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Yamamoto v Nishino; 551 SCRA 447 4. Kukan v Reyes; GR No. 182729; 9/20/2010 5. Francisco Motors v CA; GR No. 100812; 6/25/1999 6. Filipinas Broadcasting v Ago Medical; GR No. 141994; 1/17/2005 7. Crystal v BPI; GR No. 172428; 11/28/2008 8. DBP v Ong; 460 SCRA 170 9. Locsin v Nissan; GR No. 185567; Oct. 20, 2010 10. International Express Travel v CA; GR No. 119001; Oct. 19, 2000 11. Gala v Ellies; 418 SCRA 431 12. Industrial Refactories Corp of the PH v CA/SEC/Refractories Corp of the PH, 390 SCRA 252 13. Gokongwei JR v CA; 89 SCRA 336 14. Aurbach v Sanitary wares; 180 SCRA 130 15. People’s Aircargo & Warehousing Co, Inc. v CA; 297 SCRA 170 16. Nakpil v IBC; GR No. 144767; ,March 31, 2002 17. Ong v CA; GR No. 119858; April 29, 2003 18. Matling v Koros; GR No. 157802; Oct. 13, 2010 19. Francisco v Mallen Jr., GR No. 173169; Sept. 23, 2010 20. Cebu Country Club v Elizagaque; 542 SCRA 65
San Juan Structural V. CA (1998) Lessons Applicable: Definition of a Close Corporation (Corporate Law)
February 14 1989: San Juan Structural and Steel Fabricators, Inc.'s (San Juan) entered into an agreement with Motorich Sales Corporation (Motorich) for the transfer to it of a parcel of land containing an area of 414 square meters
San Juan paid the down payment of P100,000, the balance to be paid on or before March 2, 1989 March 1, 1989: Mr. Andres T. Co, president of San Juan, wrote a letter course through Motorich's broker requesting for a computation of the balance to be paid
Linda Aduca, who wrote the computation of the balance March 2, 1989: San Juan was ready with the amount corresponding to the balance, covered by Metrobank Cashier's Check, payable to Motorich
they were supposed to meet in the office of San Juan but Motorich's treasurer, Nenita Lee Gruenberg, did not appear
Motorich refused to execute the Transfer of Rights/Deed of Assignment which is necessary to transfer the certificate of title
ACL Development Corp. (ACL) is impleaded as a necessary party since Transfer Certificate of Title No. (362909) 2876 is still in its name
JNM Realty & Development Corp. (JNM) is impleaded as a necessary party in view of the fact that it is the transferor of right in favor of Motorich
defeat public convenience. Since "Spouses Reynaldo L. Gruenberg.none here Sec. statutorily granted privilege of a corporate veil may be used only for legitimate purposes utilized as a shield to commit fraud. — A close corporation. illegality or inequity. April 6. petition is hereby DENIED Gruenberg.000 and exemplary damages of P100. San Juan suffered moral and nominal damages of P500. Definition and Applicability of Title. not a corporate receipt. their actions "cannot bind the corporation. under Transfer Certificate of Title No. and Andres Co signed the contract but that cannot bind Motorich. and it bears only Nenita Gruenberg's signature GR: acts of corporate officers within the scope of their authority are binding on the corporation.00 Pesos CA affirmed RTC for dismissing San Juan argues that the veil of corporate fiction of Motorich should be pierced because it is a close corporation. 1989: ACL and Motorich entered into a Deed of Absolute Sale the Registry of Deeds of Quezon City issued a new title in the name of Motorich Sales Corporation. unless it has ratified such acts or is estopped from disclaiming them.00 and P100. because it never authorized or ratified such sale or even the receipt of the earnest money A corporation is a juridical person separate and distinct from its stockholders or members San Juan failed to prove otherwise The document is a hand-written one. exclusive of treasury shares. Gruenberg and Nenita R. 96. being solely owned by the Spouses Gruenberg. Gruenberg owned all or almost all or 99. agency or adjunct of another corporation . represented by Nenita Lee Gruenberg and Reynaldo L. is one whose articles of incorporation provide that: (1) All of the corporation's issued stock of all classes.000. 3571 as a result of Nenita Lee Gruenberg and Motorich's bad faith in refusing to execute a formal Transfer of Rights/Deed of Assignment. But when these officers exceed their authority. the company can treated as a close corporation which can be bound by the acts of its principal stockholder who needs no specific authority ISSUE: W/N Motorich is a close corp.000 attorneys fees San Juan lost the opportunity to construct a residential building in the sum of P100. San Juan argues that Gruenberg needed no authorization from the board to enter into the subject contract. (2) All of the issued stock of all classes shall be subject to one or more specified restrictions on transfer permitted by this . shall be held of record by not more than a specified number of persons. or serve as a mere alter ego or business conduit of a person or an instrumentality.866% to be accurate. within the meaning of this Code. not exceeding twenty (20). confuse legitimate issues.000. treasurer of Motorich. which does not need to be bound by its principal SH HELD: NO. of the subscribed capital stock" of Motorich.
• SBMA wrote UIG. to terminate the lease and immediately take possession of the property if UIG commits a material breach of any of the contract’s conditions. J. as "no one shall enrich himself at the expense of another. Notwithstanding the foregoing. and (3) The corporation shall not list in any stock exchange or make any public offering of any of its stock of any class. by itself. but committed itself to comply with its undertakibngs. . FF Cruz. • UIG imputed the delay to the default of its main contractor. make a close corporation Even if veil is peice it will then be a sale of conjugal property which Nenita alone could not have effected Gruenberg did not represent herself as authorized by Respondent Motorich despite the receipt issued by the former specifically indicating that she was signing on behalf of Motorich The amount paid as "earnest money" was not proven to have redounded to the benefit of Motorich it was deposited with the account of Aren Commercial c/o Motorich Andres Co being a President of San Juan for more than 10 years cannot feign ignorance of the scope of the authority of a corporate treasurer However. The articles of incorporation of Motorich Sales Corporation does not contain any provision stated in Sec. 2000 Panganiban. . . calling its attention to its failure to deliver its various contactual obligations. • The LDA contained pre-termination clauses which authorizes SBMA. Facts • UIG and SBMA entered into a “Lease and Development Agreement” (LDA) wherein SBMA leased to UIG the Binictan Golf Course and appurenant facilities thereto to be transforemed into a world-class 18-hole golf course/resort. . after due notice to UIG. Universal International Group of Taiwan September 14. . 96 mere ownership by a single stockholder or by another corporation of all or capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personalities A narrow distribution of ownership does not. Nenita Gruenberg should be ordered to return to petitioner the amount she received as earnest money. a corporation shall be deemed not a close corporation when at least twothirds (2/3) of its voting stock or voting rights is owned or controlled by another corporation which is not a close corporation within the meaning of this Code.Title. SBMA v.
YES. As a general rule. According to Sec. SBMA declared UIG in default. UIG still failed to satisfy its obligations so SBMA served a letter of pretermination to UIG. or the party entitled to the avails of the suit. 2. a corporation organized in another country has no personality to file suits in the Philippines. Moreover. WON UIG has capacity to sue. TC denied SBMA’s motion to dismiss. the golf course was formally closed and SBMA took possession of the subject premises. In order to subject a foreign corporation doing business in the country to the jurisdiction of our courts. YES. unlicensed foreign non-resident corporations cannot file suits in the Philippines. it must acquire a license from the SEC and appoint an agent for service of process. holding that SBMA is estopped from questioning its standing. 3. the CA made a factual finding that UIGDC and SBGCCI were in possession of the property when SBMA took over. it cannot institute a suit in the Philippines. For this reason. Issues/Held 1. the complaint reveals that it sought to enjoin petitioners from . WON UIGDC and SBGCCI are real parties in interest. • UIG filed a complaint against SBMA for Injuction and Damages with prayer for TRO and preliminary injuction. However. According to petitioners. Without such license. WON RTC has jurisdiction over the suit. YES. It also held that UIGDC and SBGCCI were real parties in interest because they made substantial investments in the venture and had been in possession in property when SBMA took over. In a subsequent order. • TC granted UIG’s prayer and ordered SBMA to restore possession of the golf course to UIG. a domestic firm is estopped from denying the former’s capacity to sue.• The following month. • CA upheld UIG’s capacity to sue. However. The CA is correct in holding that UIGDC and SBGCCI stand to be benefitted or injured by the present suit and should be deemed real parties in interest. the RTC has no jurisdiction over the case because ejectment suits are cognizable by municipal courts. In this case. A corporation has legal status only within the state or territory in which it was organized. 2. after contracting with a foreign corporation. Rule 3 of the Rules of Court defines a real party in interest as the party who stands to be benefited or injured by the judgment of the suit. Shortly thereafter. • Six months later. it also found that they had already made substantial investments in the project.
a mere offer produces no obligation. the letter requested that he give his “comments on all the above. Thus. However. Without a demonstration that any of the evils sought to be prevented by the doctrine is present. it cannot be presumed. without acceptance. NISHINO LEATHER INDUSTRIES. Nishino and his brother Yoshinobu Nishino acquired more than 70% of the authorized capital stock. soonest”. subject to his acceptance. and IKUO NISHINO 551 SCRA 447 (2008) To disregard the separate juridical personality of a corporation. a mere offer produces no obligation. Negotiations subsequently ensued in light of a planned takeover by Nishino who would buy-out the shares of stock of Yamamoto who was advised through a letter that he may take all the equipment/ machinery he had contributed to the company (for his own use and sale) provided that the value of such machines is deducted from the capital contributions which will be paid to him. However. HELD: One of the elements determinative of the applicability of the doctrine of piercing the veil of corporate fiction is that control must have been used by the defendant to commit fraud or wrong. While possession was a necessary consequence of the suit. Yamamoto attempted to recover the machineries but Nishino hindered him to do so. Ryuichi Yamamoto and Ikuo Nishino agreed to enter into a joint venture wherein Nishino would acquire such number of shares of stock equivalent to 70% of the authorized capital stock of the corporation. it was merely incidental. the Court of Appeals reversed the trial court’s decision despite Yamamoto’s contention that the company is merely an instrumentality of the Nishinos. it does not apply.rescinding the contract and taking over the property. However. drawing him to file a Writ of Replevin. which comprised Yamamoto’s investment. Also. on appeal. On the basis of the said letter. the wrongdoing or unjust act in contravention of a plaintiff’s legal rights must be clearly and convincingly established. but a mere offer. the wrongdoing or unjust act in contravention of a plaintiff’s legal rights must be clearly and convincingly established. INC. Nishino claimed that the properties being recovered were owned by the corporation and the above-said letter was a mere proposal which was not yet authorized by the Board of Directors. Because it was a dispute that was incapable of pecuniary estimation. Estoppel may arise from the making of a promise. . RYUICHI YAMAMOTO v. but whether SBMA could rescind the LDA. The main issue is not ejectment. ISSUE: Whether or not Yamamoto can recover the properties he contributed to the company in view of the Doctrine of Piercing the Veil of Corporate Fiction and Doctrine of Promissory Estoppel.” What was thus proffered to Yamamoto was not a promise. remained part of the capital property of the corporation. Thus. soonest. to perpetuate the violation of a statutory or other positive legal duty. Without acceptance. The Trial Court issued the writ. the machineries and equipment. it was within the jurisdiction of the RTC. or dishonest and unjust act in contravention of the plaintiff’s legal rights. To disregard the separate juridical personality of a corporation. it bears noting that the letter was followed by a request for Yamamoto to give his “comments on all the above. However.
who eventually granted the motion. standing alone. Short changed. that an order be issued for the satisfaction of the judgment debt of Kukan. policies. KIC was incorporated in August 2000. Inc. there must be proof that Chan had control or complete dominion of Kukan and KIC’s finances. This time around. the instant petition for review. Inc. KIC moved but was denied reconsideration in another Order dated June 7. In a bid to establish the link between KIC and Kukan. he used such control to commit fraud. Morales moved for and secured a writ of execution against Kukan. conducted bidding for the supply and installation of signages in a building being constructed in Makati City. 2003. Inc. the RTC. and the control was the proximate cause of the financial loss complained of by .. presided by public respondent Judge Amor Reyes. On petition for certiorari before CA. Inc.a. by Order dated March 12. and business practices. Morales filed a Complaint with the RTC against Kukan. REYES G. 2007. 2010 FACTS: Sometime in March 1998. Kukan. This too was denied by the trial court in an Order dated May 24. Jr. Morales filed a Motion for Examination of Judgment Debtors dated May 4. the principle of piercing the veil of corporate fiction. Branch 21. under the premises. 2003 as reiterated in a subsequent order. among them Michael Chan. ISSUE: Whether the trial and appellate courts correctly applied. In it. Morales interposed an Omnibus Motion dated April 30. In reaction to the third party claim. In this motion Morales sought that subpoena be issued against the primary stockholders of Kukan. Morales then sought the inhibition of the presiding judge. The RTC rendered a Decision in favor of Morales and against Kukan. Before the Manila RTC. Morales prayed. 182729 September 29. Mere ownership by a single stockholder or by another corporation of a substantial block of shares of a corporation does not. Morales filed a Motion to Pierce the Veil of Corporate Fiction to declare KIC as having no existence separate from Kukan. Peralta. After the decision became final and executory. for a sum of money.k. The sheriff then levied upon various personal properties of Kukan International Corporation (KIC). No. Inc. KIC then filed an Affidavit of Third-Party Claim. 2007. Inc.R. Inc. Notably. For this ground to hold sway in this case. The case was re-raffled to Branch 21. the court denied the omnibus motion. Hence. with the properties under the name or in the possession of KIC. Romeo Morales tendered the winning bid and was awarded the PhP 5 million contract. had stopped participating in Civil Case. and thus determine the true relationship between the two. 2005. a. applying the principle of piercing the veil of corporate fiction. and (2) the doctrine of piercing the veil of corporate entity can only be raised during a full-blown trial over a cause of action duly commenced involving parties duly brought under the authority of the court by way of service of summons or what passes as such service. or shortly after Kukan. provide sufficient justification for disregarding the separate corporate personality. The CA later denied KIC’s motion for reconsideration in the assailed resolution.. Inc. RULING: Piercing the veil of corporate entity apllies only: (1) the court must first acquire jurisdiction over the corporation or corporations involved before its or their separate personalities are disregarded. Inc. the same was denied. 2005.KUKAN INTERNATIONAL CORPORATION vs. granted the motion. Chan Kai Kit.. By Order of May 29. Eduardo B. it being alleged that both corporations are but one and the same entity.
Inc. In fine. owned and controlled as they are by the same stockholders. And indeed. But such circumstance. Inc. there is no showing that the incorporation. The suggestion that KIC is but a continuation and successor of Kukan. Morales could not. It is true that Michael Chan.Morales. tried to avoid liability or had no property against which to proceed. Evidently. and incidentally the word "Kukan" appearing in the corporate names provide the nexus between Kukan. Inc. Judging from the records. these circumstances are insufficient to establish the identity of KIC as the alter ego or successor of Kukan.k. the records do not show the presence of these elements. of KIC was used to defeat Morales’ right to recover from Kukan. owns 40% of the outstanding capital stock of both corporations. Chan Kai Kit. no serious attempt was made to levy on the properties of Kukan.. The absence of any of the elements prevents the piercing of the corporate veil. and the separate and distinct personality. Inc. As illustrated. As shown by the records. a. the name Michael Chan. the similarity of business activities engaged in. Inc. validly argue that Kukan. . thus. and KIC. Inc. standing alone. the aforementioned case relied upon by Morales cannot justify the application of the principle of piercing the veil of corporate fiction to the instant case. There must be at least a substantial identity of stockholders for both corporations in order to consider this factor to be constitutive of corporate identity.a. stands without factual basis. is insufficient to establish identity.
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