
responsibility for the actions of their agents when dealing with clients.
- The apparent authority doctrine serves as a protective mechanism for clients and third parties
who reasonably rely on representations made by the bank's agents.

In summary, the case illustrates the connection to the Doctrine of Apparent Authority by
highlighting how the bank, through its actions and representations, created an appearance of
authority for its branch manager. The bank's subsequent estoppel from denying this apparent
authority resulted in solidary liability for damages caused by the agent's actions. The doctrine
reinforces the principle that banks must exercise due diligence in overseeing their employees and
must be accountable for actions undertaken within the scope of apparent authority.
 THIRD DIVISION

[G.R. No. 202364. August 30, 2017]

ARTURO C. CALUBAD, PETITIONER, VS. RICARCEN DEVELOPMENT CORPORATION,

RESPONDENT.

Facts
1. Respondent Ricarcen Development Corporation (Ricarcen) is a domestic corporation engaged
in renting out real estate.
2. Marilyn R. Soliman was the president of Ricarcen from 2001 to August 2003.
3. On October 15, 2001, Marilyn, acting as Ricarcen's president, took out a P4,000,000.00 loan
from petitioner Arturo C. Calubad, secured by a real estate mortgage.
4. The loan terms included compounded interest and a penalty for delay in payment.
5. Marilyn, through subsequent amendments, increased the loan to P5,000,000.00 and later
obtained an additional P2,000,000.00 loan from Calubad.
6. To prove her authority, Marilyn presented a Board Resolution and Secretary's Certificates dated
October 15, 2001, December 6, 2001, and May 8, 2002.
7. After Ricarcen failed to pay the loan, Calubad initiated extrajudicial foreclosure proceedings,
becoming the highest bidder and obtaining a Certificate of Sale on March 27, 2003.
8. Ricarcen claimed it learned of Marilyn's transactions in July 2003 and filed a complaint for
annulment of mortgage and damages.

People Involved
- **Arturo C. Calubad:** Petitioner and lender.
- **Ricarcen Development Corporation:** Respondent and borrower.
- **Marilyn R. Soliman:** Former president of Ricarcen, acting on its behalf in loan transactions.
 Summary of Background:
Ricarcen, represented by Marilyn R. Soliman, borrowed money from Arturo C. Calubad and
secured the loan with a real estate mortgage. After Ricarcen failed to repay, Calubad initiated
foreclosure proceedings, leading to a legal conflict over the validity of the mortgage contracts and
foreclosure.

Conflict:
Ricarcen denied authorizing Marilyn to obtain loans and mortgage its property. It argued that
documents presented as proof of Marilyn's authority were fabricated. Calubad asserted that
Ricarcen, through its officers, clothed Marilyn with apparent authority, and it was estopped from
denying the contracts.

Decision
The Regional Trial Court granted Ricarcen's complaint, annulling the mortgage contracts and
foreclosure. The Court of Appeals affirmed this decision, dismissing Calubad's appeal. The courts
held that the documents presented by Marilyn were fabricated, and Ricarcen was not estopped
from denying her authority. Calubad appealed to the Supreme Court, arguing that Ricarcen was
estopped and had benefited from the loans. The Supreme Court ruled in favor of Calubad, stating
that Marilyn had apparent authority, and Ricarcen was estopped from denying it. Damages were
not awarded.

Connection to the Doctrine of Apparent Authority:

1. Marilyn's Actions as President:

- Marilyn, as the president of Ricarcen, acted on behalf of the corporation in obtaining loans and
securing them with a real estate mortgage.
- The doctrine of apparent authority is relevant when agents or officers, like Marilyn, have the
apparent authority to represent the corporation in financial transactions.

2. Board Resolution and Secretary's Certificates:

- To prove her authority, Marilyn presented a Board Resolution and Secretary's Certificates dated
October 15, 2001, December 6, 2001, and May 8, 2002.
 - These documents, if valid and accepted by third parties like Calubad, could establish Marilyn's
apparent authority to enter into loan agreements on behalf of Ricarcen.

3. Ricarcen's Allegation of Fabricated Documents:

- Ricarcen later claimed that the documents presented by Marilyn were fabricated, challenging
the validity of the evidence presented to establish her apparent authority.
- The controversy over the authenticity of these documents directly impacts the application of
the doctrine of apparent authority.

4. Calubad's Estoppel Argument:

- Calubad argued that Ricarcen, through its officers, clothed Marilyn with apparent authority,
and the corporation was estopped from denying the validity of the contracts.
- The doctrine of apparent authority often involves the concept of estoppel, where a principal is
precluded from denying the authority of an agent due to its own actions or representations.

5. Foreclosure Proceedings and Highest Bidder Status:

- After Ricarcen's failure to repay the loans, Calubad initiated foreclosure proceedings, becoming
the highest bidder and obtaining a Certificate of Sale.
- The doctrine of apparent authority is significant in understanding whether Marilyn had the
authority to subject Ricarcen's property to foreclosure through her actions.

6. Court Decisions and Application of Apparent Authority:

- The Regional Trial Court and the Court of Appeals ruled in favor of Ricarcen, annulling the
mortgage contracts and foreclosure, stating that the documents were fabricated.
- The Supreme Court, in contrast, ruled in favor of Calubad, emphasizing that Marilyn had
apparent authority, and Ricarcen was estopped from denying it.

In summary, the case's connection to the Doctrine of Apparent Authority lies in Marilyn's
representation of Ricarcen, the authenticity of documents proving her authority, and the
application of estoppel. The conflicting decisions from different courts highlight the complexity
of establishing and challenging apparent authority in the context of corporate transactions.