Scribd
Upload
7 views

Digest

The document outlines several legal cases involving the piercing of the corporate veil, where courts determined that the separate legal personality of corporations could be disregarded due to fraudulent conduct or to prevent injustice. In Cordon v. Balicanta, the court ruled that the respondent could not absolve himself of fiduciary duties despite the corporate structure, while in Concept Builders v. NLRC, the court allowed piercing the veil to hold the corporation accountable for labor law violations. Other cases similarly illustrate the circumstances under which corporate entities may be treated as alter egos or instruments of fraud.

Uploaded by

Tricia Mae Cruz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
7 views

Digest

The document outlines several legal cases involving the piercing of the corporate veil, where courts determined that the separate legal personality of corporations could be disregarded due to fraudulent conduct or to prevent injustice. In Cordon v. Balicanta, the court ruled that the respondent could not absolve himself of fiduciary duties despite the corporate structure, while in Concept Builders v. NLRC, the court allowed piercing the veil to hold the corporation accountable for labor law violations. Other cases similarly illustrate the circumstances under which corporate entities may be treated as alter egos or instruments of fraud.

Uploaded by

Tricia Mae Cruz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

1. Cordon v. Balicanta, A.C. No.

2797, October 4, 2002


Facts:
Rosaura Cordon filed a complaint for disbarment against respondent
Balicanta, who helped her settle her late husband's estate and organized a
corporation to develop the land. Balicanta single-handedly ran the
corporation, signing a voting trust agreement and special power of attorney.
The corporation became in debt and neared foreclosure, and Balicanta
refused to cooperate. He blamed stockholders for the corporation's failure
and absolved himself.

Issue:
Whether the respondent can invoke the separate personality of the
corporation to absolve him from exercising these duties over the properties
turned over to him by complainant.

Ruling:
No, the Court holds that respondent cannot invoke the separate personality
of the corporation to absolve him from exercising these duties over the
properties turned over to him by complainant. He blatantly used the
corporate veil to defeat his fiduciary obligation to his client, the complainant.
Toleration of such fraudulent conduct was never the reason for the creation of
said corporate fiction. The massive fraud perpetrated by respondent on the
complainant leaves us no choice but to set aside the veil of corporate entity.
For purposes of this action therefore, the properties registered in the name of
the corporation should still be considered as properties of complainant and
her daughter. The respondent merely held them in trust for complainant (now
an ailing 83-year-old) and her daughter. The properties conveyed fraudulently
and/or without the requisite authority should be deemed as never to have
been transferred, sold or mortgaged at all. Respondent shall be liable, in his
personal capacity, to third parties who may have contracted with him in good
faith.

2. Concept Builders v. NLRC, GR No. 108734, May 29, 1996


Facts: Petitioner Concept Builders, Inc., a domestic corporation engaged in
the construction business. Private respondents were employed by said
company as laborers, carpenters and riggers. However, they were illegally
dismissed.
Aggrieved, private respondents filed a complaint for illegal dismissal. The
Labor Arbiter rendered judgment ordering petitioner to reinstate private
respondents and to pay them back wages. It became final and executory.
The alias Writ of Execution cannot be enforced by the sheriff because all the
employees inside petitioner’s premises at 355 Maysan Road, Valenzuela,
Metro Manila, claimed that they were employees of Hydro Pipes Philippines,
Inc. (HPPI) and not by petitioner. Thus, NLRC issued a break-open order
against Concept Builders and HPPI.
Issue: Whether the piercing the veil of corporate entity is proper.
Held: Yes.
It is a fundamental principle of corporation law that a corporation is an entity
separate and distinct from its stockholders and from other corporations to
which it may be connected. But, this separate and distinct personality of a
corporation is merely a fiction created by law for convenience and to promote
justice. So, when the notion of separate juridical personality is used to defeat
public convenience, justify wrong, protect fraud or defend crime, or is used as
a device to defeat the labor laws, this separate personality of the corporation
may be disregarded or the veil of corporate fiction pierced. This is true
likewise when the corporation is merely an adjunct, a business conduit or an
alter ego of another corporation.
The conditions under which the juridical entity may be disregarded vary
according to the peculiar facts and circumstances of each case. No hard and
fast rule can be accurately laid down, but certainly, there are some probative
factors of identity that will justify the application of the doctrine of piercing
the corporate veil, Clearly, petitioner ceased its business operations in order
to evade the payment to private respondents of back wages and to bar their
reinstatement to their former positions. HPPI is obviously a business conduit
of petitioner corporation and its emergence was skillfully orchestrated to
avoid the financial liability that already attached to petitioner corporation.

3. Gold Line Tours v. Heirs of Lacsa, G.R. No. 159108, June 18, 2012
Google

4. Tan Boon Bee v. Jarencio, GR No. L- 41337, June 30, 1988


5. In 1972, Anchor Supply Co. (ASC), through Tan Boon Bee, entered into a
contract of sale with Graphic Publishing Inc. (GPI) whereby ASC shall deliver
paper products to GPI. GPI paid a down payment but defaulted in paying the
rest despite demand from ASC. ASC sued GPI and ASC won. To satisfy the
indebtedness, the trial court, presided by Judge Hilarion Jarencio, ordered that
one of the printing machines of GPI be auctioned. But before the auction can be
had, Philippine American Drug Company (PADCO) notified the sheriff that
PADCO is the actual owner of said printing machine. Notwithstanding, the
sheriff still went on with the auction sale where Tan Boon Bee was the highest
bidder.
6. Later, PADCO filed with the same court a motion to nullify the sale on
execution. The trial court ruled in favor of PADCO and it nullified said auction
sale. Tan Boon Bee assailed the order of the trial court. Tan Boon Bee averred
that PADCO holds 50% of GPI; that the board of directors of PADCO and GPI
is the same; that the veil of corporate fiction should be pierced based on the
premises. PADCO on the other hand asserts ownership over the said printing
machine; that it is merely leasing it to GPI.
7. ISSUE: Whether or not the veil of corporate fiction should be pierced.
8. HELD: Yes. PADCO, as its name suggests, is a drug company not engaged in
the printing business. So it is dubious that it really owns the said printing
machine regardless of PADCO’s title over it. Further, the printing machine, as
shown by evidence, has been in GPI’s premises even before the date when
PADCO alleged that it acquired ownership thereof. Premises considered, the
veil of corporate fiction should be pierced; PADCO and GPI should be
considered as one. When a corporation is merely an adjunct, business conduit
or alter ego of another corporation the fiction of separate and distinct
corporation entities should be disregarded.
9. WPM International v. Labayen, G.R. No. 182770, Sept. 17, 2014

Facts:
In 1990, WPM International Trading, Inc. and Fe Corazon Labayen entered into
a management agreement for Quickbite restaurant. Labayen contracted CLN
Engineering Services for renovations, but only paid P320,000, leaving a
balance of P112,876.02. CLN filed a complaint for damages, but later
amended it to exclude Manlapaz. Labayen filed a separate complaint for
damages, and Manlapaz argued WPM's separate personality. The RTC held
Manlapaz personally liable for reimbursement.

Issue:
1. Whether WPM is a mere instrumentality, alter-ego, and business conduit of
Manlapaz.
Ruling:
The Supreme Court found merit in the petition, holding that the application of
piercing the corporate veil was unwarranted, as the respondent failed to
prove that Manlapaz controlled WPM to commit a wrong or breach a duty
causing unjust loss. The SC also emphasized that piercing the corporate veil
is done with caution and only if a clear misuse justifying a wrong, fraud, or
deception is established.
The doctrine of piercing the corporate veil applies when it’s evident that a
corporation is used as a shield to avoid liability, commit fraud, or perpetrate a
deception, particularly when it’s the alter ego or a business conduit of
another person. There must be control, used to commit a wrong, and
resulting in an unjust loss.
1.Gesolgon And Santos v. Cyberone Ph., Inc., G.R. No. 210741, Oct. 14, 2020
studocu
2. Kho, SR. v. Magbanua, et. al. GR No. 237246, July 24, 2019
Digest Google
3. ABS-CBN v. Hiilario, et. al. GR No. 193136, July 10, 2019
Batas
4.Zambrano, et. al., v. Phil. Carpet, GR No. 224099, June 21, 2017
Studocu
5.CMCI v. ATSI, G.R. NO. 202454, April 25, 2017
Digest google
6.Ang Lee, Doing Business As "Super Lamination Services" vs. SMSLSNAFLU-KMU,
GR No. 193816, November 21, 2016
7. PNB v. Hydro Resources, G.R. No. 167530, March 13, 2013
8. Maricalum Mining v. Florentino, G.R. No. 221813 July 23, 2018
9. Virata v. Ng Wee, G.R. No. 220926, July 5, 2017
10. Livesey v. Binswanger, G.R. No. 177493, March 19, 2014
11.Lanuza v. BF Corporation, G.R. No. 174938, October 1, 2014
12. Ramirez v. Mar Fishing, Inc, G.R. No. 168208, June 13, 2012
13. Sarona v. NLRC G.R. No. 185280, January 18, 2012
14. Pantranco Employees Asso., et al. vs. NLRC, G.R. No. 170689 March 17, 2009
15. Cagayan Valley Drug Corp v. CIR, GR No. 151413, February 13, 2008

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy