CORPO DIGEST OF CASES
separate and distinct from those acting for and in its
DOCTRINE OF SEPARATE JUDICIAL ENTITY
SYMEX SECURITY SERVICES, INC. AND RAFAEL Y.
ARCEGA, PETITIONERS, V. MAGDALINO O. RIVERA, JR.
AND ROBERTO B. YAGO, RESPONDENTS.
Non-payment of benefits
Facts: On February 25, 2003, respondents filed a
complaint for nonpayment of holiday pay, premium for
rest day, 13th month pay, illegal deductions and
damages. On March 17, 2003, Capt. Cura the
Operations Manager of petitioner Symex told
respondents that they would not be given a duty
assignment unless they withdrew the complaint they
filed before the LA. Respondents were made to choose
between resignation or forcible leave. Respondents
both refused to obey Capt. Cura, who then told them
that they were dismissed.
The next day or on March 18, 2003, respondents
amended their complaint before the LA to include illegal
dismissal
The LA Ruling: dismissed respondents' amended
complaint for illegal dismissal but ordered petitioner
Symex to pay respondents' their proportionate 13th
month pay. Aggrieved, respondents appealed to the
NLRC.
The NLRC Ruling: the NLRC reversed and set aside the
LA ruling and a new one entered declaring complainants
illegally dismissed by Respondents who are hereby
ORDERED to pay the benefits entitled. Petitioners
moved for reconsideration, but this was denied.
Dissatisfied, they filed a petition for certiorari before
the CA.
CA RULING: affirmed the questioned NLRC Decision.
Hence this petition.
ISSUE: whether petitioner Arcega should be held
solidarily liable with petitioner Symex for respondents'
monetary awards. (NO)
HELD: as to petitioner Arcega's liability for the
obligations of Symex to respondents, the Court held
that there was no showing that Arcega, as President of
Symex, willingly and knowingly voted or assented to the
unlawful acts of the company.
A corporation is a juridical entity with a legal personality
behalf and, in general, from the people comprising it.
Thus, as a general rule, an officer may not be held liable
for the corporation's labor obligations unless he acted
with evident malice and/or bad faith in dismissing an
employee. Section 31 of the Corporation Code is the
governing law on personal liability of officers for the
debts of the corporation. To hold a director or officer
personally liable for corporate obligations, two
requisites must concur: (1) it must be alleged in the
complaint that the director or officer assented to
patently unlawful acts of the corporation or that the
officer was guilty of gross negligence or bad faith; and
(2) there must be proof that the officer acted in bad
faith.
Based on the records, respondents failed to specifically
allege either in their complaint or position paper that
Arcega, as an officer of Symex, willfully and knowingly
assented to the acts of Capt. Cura, or that Arcega had
been guilty of gross negligence or bad faith in directing
the affairs of the corporation. In fact, there was no
evidence at all to show Arcega's participation in the
illegal dismissal of respondents. Clearly, the twin
requisites of allegation and proof of bad faith, necessary
to hold Arcega personally liable for the monetary
awards to the respondents, are lacking. Arcega is
merely one of the officers of Symex and to single him
out and require him to personally answer for the
liabilities of Symex are without basis.
The Court has repeatedly emphasized that the piercing
of the veil of corporate fiction is frowned upon and can
only be done if it has been clearly established that the
separate and distinct personality of the corporation is
used to justify a wrong, protect fraud, or perpetrate a
deception. To disregard the separate juridical
personality of a corporation, the wrongdoing must be
established clearly and convincingly. It cannot be
presumed.
THE LINDEN SUITES, INC. PETITIONER, VS. MERIDIEN
FAR EAST PROPERTIES, INC., RESPONDENT.
G.R. No. 211969. October 04, 2021
Facts: petitioner filed a complaint for damages against
respondent Meridien Far East Properties, Inc. (MFEPI)
before the RTC of Pasig City, averring that while doing
excavation works for the construction of a building, it
discovered that the concrete retaining wall of the
adjacent building, owned by respondent, had
encroached on its property line.
Petitioner then informed respondent about the
encroachment which, in turn, the latter immediately
instructed its workers to remove the same. However,
respondent's workers were unable to finish it.
Petitioner was then compelled to hire a contractor to
complete the demolition. It then demanded payment of
the cost of the additional works it conducted but
respondent refused, which led to the filing of the
complaint.
The RTC adjudged respondent liable for the cost of the
demolition, actual and compensatory damages, and
attorney's fees. Which was then affirmed by the CA and
the SC. Thus, an Entry of Judgment was subsequently
issued on January 23, 2009
Thereafter, the Sheriff attempted to serve the writ on
respondent’s office in Makati but failed. Petitioner then
advised the sheriff to serve the writ to respondent at
Mandaluyong City, its registered address in its 2006
General Information Sheet (GIS).
On June 3, 2010, the Sheriff proceeded to the said
location to serve the writ. However, Atty. Baculi, the
Legal and Administrative Officer of Meridien East Realty
and Development Corporation (MERDC), informed him
that it was Meridien Development Group, Inc. (MDGI),
not respondent, which owned the office in the said
address. As a result, the sheriff returned the writ
unserved as per Sheriffs Return.
Petitioner observed that the 2006 GIS of respondent
and 2009 GIS of MERDC stated the same officers, the
officers were likewise shareholders of both corporations
and had similar residential addresses.
Thus, on November 8, 2010, petitioner filed an Urgent
Motion to Examine Judgment Obligor before RTC of
Pasig City, the same trial court which rendered the final
judgment. It prayed that respondent's officers be
directed to appear before the court for an examination
for the satisfaction of the RTC Decision. However,
Respondents claimed that that their examination is a
violation of the doctrine of separate corporate
personality.
RTC RULING: RTC denied petitioner's motion and ruled
that to call upon the officers to ascertain the properties
and income of respondent for purposes of satisfying the
execution of the final judgment would be violative of
the doctrine of separate juridical entity
CA RULING: dismissed the petition. Hence, this Petition
for Review on Certiorari.
ISSUE: May the RTC, as the court that rendered
judgment on petitioner's complaint, examine
respondent's officers (YES)
HELD: In the case at bench; the writ of execution was
returned unserved, It was therefore imperative for the
judgment court to issue an order for examination of
respondent after the writ of execution was returned
unsatisfied. Such order would have ensured the
satisfaction of its judgment, all the more so if it has
already attained finality. In other words, the RTC,
pursuant to its residual authority, should have issued
auxiliary writs and employed processes and other
means necessary to execute its final judgment.
Lastly, the doctrine of separate juridical personality is
inapplicable in the case at bench.
The doctrine of separate juridical personality provides
that a corporation has a legal personality separate and
distinct from those individuals acting for and in its
behalf and, in general, from those comprising it. Any
obligation incurred by the corporation, acting through
its directors, officers and employees, is therefore its
sole liability. This legal fiction may only be disregarded if
it is used as a means to perpetrate fraud or an illegal
act, or as a vehicle for the evasion of an existing
obligation, the circumvention of statutes, or to confuse
legitimate issues.
Here, Petitioner wanted the officers to be examined not
for the purpose of passing unto them the liability of
respondent as its judgment obligor. In fact, it never
averred in the motion any intention to make the officers
liable for respondent's obligation due to the latter's
purported attempts to evade the execution of the final
judgment. What is clear therein is that the sole
objective of the examination of the officers was to
ascertain the properties and income of respondent
which can be subjected for execution in order to satisfy
the final judgment and nothing else.

Paranaque industry owners Assoc v Recio G .R. No.
243368
Facts: On November 15, 2012, petitioner PIOA.,
represented by Sy and Escobilla (petitioner), filed a
Complaint for unlawful detainer against respondents
before the Metropolitan TC. Petitioner alleged that it is
the lawful owner of a parcel of land, which is being
illegally occupied by respondents.
Petitioner claimed that only respondents' predecessor-
in interest, the late Recio alone, was allowed to stay in
the property as the caretaker of the subject property.
Eventually petitioner intended to use the subject in
2009. Thus, petitioner sent several demand letters to
respondents to vacate and surrender the subject
property. However, respondents still failed to vacate
the same. Thus, petitioner was constrained to file the
instant Complaint.
have been transferred to the new corporation.
therefore, the CA held that PIOA's properties, including
the subject property, cannot be deemed as owned by
petitioner.
Hence, this petition.
ISSUE: whether the CA correctly reversed the rulings of
the MeTC and the RTC, which resulted in the dismissal
of petitioner's Complaint for unlawful detainer. (YES)
HELD: In this case, records clearly show that the subject
property is owned by PIOA; and as such, it is the rightful
plaintiff to the unlawful detainer case filed by
petitioner. Since PIOA's corporate existence had long
ceased on August 11, 2003, then its board of directors
may be deemed as its trustees who may institute or
continue suits on its behalf. However, the instant suit is
filed by petitioner, a newly-formed corporation, which
should be considered as a separate and distinct entity
from PlOA, as evinced by their different SEC Reg. Nos.
(i.e., SEC Reg. No. 0109189 for PIOA and SEC Reg. No.
CN201204425 for petitioner).

Respondents emphasized that petitioner is not a real
party in interest in the suit, because the real owner of
the subject property is the Paranaque industry owners
association (PIOA), whose registration No. 0109189
was revoked by the SEC for noncompliance with SEC’s
reportorial requirement.
METC RULING: ruled in favor of petitioner and
accordingly, ordered respondents vacate and pay the
reasonable compensation for the use of the property.
RTC RULING: affirmed the Me TC ruling
CA RULING: reversed and set aside the RTC Decision and
dismissed the complaint for unlawful detainer. CA
found that petitioner is not the owner of the subject
property and pointing out that the original owner
thereof is PIOA, whose SEC registration No. 0109189
was revoked by the SEC due to noncompliance of
reportorial requirements.
Thus, it is incorrect for petitioner to argue that it is "one
and the same" as PIOA, considering the time-honored
doctrine that ''a corporation has a personality separate
and distinct from those of its stockholders and other
corporations to which it may be connected."
In sum, the CA correctly ruled that since petitioner (with
SEC Reg. No. CN201204425) is a juridical entity separate
and distinct from PIOA (with SEC Reg. No. 0109189),
then the former is not a real party in interest to the
unlawful detainer complaint it filed before the MeTC.
“when a plaintiff is not a real party in interest, the case
is dismissible on the ground of lack of cause of action.

The CA further ratiocinated that although corporations

with revoked registrations may file petitions to lift
orders of revocation that would restore its existence,
PIOA did not avail of this remedy. Instead, its board of
directors opted for a re-registration, which created a
new entity, herein petitioner, with SEC Reg. No.
CN201204425 an entirely separate and distinct entity
from PIOA. Hence, the property cannot be deemed to

DOCTRINE OF PIERCING THE VEIL OF CORPORATE
FICTION
MARIA LEA JANE I. GESOLGON AND MARIE STEPHANIE
N. SANTOS, PETITIONERS, VS. CYBERONE PH., INC.,
MACIEJ MIKRUT, AND BENJAMIN JUSON,
RESPONDENTS. G.R. No. 210741
FACTS: Petitioners were hired on March 3, and April 5,
2008, respectively, by Mikrut as part-time home-based
remote Customer Service Representatives of CyberOne
AU. Thereafter, they became permanent employees and
were eventually promoted as Supervisors
October 2009, Mikrut, the CEO of both CyberOne AU
and CyberOne PH, asked petitioners, together with
Juson, to become dummy directors and/or
incorporators of CyberOne PH to which petitioners
agreed. As a result, petitioners were promoted as
Managers and were given increases in their salaries. The
salary increases were made to appear as paid for by
CyberOne PH
However, in the payroll for November 16 to 30, 2010,
Mikrut reduced petitioners' salaries from P50,000.00 to
P36,000.00, of which P26,000.00 was paid by CyberOne
AU while the remaining P10,000.00 was paid by
CyberOne PH. Aside from the decrease in their salaries,
petitioners were only given P20,000.00 each as 13th
month pay for the year 2010.
March 2011, Mikrut made petitioners choose one from
three options: (a) to take an indefinite furlough and be
placed in a manpower pool to be recalled in case there
is an available position; (b) to stay with CyberOne AU
but with an entry level position as home-based
Customer Service Representative; or (c) to tender their
irrevocable resignation. Petitioners alleged that they
were constrained to pick the first option in order to
save their jobs.
Hence, petitioners filed a case against respondents and
CyberOne AU for illegal dismissal. They likewise claimed
for non-payment or underpayment of their salaries and
13th month pay; moral and exemplary damages; and
attorney's fees.
On the other hand, CyberOne PH, Mikrut and Juson
denied that any employer-employee relationship
existed between petitioners and CyberOne PH. They
insisted that petitioners were incorporators or directors
and not regular employees of CyberOne PH. They
claimed that petitioners were employees of CyberOne
AU and that the NLRC had no jurisdiction over
CyberOne AU because it is a foreign corporation not
doing business in the Philippines.
LA RULING: held that petitioners are not employees of
CyberOne PH as the latter did not exercise control over
them. Also, since there was no evidence showing that
CyberOne PH and CyberOne AU are one and the same
entity, the presumption that they have personalities
separate and distinct from one another stands. The LA
ruled that petitioners are merely shareholders or
directors of CyberOne PH and not its regular employees.
NLRC RULING: ruled that petitioners are employees of
CyberOne AU and CyberOne PH. The fact that
petitioners are nominal shareholders of CyberOne PH
does not preclude them from being employees of
CyberOne PH. and that from January 2010 to April 2011
CyberOnePh and CyberOneAU paid their monthly
salaries and other relevant compensation, as evidenced
by employment terms and presented pay slips.
The NLRC noted that the Furlough Notifications dated
March 30, 2011 issued by CyberOne AU to petitioners
were, in fact, notices of dismissal. Petitioners were
informed that respondent CyberOne AU was unable to
provide them with work but that it may engage their
services again in the future. Lastly, the NLRC noted that
CyberOne AU is doing business in the Philippines due to
its participation in the management, supervision or
control of CyberOne PH which is indicative of a
continuity of commercial dealings or arrangements.
Thus, the doctrine of piercing the corporate veil must
be applied as to it.
CA RULING: the appellate court reversed the findings of
the NLRC and ruled that no employer-employee
relationship existed between petitioners, on one hand,
and respondent CyberOne PH, on the other hand. First,
the appellate court found no evidence that CyberOne
PH hired petitioners as its employees. It held that the
NLRC's reliance on the pay slips presented by
petitioners as proof that they were employees of
respondent CyberOne PH was flawed.
The appellate court also stressed that the Furlough
Notifications were issued by CyberOne AU and not by
CyberOne PH. This means that CyberOne PH did not
have the power of termination over the petitioners.
Lastly, there was no evidence that CyberOne PH
exercised control over the means and method by which
petitioners performed their job.
The appellate court also held that the NLRC misapplied
the doctrine of piercing the corporate veil. It ruled that
although it was established that Mikrut and CyberOne
AU owned majority of the shares of CyberOne PH, such
fact may not be a basis for disregarding the
independent corporate status of CyberOne PH. Mere
ownership by a single stockholder or by another
corporation of all or nearly all of the capital stock of a
corporation is not in itself sufficient reason for
disregarding the fiction of separate corporate
personalities.
ISSUE: Whether petitioners were employees of
CyberOne PH and CyberOne AU. (NO)
HELD: Petitioners were requested by respondent Mikrut
to become stockholders and directors of CyberOne PH
with each one of them subscribing to one share of
stock. However, petitioners contend that they were
hired as employees of CyberOne PH as shown by the
pay slips. Other than the pay slips presented by
petitioners, no other evidence was submitted to prove
their employment by CyberOne PH. Petitioners failed to
present any evidence that they rendered services to
CyberOne PH as employees thereof.
The records reveal that petitioners submitted letters of
resignation as directors of CyberOne PH and not as
employees thereof. This fact negates their contention
that they were dismissed by CyberOne PH as its
employees. Lastly, the power of control of CyberOne PH
over petitioners is not supported by evidence on record.
To reiterate, petitioners failed to prove the manner by
which CyberOne PH alledgedly supervised and
controlled their work. In fact, petitioners failed to
mention their functions and duties as employees of
CyberOne PH. They merely relied on their allegations
that they were hired and paid by CyberOne PH without
specifying the terms of their employment as well as the
degree of control CyberOne PH had over the means and
method by which their work would be accomplished.
While CyberOne AU owns majority of the shares of
CyberOne PH, this, nonetheless, does not warrant the
conclusion that CyberOne PH is a mere conduit of
CyberOne AU. The doctrine of piercing the corporate
veil applies only in three basic instances, namely: (a)
when the separate distinct corporate personality
defeats public convenience, as when the corporate
fiction is used as a vehicle for the evasion of an existing
obligation; (b) in fraud cases, or when the corporate
entity is used to justify a wrong, protect a fraud, or
defend a crime; or (c) is used in alter ego cases, i.e.,
where a corporation is essentially a farce, since it is a
mere alter ego or business conduit of a person, or
where the corporation is so organized and controlled
and its affairs conducted as to make it merely an
instrumentality, agency, conduit or adjunct of another
corporation
In the case at bar, the court held that the doctrine of
piercing the corporate veil is unwarranted in the
present case. First, no evidence was presented to prove
that CyberOne PH was organized for the purpose of
defeating public convenience or evading an existing
obligation. Second, petitioners failed to allege any
fraudulent acts committed by CyberOne PH in order to
justify a wrong, protect a fraud, or defend a crime.
Lastly, the mere fact that CyberOne PH's major
stockholders are CyberOne AU and respondent Mikrut
does not prove that CyberOne PH was organized and
controlled and its affairs conducted in a manner that
made it merely an instrumentality, agency, conduit or
adjunct of CyberOne AU. In order to disregard the
separate corporate personality of a corporation, the
wrongdoing must be clearly and convincingly
established.
Moreover, petitioners failed to prove that CyberOne AU
and Mikrut, acting as the Managing Director of both
corporations, had absolute control over CyberOne PH.
Even granting that CyberOne AU and Mikrut exercised a
certain degree of control over the finances, policies and
practices of CyberOne PH, such control does not
necessarily warrant piercing the veil of corporate fiction
since there was not a single proof that CyberOne PH
was formed to defraud petitioners or that CyberOne PH
was guilty of bad faith or fraud.
Hence, the doctrine of piercing the corporate veil
cannot be applied in the instant case. This means that
CyberOne AU cannot be considered as doing business in
the Philippines through its local subsidiary CyberOne
PH. This means as well that CyberOne AU is to be
classified as a non-resident corporation not doing
business in the Philippines

RONNIE ADRIANO R. AMOROSO AND VICENTE R.

CONSTANTINO, JR., Petitioners, v. VANTAGE DRILLING
INTERNATIONAL AND GROUP OF COMPANIES
(FORMERLY VANTAGE DRILLING COMPANY AND
GROUP OF COMPANIES), SUPPLY OILFIELD SERVICES,
INC., LOUIS PAUL HEUSAFF, VANTAGE INTERNATIONAL
MANAGEMENT CO. PTE. LTD., VANTAGE
INTERNATIONAL PAYROLL COMPANY PTE. LTD., AND
VANTAGE DRILLER III COMPANY, Respondents.

G.R. No. 238477. August 08, 2022

FACTS: