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MAMBULAO LUMBER COMPANY

vs
.

the riff
Provincial u
LETO HERALDO Deputy
She

refused reco FACT PHILIPPINE
land oth in
by TC improvements thereon its obligation but it failed or otherwise refused 1 of
sale of the parc peatcovered
as
S: January 30, 1968
the , and covered demands

various
made erwise

pon the buildin af
oremen NATIONAL BANK and ANAC of tioned el of land,
to have the se

Norte
were

973ed in it ds of
by TCT No plaintiff to pay its obligation but it failed or
The Plaintiff opposed. The foreclosure

assets of the plai of NB initiated steps as well as various sawmill equipment, rolling unit
and other fixed operation. 38, w plaintiff to pay its obligation but it failed or otherwise refused
Camarines Norte, and covered by TCT No
ed
had already stopped Camarines Norte s compound in the aforementioned municipality.

The circumstances of the case also warrant the award of P3.00. to which their attentions were timely called by herein appellant. rolling unit and other fixed assets of the plaintiff. PNB sold ISSUE: Plaintiff applied for an industrial loan of P155. Plaintiff failed to pay the es of the property bought by them. 200. An artificial person like herein appellant corporation cannot experience physical sufferings. or in Manila which is the place agreed upon by the parties in the mortgage contract. it was found that the plaintiff erty was sold to the PNB for the sum of P56. serious anxiety. may also be a ground for the award of moral damages. A Corporation may have a good reputation if besmirched. 000.00. Mambulao therefore appealed. subject to the right of the plaintiff to redeem the same within a period of one year. the latter executed another promissory note. together with the buildings and improvements existing thereon. not only because it is admitted that herein appellant had already ceased in its business operation at the time of the foreclosure sale of the chattels. But for the wrongful acts of herein appellee bank and the deputy sheriff of Camarines Norte in proceeding with the sale in utter disregard of the agreement to have the chattels sold in Manila as provided for in the mortgage contract. To secure the payment of the loan. fright. mental anguish. 908.00.00 only. all situated in its compound in the aforementioned municipality. 500.00. The same cannot be considered under the facts of this case. The application was approved for a loan of P100. but also for the reason that whatever adverse effects of the foreclosure sale of the chattels could have upon its reputation or business standing would undoubtedly be the same whether the sale was conducted at Camarines Norte. . herein appellant should be awarded exemplary damages in the sum of P10. however. 000. and in disposing of the chattels in gross for the miserable amount of P4. the plaintiff mortgaged to defendant PNB a parcel of land. 500. employees of the PNB. for which the plaintiff signed a promissory note wherein it promised to pay to the PNB. as well as various sawmill equipment. 000.00 as part of the approved loan granted to the plaintiff and so on the said date. machinery. wounded feelings. as held and the said prop381 of the land records of said province. plaintiff to payPNB released from to do so. situated in the province Can a corporation be awarded for moral damages? RULING: NO. moral shock or social humiliation which are basis or moral damages. The Security guard of the properties refused to let PNB’s successor in interest to retrieve properties inside the premis the approved loan the sum of P27.00 as attorney's fees for herein appellant.00 with the PNB and the former offered real estate. Upon inspection and verification made by the properties to Mariano Bundok. PNB made another release of P15. logging and transportation equipment as collaterals. RTC sentenced the Mambulao Lumber Company to pay to the defendant PNB. 000.

Hence. ISSUE: Whether or not the corporate entity of PNB and DBP must be pierced. 2013 FACTS: A contract was entered into between Hydro and NIA for the project of the latter. or crime was committed . any application of the doctrine of piercing the corporate veil should be done with caution. A court should be mindful of the milieu where it is to be applied. In order to resolve the issue.R. although unintended. For reasons of public policy and in the interest of justice. It must be certain that the corporate fiction was misused to such an extent that injustice. illegality or inequity committed against third persons. the corporate debt or credit is not the debt or credit of the stockholder. NIA refused to pay contending that Mr Tek has no authority to participate into a joint computation of the foreign currency differential and that Mr Tek has no authority to bind NIA. cutting through the corporate cover requires an approach characterized by due care and caution. by virtue of the separate juridical personality of a corporation.PHILIPPINE NATIONAL BANK vs. a corporation incurs its own liabilities and is legally responsible for payment of its obligations. The computation showed that NIA owed Hydro for the differential. attributes. there was depreciation in value of Peso resulting to price differential. the corporate veil will justifiably be impaled only when it becomes a shield for fraud. Otherwise an injustice. No. The contract price is to be payable partly in Philippine peso and US dollars. fraud.40 In other words. and properties expressly authorized by law or incident to its existence. It possesses the right of succession and such powers. As a consequence of its status as a distinct legal entity and as a result of a conscious policy decision to promote capital formation. and Hydro made a joint computation of the amount corresponding to the foreign currency differential. RULING: NO. the administrator of NIA. Thus. When a demand was made by Hydro against NIA. It has a personality separate and distinct from that of its stockholders and from that of other corporations to which it may be connected. This protection from liability for shareholders is the principle of limited liability. HYDRO RESOURCES CONTRACTORS CORPORATION G. may result from its erroneous application. Mr Tek. 167530. However. A corporation is an artificial entity created by operation of law. March 13. Once the project was being executed. Equally well-settled is the principle that the corporate mask may be removed or the corporate veil pierced when the corporation is just an alter ego of a person or of another corporation. the rule is that a court should be careful in assessing the milieu where the doctrine of the corporate veil may be applied.

It notified the DOLE of the closure of its business operations. et. ISSUE: Is Mar Fishing and Miramar solidarily liable to the employees? RULING: NO. ROMEL DANAG. Mar Fishing. the alleged take-over by Miramar of Mar Fishing’s operations and the evident similarity of their businesses. Neither can the veil of corporate fiction between the two companies be pierced by the rest of petitioners’ submissions. FAUJIA SALIH. sold its principal assets to co-respondent Miramar through public bidding.041. the back wages and retirement pay earned from the former employer cannot be filed against the new owners or operators of an enterprise.. engaged in the business of fishing and canning of tuna. ALBERTO B. No. petitioners. MIRAMAR FISHING CO. The wrongdoing must be clearly and convincingly established. Also. Inc. so they filed Complaints for illegal dismissal with money claims before the Arbitration Branch of the NLRC. Then. it cannot be presumed. without loss of seniority rights and privileges previously enjoyed. who worked as rank and file employees. MAR FISHING CO. INC. In view of that transfer. 2012 FACTS: Mar Fishing Co.. in disregard of its rights. INC. to absorb Mar Fishing’s regular rank and file employees whose performance was satisfactory.560.al. based on the marked differences in their stock ownership. Mar Fishing Workers Union – NFL – and Miramar entered into a Memorandum of Agreement for the acquiring company. (Mar Fishing). is required to compensate petitioners. Since piercing the veil of corporate fiction is frowned upon. DIGNO. namely. Miramar and Mar Fishing are separate and distinct entities. Mar Fishing’s labor union. Unfortunately. VIVIAN T. ANTONIO FABIAN. JUMADIYA A..00. 168208. KADIL. to cover Mar Fishing’s outstanding obligation in the amount of ₱ 897.against another. the fact that Mar Fishing’s officers remained as such in Miramar does not by itself warrant a conclusion that the two companies are one and the same. CASQUITE. those who seek to pierce the veil must clearly establish that the separate . DANILO M. vs.R. were not hired or given separation pay by Miramar. ROBERT BUEHS AND JEROME SPITZ G.. and not Miramar. June 13. Mar Fishing issued a Memorandum informing all its workers that the company would cease to operate by the end of the month. RAMIREZ. Miramar. The mere showing that the corporations had a common director sitting in all the boards without more does not authorize disregarding their separate juridical personalities. Indeed. Proceeds of the sale were paid to the Trade and Investment Corp..

AGUIRRE G. is a domestic corporation. INC.* CRISPINA VANQUARDIA.* AMELIA MORENO. (Well World for brevity). buying . JENN L. THERESA R. WELL WORLD TOYS. and treated April and Well World as two distinct corporations. unfortunately. thus both corporations should be treated as one corporation liable for their claims. NARCISA VENZON. Inc. EDELIZA ASAS.* JOSEPHINE DERONG. October 4. ISSUE: Whether or not April and Well World two distinct corporations.R. protect a fraud. . petitioners who initially composed of seventy- seven employees below filed a complaint for "illegal shutdown/retrenchment/dismissal and unfair labor practice. DOLORES OLAES.” In view of April's cessation of operations. or perpetrate a deception. 1990. Petitioners further alleged that the original incorporators and principal officers of April were likewise the original incorporators of Well World. RENE LAOLAO. Inc. REYNALDO GARCIA. 1990. a corporation also engaged in the manufacture of stuffed toys for export. or after almost a year of operation. importing.and distinct personalities of the corporations are set up to justify a wrong.* ABNER PETILOS." stuffed toys. MELINDA LLADOC. EVELYN UNTALAN. NARCISO HILAPO. for the purpose of "manufacturing. MA. at wholesale and retail. petitioners amended their complaint to implead private respondent Well World Toys. and APRIL TOY. No. ERNA AZARCON.* GEMMA TIBALAO BANTOLO. This. LILIA MARAY. RULING: YES. sub-contracting or otherwise dealing in. YU SHENG LING. APRIL TOYS. April posted a memorandum 2 within its premises and circulated a copy of the same among its employees informing them of its dire financial condition. WANG.* ROSARIO CHICO. 108936. MERLITA DE LOS SANTOS. LUCY ALMONTE.. The Labor Arbiter found as valid the closure of April. 1989. SOL LAGUIO. AGUIRRE. April decided to shorten its corporate term "up to February 28. WORKERS UNION – ALAB vs. CADIENTE and GLICERIA R. On December 20. CHI SHENG LIN. EUCLIFF CHENG. ANNALIZA ENSANDO.. NORMA ELEGANTE. petitioners have failed to do. selling. INC. NENITA C. INC." On June 21. exporting. NATIONAL LABOR RELATIONS COMMISSION. 1996 FACTS: Private respondent April Toy.

. or circumvent the law said corporations were rightly treated as distinct and separate from each other. It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. The two corporations have two different set of officers managing their respective affairs in two separate offices. Mere substantial identity of the incorporators of the two corporations does not necessarily imply fraud. In the absence of clear and convincing evidence that April and Well World's corporate personalities were used to perpetuate fraud. 15 nor warrant the piercing of the veil of corporate fiction.

key officers and rank-and-file workers and employees of co-defendants NMIC. there may be circumstances under which their interest as officers in one company may disqualify them in equity from representing both corporations in transactions between the two. between July 16. Where the corporations have directors and officers in common. . Maricalum and Island Cement creations of co-defendants PNB and DBP were the personnel of co-defendant MMIC such that practically there has only been a change of name for all legal purpose and intents. The purchases remained unpaid as of August 1. 1983. from acting as directors of the debtor corporation in the authorization of a mortgage or deed of trust to the former to secure such indebtedness In the same manner that when the corporation is insolvent. 16 August 2001 FACTS: Between July 1981 and April 1984. RULING: NO.DEVELOPMENT BANK OF THE PHILIPPINES vs. by reason of self- interest. In the meantime. Maricalum Mining Corporation and Island Cement Corporation as co-defendants. causing the foreclosure of the said mortgages. it has been held that the directors of the creditor corporation were disqualified. REMINGTON INDUSTRIAL SALES GR 126200. Marinduque Mining purchased and caused to be delivered construction materials and other merchandise from Remington Industrial Sales Corporation. They cannot thus take advantage of their fiduciary relation and deal directly with themselves. PNB and DBP thereafter gained control of the said properties. where one corporation was ‘insolvent and indebted to another. DBP. Nonoc Mining. Maricalum Mining and Island Cement must be treated in law as one and the same entity by disregarding the veil of corporate fiction since the personnel. Negros Occidental. as well as its equipments located therein. Remington asserted that Marinduque Mining. Thus. its directors who are its creditors cannot secure to themselves any advantage or preference over other creditors. 1984 when Remington filed a complaint for a sum of money and damages against Marinduque Mining for the value of the unpaid construction materials and other merchandise purchased by Marinduque Mining. Remington’s original complaint was amended to include PNB. as well as interest. and Rizal. COURT OF APPEALS. Marinduque Mining entered into 3 mortgage agreements with PNB and DBP involving its real properties located in Surigao del Norte. to the injury of others in equal right. attorney’s fees and the costs of suit. Marinduque failed to pay its loans. DBP. PNB. ISSUE: Is the take-over of PNB and DBP over Marinduque Mining in bad faith. 1982 to October 4. Their actions are mandated under the law.

can not secure to themselves any preference or advantage over other creditors in the payment of their claims. . Directors of insolvent corporation. who are creditors of the company. they should have been classed as instruments rendered void by the legal principle which prevents directors of an insolvent corporation from giving themselves a preference over outside creditors. The governing body of officers thereof are charged with the duty of conducting its affairs strictly in the interest of its existing creditors. It is not good morals or good law. When validity of these mortgages. was questioned by other creditors of the corporation. and it would be a breach of such trust for them to undertake to give any one of its members any advantage over any other creditors in securing the payment of his debts in preference to all others. to secure debts upon which the directors were indorsers.