HELD: No. Respondent sheriff Dalisay incorrectly chose to pierce the
In 1984, the National Labor Relations Commission issued an
veil of corporate entity and usurped a power belonging to the
order against Qualitrans Limousine Service, Inc. (QLSI)
court.
ordering the latter to reinstate the employees it terminated and
He wrongly assumed that since Cruz is the owner/president of
to pay them backwages.
the company, that they are one and the same.
Quiterio Dalisay, Deputy Sheriff of the court, to satisfy the
backwages, then garnished the bank account (Philtrust bank) of
As a legal entity, a corporation has a personality distinct
and separate from its individual stockholder/members.
Just because that he is the president of the corporation does not
Adelio Cruz who was not the judgment debtor. Rather, the
mean that the property he owns or possesses is also the
judgment debtor in that case was the company QLSI .
property of the corporation.
Dalisay justified his act by arguing that:
a. Cruz was the owner and president of QLSI b. The counsel for the discharged employees advised him to garnish the account of Cruz
Since the president, as an individual, and the corporation are
separate entities.
Notes:
A corporation incurs its own liabilities and is legally
responsible for payment of its obligations. In other words, by virtue of the separate juridical personality of a corporation, the corporate debt or credit is not the debt or credit of the stockholder. This protection from liability for shareholders is the principle of limited liability
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. For reasons of public policy and in the interest of justice, the corporate veil will justifiably be impaled only when it becomes a shield for fraud, illegality or inequity committed against third persons.
ISSUE: Should the personal property of Cruz (president) of the