Luxuria Homes was assigned a property by Aida Posadas. The court found that respondents failed to prove that Luxuria Homes acted in bad faith or was involved in any transactions regarding the property dispute. Therefore, only Aida Posadas who contracted for services was found liable, not Luxuria Homes.
The NLRC ordered Qualitrans Limousine Service to reinstate employees and pay back wages. However, the court improperly disregarded the separate legal status of the corporation and president as distinct entities.
Under the doctrine of piercing the corporate veil, the legal fiction of a corporation's separate identity from its owners can be disregarded if the corporation is being misused to justify wrongs.
Luxuria Homes was assigned a property by Aida Posadas. The court found that respondents failed to prove that Luxuria Homes acted in bad faith or was involved in any transactions regarding the property dispute. Therefore, only Aida Posadas who contracted for services was found liable, not Luxuria Homes.
The NLRC ordered Qualitrans Limousine Service to reinstate employees and pay back wages. However, the court improperly disregarded the separate legal status of the corporation and president as distinct entities.
Under the doctrine of piercing the corporate veil, the legal fiction of a corporation's separate identity from its owners can be disregarded if the corporation is being misused to justify wrongs.
Luxuria Homes was assigned a property by Aida Posadas. The court found that respondents failed to prove that Luxuria Homes acted in bad faith or was involved in any transactions regarding the property dispute. Therefore, only Aida Posadas who contracted for services was found liable, not Luxuria Homes.
The NLRC ordered Qualitrans Limousine Service to reinstate employees and pay back wages. However, the court improperly disregarded the separate legal status of the corporation and president as distinct entities.
Under the doctrine of piercing the corporate veil, the legal fiction of a corporation's separate identity from its owners can be disregarded if the corporation is being misused to justify wrongs.
Aida Posadas assigned the property to Luxuria Homes. To disregard the separate juridical personality of a corporation, the wrongdoing must be clearly and convincingly established. It cannot be presumed. This is elementary. Thus in Bayer-Roxas v. Court of Appeals, we said that the separate personality of the corporation may be disregarded only when the corporation is used as a cloak or cover for fraud or illegality, or to work injustice, or where necessary for the protection of the creditors. Accordingly in Del Rosario v. NLRC, where the Philsa International Placement and Services Corp. was organized and registered with the POEA in 1981, several years before the complainant was filed a case in 1985, we held that this cannot imply fraud. Obviously in the instant case, private respondents failed to show proof that petitioner Posadas acted in bad faith. Consequently since private respondents failed to show that petitioner Luxuria Homes, Inc., was a party to any of the supposed transactions, not even to the agreement to negotiate with and relocate the squatters, it cannot be held liable, nay jointly and in solidum, to pay private respondents. In this case since it was petitioner Aida M. Posadas who contracted respondent Bravo to render the subject services, only she is liable to pay the amounts adjudged herein. 2. Cruz v. Dalisay / 152 SCRA 482 Sheriff The tenor of the NLRC judgment and the implementing writ is clear enough. It directed Qualitrans Limousine Service, Inc. to reinstate the discharged employees and pay them full backwages. Respondent, however, chose to "pierce the veil of corporate entity" usurping a power belonging to the court and assumed improvidently that since the complainant is the owner/president of Qualitrans Limousine Service, Inc., they are one and the same. It is a well-settled doctrine both in law and in equity that as al entity, a corporation has a personality distinct and separate from its individual stockholders or members. The mere fact that one is president of a corporation does not render the property he owns or possesses the property of the corporation, since the president, as individual, and the corporation are separate entities.
3. Umali v. CA / 189 SCRA 529
Under the doctrine of piercing the veil of corporate entity, when valid grounds therefore exist, 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, or 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. The mere fact, therefore, that the businesses of two or more corporations are interrelated is not a justification for disregarding their separate personalities.