LLAMADO VS.

CA
G.R. No. 99032 Ponente Date
TORRES, JR., J.: March 26, 1997
Petitioners Respondents
RICARDO A. LLAMADO COURT OF APPEALS and PEOPLE OF THE
PHILIPPINES

DOCTRINE:

I. FACTS:

II. Issue/s

Whether the NLRC committed grave abuse of discretion when it affirmed the writ of
execution issued against the properties of Del Rosario

III. Ruling

The Supreme Court found that the NLRC decision is wanting. Its conclusion that
Philsa allowed its license to expire so as to evade payment of private respondent's
claim is not supported by the facts. Philsa's corporate personality therefore remains
inviolable.

Under the Under the law a corporation is bestowed juridical personality, separate and
distinct from its stockholders [But when the juridical personality of the corporation is
used to defeat public convenience, justify wrong, protect fraud or defend crime, the
corporation shall be considered as a mere association of persons, thus either the
corporation or its successor-in-interest shall be considered as one and the liability
shall attach.

The Court, however, emphasized that for the separate juridical personality of a
corporation to be disregarded, the wrongdoing must be clearly and convincingly
established. In this case, at the time Philsa allowed its license to expire and was
eventually delisted, no judgment was yet to be rendered in favor of the private
respondent. An intent to evade payment of his claims cannot therefore be implied
from the expiration of Philsa's license and its delisting.

Neither the Court was convinced that the creation of the second corporation imply
fraud since it was organized and registered as early as 1981, several years before
the filing of the complaint.