PCGG VS SANDIGANBAYAN
RULING: The suit against certain shareholders cannot ipso facto be a
suit against the unimpleaded corporation itself without violating the
fundamental principle that a corporation has a legal personality distinct
and separate from its stockholders.—There is no existing sequestration
to talk about in this case, as the writ issued against Aerocom, to repeat,
is invalid for reasons hereinbefore stated. Ergo, the suit in Civil Case
No. 0009 against Mr. Nieto and Mr. Africa as shareholders in Aerocom
is not and cannot ipso facto be a suit against the unimpleaded Aerocom
itself without violating the fundamental principle that a corporation has
a legal personality distinct and separate from its stockholders. Such is
the ruling laid down in PCGG v. Interco reiterated anew in a case of
more recent vintage—Republic v. Sandiganbayan, Sipalay Trading
Corp. and Allied Banking Corp. where this Court, speaking through Mr.
Justice Ricardo J. Francisco, hewed to the lone dissent of Mr. Justice
Teodoro R. Padilla in the very same Republic v. Sandiganbayan case
herein invoked by the PCGG, to wit: “x x x failure to implead these
corporations as defendants and merely annexing a list of such
corporations to the complaints is a violation of their right to due process
for it would in effect be disregarding their distinct and separate
personality without a hearing.
G.R. No. 75885, May 27, 1987
Bataan Shipyard & Engineering Co vs. PCGG
Ponente: Narvasa
Facts: Bataan Shipyard and Engineering Co., Inc (BASECO) – private corporation
Presidential Commission on Good Government (PCGG) – issued the sequestration
order.
The corporation known as BASECO was owned or controlled by President Marcos
during his administration, through nominees, by taking undue advantage of his public
office and/or using his powers, authority, or influence, and that it was by and through
the same means, that BASECO had taken over the business and/or assets of the
National Shipyard and Engineering Co., Inc., and other government-owned or
controlled entities.
As evidence found in Malacanang shortly after the sudden flight of President Marcos
were certificates corresponding to more than ninety-five percent (95%) of all the
outstanding shares of stock of BASECO, endorsed in blank, together with deeds of
assignment of practically all the outstanding shares of stock of the three (3)
corporations above mentioned (which hold 95.82% of all BASECO stock), signed by
the owners thereof although not notarized. While the petitioner's counsel was quick to
dispute this asserted fact, assuring the Court that the BASECO stockholders were still
in possession of their respective stock certificates and had never endorsed them in
blank or to anyone else, that denial is exposed by his own prior and subsequent
recorded statements as a mere gesture of defiance rather than a verifiable factual
declaration.
In accordance with Executive Orders Numbered 1 and 2 promulgated by President
Corazon Aquino, PCGG through its commissioners and agent ordered sequestration,
takeover and other provisional orders affecting BASECO.
Commissioner Diaz invoked the provisions of Section 3 (c) of Executive Order No. 1,
empowering the Commission —To provisionally takeover in the public interest or to
prevent its disposal or dissipation, business enterprises and properties taken over by
the government of the Marcos Administration or by entities or persons close to former
President Marcos, until the transactions leading to such acquisition by the latter can be
disposed of by the appropriate authorities.
HEIRS OF RAMON DURANO VS UY
FACTS: The antecedents of this case may be traced as far backas August 1970; it
involves a 128-hectare parcel of landlocated in the barrios of Dunga and
Cahumayhumayan,Danao City. Respondents stated that sometime in theearly part of
August 1970 and months thereafter theyreceived mimeographed notices dated August
2, 1970and signed by the late Ramon Durano, Sr., informingthem that the lands which
they are tilling and residing in,formerly owned by the Cebu Portland Cement
Company(hereafter, "Cepoc"), had been purchased by Durano &Co., Inc. The notices
also declared that the lands wereneeded by Durano & Co. for planting to sugar and
forroads or residences, and directed respondents toimmediately turn over the said
lands to therepresentatives of the company. Simultaneously, tallbamboo poles with
pennants at the tops thereof wereplanted in some areas of the lands and metal
sheetsbearing the initials "RMD" were nailed to
posts. As early as the first week of August 1970, and evenbefore many of the
respondents received notices tovacate, men who identified themselves as employees
of Durano & Co. proceeded to bulldoze the lands occupiedby various respondents,
destroying in their wake theplantings and improvements made by the
respondentstherein. On some occasions, respondents alleged, thesemen fired shots in
the air, purportedly acting upon theinstructions of petitioner Ramon Durano III
and/orRamon Durano, Jr. On at least one instance, petitionersRamon Durano III and
Elizabeth Hotchkiss Durano wereseen on the site of the bulldozing operations.On
September 15, 1970, Durano & Co. sold the disputedproperty to petitioner Ramon
Durano III, who procuredthe registration of these lands in his name under TCTNo. T-
103 and TCT No. T-104
Issue: Whether or not petitioner Duranos are liable intheir personal capacity from the
acts of Durano and CO.Inc
Held: Doctrine of Piercing the Veil of Corporate Fiction;
Test.—The test in determining the applicability of the doctrine of piercing the veil of
corporate fiction is as follows:
1. Control, not mere majority or complete stock control, but complete domination, not
only of finances but of policy and business practice in respect to the transaction
attacked so that the corporate entity as to this transaction had at the time no separate
mind, will or existence of its own;
2. Such control must have been used by the defendant to commit fraud or wrong, to
perpetuate the violation of a statutory or other positive legal duty, or dishonest and
unjust acts in contravention of plaintiff’s legal rights; and 3. The aforesaid control and
breach of duty must proximately cause the injury or unjust loss complained of. The
absence of any one of these elements prevents “piercing the corporate veil.” In applying
the “instrumentality” or “alter ego” doctrine, the courts are concerned with reality and
not form, with how the corporation operated and the individual defendant’s relationship
to that operation.
The question of whether a corporation is a mere alter ego is purely one of fact. The
Court sees no reason to reverse the finding of the Court of Appeals. The facts show
that shortly after the purported sale by Cepco to Durano & Co., the latter sold the
property to petitioner Ramon Durano III, who immediately procured the registration of
the property in his name. Obviously, Durano & Co. was used by petitioners merely as
an instrumentality to appropriate the disputed property for themselves.
G.R. No. 129459 September 29, 1998 San Juan Structural vs CA
Lessons Applicable: Definition of a Close Corporation (Corporate Law)
FACTS: 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 April 6, 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, represented by Nenita Lee Gruenberg and Reynaldo L. Gruenberg, under
Transfer Certificate of Title No. 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, San Juan suffered moral and nominal damages of P500,000 and
exemplary damages of P100,000.00 and P100,000 attorneys fees. San Juan lost the
opportunity to construct a residential building in the sum of P100,000.00 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. Since "Spouses Reynaldo
L. Gruenberg and Nenita R. Gruenberg owned all or almost all or 99.866% to be
accurate, of the subscribed capital stock" of Motorich, San Juan argues that Gruenberg
needed no authorization from the board to enter into the subject contract. being solely
owned by the Spouses Gruenberg, 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. which does not need to be bound by its principal
SH
HELD: NO. petition is hereby DENIED
Gruenberg, treasurer of Motorich, and Andres Co signed the contract but that cannot
bind Motorich, 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, not
a corporate receipt, and it bears only Nenita Gruenberg's signature. GR: acts of
corporate officers within the scope of their authority are binding on the corporation. But
when these officers exceed their authority, their actions "cannot bind the corporation,
unless it has ratified such acts or is estopped from disclaiming them. Statutorily granted
privilege of a corporate veil may be used only for legitimate purposes utilized as a shield
to commit fraud, illegality or inequity; defeat public convenience; confuse legitimate
issues; or serve as a mere alter ego or business conduit of a person or an
instrumentality, agency or adjunct of another corporation - none here
Sec. 96. Definition and Applicability of Title. — A close corporation, within the meaning
of this Code, is one whose articles of incorporation provide that: (1) All of the
corporation's issued stock of all classes, exclusive of treasury shares, shall be held of
record by not more than a specified number of persons, not exceeding twenty (20); (2)
All of the issued stock of all classes shall be subject to one or more specified restrictions
on transfer permitted by this Title; and (3) The corporation shall not list in any stock
exchange or make any public offering of any of its stock of any class. Notwithstanding
the foregoing, a corporation shall be deemed not a close corporation when at least two-
thirds (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. . . . .
The articles of incorporation of Motorich Sales Corporation does not contain any
provision stated in Sec. 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, by itself, 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, Nenita Gruenberg should be
ordered to return to petitioner the amount she received as earnest money, as "no one
shall enrich himself at the expense of another.
Umali vs Court of Appeals
189 SCRA 529 [GR No. 89561 September 13, 1990]
Facts: Plaintiff Santiago Rivera is the nephew of plaintiff Mauricia Mur Vda. de Castillo.
The Castillo family are the owners of parcel of land located in Lucena City which was
given as security for a loan from the development Bank of the Philippines (DBP) for
their failure to pay the amortization, foreclosure of the said property was about to be
initiated. This problem was made known to Santiago Rivera, who proposed to them the
conversion into subdivision of the four parcels of land adjacent to the mortgaged
property to raise the necessary fund. The idea was accepted by the Castillo family and
to carry out the project, a memorandum of agreement was executed by and between
Slobec Realty and Development Inc. represented by its president Santiago Rivera and
Castillo family. In this agreement, Santiago Rivera obliged himself to pay the Castillo
family the sum of P70,000 immediately after the execution of the agreement and to pay
additional amount of P40,000 after the property has been converted into a subdivision.
Rivera, with agreement approached Mr. Modesto Cervantes, president of defendant
Bormaheco and proposed to purchase from Bormaheco two tractors model D7 and D8
subsequently a sales agreement was executed on December 28, 1970. On January 3,
1971, Slobec, through Rivera, executed in favor of Bormaheco a chattel mortgage over
the said equipment as security for the payment of the aforesaid balance of P180,000.
As further security of the aforementioned unpaid balance, Slobec obtained from
insurance corporation of the Philippines a security bond, with Insurance Corporation of
the Philippines (ICP) as surety and Slobec as principal, in favor of Bormaheco, as borne
out of by Exhibit 8. The aforesaid surety bond was in turn secured by an agreement of
counter-guaranty with real estate mortgage executed by Rivera as President of Slobec
and Mauricia Mur Vda. de Castillo, Buenaflor Castillo Umali, Bertilla Castillo-Rada,
Victoria Castillo, Marietta Castillo and Leovina Castillo Jalbuena as mortgagors and
insurance corporation of the Philippines as mortgagee. In this agreement, ICP
guaranteed the obligation of Slobec with Bormaheco in the amount of P180,000. In
giving the bond, ICP required that the Castillos mortgage to them the properties in
question, namely, four parcels of land covered by TCT in the name of the
aforementioned mortgagors, namely TCT no. 13114, 13115, 13116, and 13117 all of
the Register of Deeds of Lucena City. Meanwhile, for violation of the terms and
conditions of the counter-guaranty agreement, the properties of the Castillos were
foreclosed by ICP as the highest bidder with a bid of P285,212, a certificate of sale was
issued by the provincial sheriff of Lucena City and TCT over the subject parcels of land
were issued.
Issue: Whether or not the foreclosure is proper so as to apply the doctrine of piercing
the veil of corporate entity.
Held: No. Under the doctrine of piercing the veil of corporate entity, when valid grounds
therefore exists, the legal fiction that a corporation is an entity with a juridical personality
separate and distinct from its members or stockholders may be disregarded. In such
cases, the corporation will be considered as a mere association of persons. The
members or stockholders of the corporation will be considered as the corporation, that
is, liability will attach directly to the officers and stockholders. The doctrine applies when
the corporate fiction is used to defeat public convenience, justify wrong, protect fraud,
or defend crime, on when it is made as a shield to confuse the legitimate issues or
where a corporation is the mere alter ego or business conduit of a person, or where the
corporation is so organized and controlled and its affairs are so conducted as to make
it merely an instrumentality, agency, conduit or adjunct of another corporation.
In the case at bar, petitioners seek to pierce the veil of corporate entity of Bormaheco,
ICP and PM parts, alleging that these corporations employed fraud in causing the
foreclosure and subsequent sale of the real properties belonging to petitioners while
we do not discount the possibility of existence of fraud in the foreclosure proceeding,
neither are we inclined to apply the doctrine invoked by petitioners in granting the relief
sought. It is our considered opinion that piercing the veil of corporate entity is not the
proper remedy in order that the foreclosure proceeding may be declared a nullity under
the circumstances obtaining in the legal case at bar.
The mere fact, therefore, that the business of two or more corporations are interrelated
is not a justification for disregarding their separate personalities, absent sufficient
showing that the corporate entity was purposely used as a shield to defraud creditors
and third persons of their rights.
G.R. No. 141994. January 17, 2005
FILIPINAS BROADCASTING NETWORK, INC., petitioner, vs. AGO MEDICAL AND
EDUCATIONAL CENTER-BICOL CHRISTIAN COLLEGE OF MEDICINE, (AMEC-
BCCM) and ANGELITA F. AGO, respondents.
Facts: Expos is a radio documentary program hosted by Carmelo Mel Rima (Rima)
and Hermogenes Jun Alegre (Alegre). Expos is aired every morning over DZRC-AM
which is owned by Filipinas Broadcasting Network, Inc. (FBNI). Expos is heard over
Legazpi City, the Albay municipalities and other Bicol areas.
In the morning of 14 and 15 December 1989, Rima and Alegre exposed various alleged
complaints from students, teachers and parents against Ago Medical and Educational
Center-Bicol Christian College of Medicine (AMEC) and its administrators. Claiming
that the broadcasts were defamatory, AMEC and Angelita Ago (Ago), as Dean of
AMECs College of Medicine, filed a complaint for damages against FBNI, Rima and
Alegre on 27 February 1990.
The complaint further alleged that AMEC is a reputable learning institution. With the
supposed expose, FBNI, Rima and Alegre transmitted malicious imputations, and as
such, destroyed plaintiffs (AMEC and Ago) reputation. AMEC and Ago included FBNI
as defendant for allegedly failing to exercise due diligence in the selection and
supervision of its employees, particularly Rima and Alegre.
On 14 December 1992, the trial court rendered a Decision] finding FBNI and Alegre
liable for libel except Rima. In holding FBNI liable for libel, the trial court found that FBNI
failed to exercise diligence in the selection and supervision of its employees.
The Court of Appeals affirmed the trial courts judgment with modification. The appellate
court made Rima solidarily liable with FBNI and Alegre.
Issues:
Whether or not the broadcasts are libelous.
Whether or not AMEC is entitled to moral damages.
Whether or not the award of attorneys fees is proper.
Ruling:
A libel is a public and malicious imputation of a crime, or of a vice or defect, real or
imaginary, or any act or omission, condition, status, or circumstance tending to cause
the dishonor, discredit, or contempt of a natural or juridical person, or to blacken the
memory of one who is dead.
Every defamatory imputation is presumed malicious. Rima and Alegre failed to show
adequately their good intention and justifiable motive in airing the supposed gripes of
the students. As hosts of a documentary or public affairs program, Rima and Alegre
should have presented the public issues free from inaccurate and misleading
information. Hearing the students alleged complaints a month before the expos, they
had sufficient time to verify their sources and information. However, Rima and Alegre
hardly made a thorough investigation of the students alleged gripes. Neither did they
inquire about nor confirm the purported irregularities in AMEC from the Department of
Education, Culture and Sports. Alegre testified that he merely went to AMEC to verify
his report from an alleged AMEC official who refused to disclose any information.
Alegre simply relied on the words of the students because they were many and not
because there is proof that what they are saying is true. This plainly shows Rima and
Alegres reckless disregard of whether their report was true or not.
Had the comments been an expression of opinion based on established facts, it is
immaterial that the opinion happens to be mistaken, as long as it might reasonably be
inferred from the facts. However, the comments of Rima and Alegre were not backed
up by facts. Therefore, the broadcasts are not privileged and remain libelous per se.
The broadcasts also violate the Radio Code of the Kapisanan ng mga Brodkaster sa
Pilipinas, Ink. (Radio Code). Item I(B) of the Radio Code provides:
B. PUBLIC AFFAIRS, PUBLIC ISSUES AND COMMENTARIES
1. x x x
4. Public affairs program shall present public issues free from personal bias, prejudice
and inaccurate and misleading information. x x x Furthermore, the station shall strive
to present balanced discussion of issues. x x x.
xxx
7. The station shall be responsible at all times in the supervision of public affairs, public
issues and commentary programs so that they conform to the provisions and standards
of this code.
8. It shall be the responsibility of the newscaster, commentator, host and announcer to
protect public interest, general welfare and good order in the presentation of public
affairs and public issues.
The broadcasts fail to meet the standards prescribed in the Radio Code, which lays
down the code of ethical conduct governing practitioners in the radio broadcast
industry. The Radio Code is a voluntary code of conduct imposed by the radio
broadcast industry on its own members. The Radio Code is a public warranty by the
radio broadcast industry that radio broadcast practitioners are subject to a code by
which their conduct are measured for lapses, liability and sanctions.
The public has a right to expect and demand that radio broadcast practitioners live up
to the code of conduct of their profession, just like other professionals. A professional
code of conduct provides the standards for determining whether a person has acted
justly, honestly and with good faith in the exercise of his rights and performance of his
duties as required by Article 19 of the Civil Code. A professional code of conduct also
provides the standards for determining whether a person who willfully causes loss or
injury to another has acted in a manner contrary to morals or good customs under
Article 21 of the Civil Code.
FBNI contends that AMEC is not entitled to moral damages because it is a corporation.
A juridical person is generally not entitled to moral damages because, unlike a natural
person, it cannot experience physical suffering or such sentiments as wounded
feelings, serious anxiety, mental anguish or moral shock. The Court of Appeals
cites Mambulao Lumber Co. v. PNB, et al. to justify the award of moral damages.
However, the Courts statement in Mambulao that a corporation may have a good
reputation which, if besmirched, may also be a ground for the award of moral damages
is an obiter dictum.
Nevertheless, AMECs claim for moral damages falls under item 7 of Article 2219 of the
Civil Code. This provision expressly authorizes the recovery of moral damages in cases
of libel, slander or any other form of defamation. Article 2219(7) does not qualify
whether the plaintiff is a natural or juridical person. Therefore, a juridical person such
as a corporation can validly complain for libel or any other form of defamation and claim
for moral damages.
Moreover, where the broadcast is libelous per se, the law implies damages. In such a
case, evidence of an honest mistake or the want of character or reputation of the party
libeled goes only in mitigation of damages. Neither in such a case is the plaintiff
required to introduce evidence of actual damages as a condition precedent to the
recovery of some damages. In this case, the broadcasts are libelousper se. Thus,
AMEC is entitled to moral damages.
However, we find the award of P300,000 moral damages unreasonable. The record
shows that even though the broadcasts were libelous per se, AMEC has not suffered
any substantial or material damage to its reputation. Therefore, we reduce the award
of moral damages from P300,000 to P150,000.
The award of attorney’s fees is not proper.
AMEC failed to justify satisfactorily its claim for attorney’s fees. AMEC did not adduce
evidence to warrant the award of attorney’s fees. Moreover, both the trial and appellate
courts failed to explicitly state in their respective decisions the rationale for the award
of attorney’s fees.
In Inter-Asia Investment Industries, Inc. v. Court of Appeals, we held that:
[I]t is an accepted doctrine that the award thereof as an item of damages is the
exception rather than the rule, and counsels fees are not to be awarded every time a
party wins a suit. The power of the court to award attorneys fees under Article 2208 of
the Civil Code demands factual, legal and equitable justification, without which the
award is a conclusion without a premise, its basis being improperly left to speculation
and conjecture. In all events, the court must explicitly state in the text of the decision,
and not only in the decretal portion thereof, the legal reason for the award of attorney’s
fees. (Emphasis supplied)
Petition denied.
REN TRANSPORT VS NLRC
SERENO, C.J.:
Before this Court are consolidated Rule 45 petitions challenging the
Decision[1] and the Resolution[2] issued by the Court of Appeals (CA) in CA-
G.R. SP No. 100722.
THE FACTS
Samahan ng Manggagawa sa Ren Transport (SMART) is a registered union, which
had a five-year collective bargaining agreement (CBA) with Ren Transport Corp. (Ren
Transport) set to expire on 31 December 2004.[3] The 60-day freedom period of the
CBA passed without a challenge to SMART'S majority status as bargaining
agent.[4] SMART thereafter conveyed its willingness to bargain with Ren Transport,
to which it sent bargaining proposals. Ren Transport, however, failed to reply to the
demand.[5]
Subsequently, two members of SMART wrote to the Department of Labor and
Employment - National Capital Region (DOLE-NCR). The office was informed that a
majority of the members of SMART had decided to disaffiliate from their mother
federation to form another union, Ren Transport Employees Association Being a mere artificial being, it is incapable of experiencing physical suffering or
(RTEA).[6] SMART contested the alleged disaffiliation through a letter dated 4 April sentiments like wounded feelings, serious anxiety, mental anguish or moral
2005.[7] shock.[35]

During the pendency of the disaffiliation dispute at the DOLE-NCR, Ren Transport
stopped the remittance to SMART of the union dues that had been checked off from
the salaries of union workers as provided under the CBA.[8] Further, on 19 April
2005, Ren Transport voluntarily recognized RTEA as the sole and exclusive
bargaining agent of the rank-and-file employees of their company.[9]
On 6 July 2005, SMART filed with the labor arbiter a complaint for unfair labor
practice against Ren Transport.[10]
Although this Court has allowed the grant of moral damages to corporations in certain
situations,[36] it must be remembered that the grant is not automatic. The claimant
must still prove the factual basis of the damage and the causal relation to the
defendant's acts.[37] In this case, while there is a showing of bad faith on the part of
the employer in the commission of acts of unfair labor practice, there is no evidence
establishing the factual basis of the damage on the part of SMART.

THE LABOR ARBITER'S RULING

The labor arbiter rendered a decision[11] finding Ren Transport guilty of acts of unfair
labor practice. The former explained that since the disaffiliation issue remained
pending, SMART continued to be the certified collective bargaining agent; hence, Ren
Transport's refusal to send a counter-proposal to SMART was not justified. The labor
arbiter also held that the company's failure to remit the union dues to SMART and the
voluntary recognition of RTEA were clear indications of interference with the
employees' exercise of the right to self-organize.

Both parties elevated the case to the National Labor Relations Commission (NLRC).
SMART contested only the failure of the labor arbiter to award damages.

Ren Transport challenged the entire Decision, and all the assigned errors were based
on the assertion that SMART had lost its majority status.

The appeals were consolidated.

THE NLRC RULING

The NLRC issued a decision[13] affirming the labor arbiter's finding of unfair labor
practice on the part of Ren Transport. Union dues were ordered remitted to SMART.

On 30 January 2009, the CA rendered a decision[17] partially granting the petition. It

deleted the award of moral damages to SMART, but affirmed the NLRC decision on
all other matters. The CA ruled that SMART, as a corporation, was not entitled to
moral damages.[18]

ISSUE: whether SMART is entitled to moral damages

SMART is not entitled to an award of moral damages.

We now address the petition of SMART, which faults the CA for deleting the grant of
moral damages.[34]

We hold that the CA correctly dropped the NLRC's award of moral damages to
SMART. Indeed, a corporation is not, as a general rule, entitled to moral damages.