CHILD LEARNING CENTER, INC.

and LIMON vs TAGORIO

GR No. 150920 / 25 Nov 2005 / J. Azcuna
Petition for review on certiorari of the decision and resolution of the CA

FACTS
Timothy Tagorio was a grade 4 student at Marymouth School, an academic institution operated
and maintained by Pet Corp, was locked inside of the boys comfort room, opened the window
and fell three stories. Timothy suffered serious multiple physical injuries.
The Tagorios filed an action under Art. 2176 of the Civil Code against CLC, members of the
board, and the Administrative Officer of the school.
CLC argued that there was nothing wrong with the locking mechanism of the door and that the
fall of Timothy was not due to its fault or negligence moreover, they argued that they had
exercised the due care and diligence of a good father of a family to ensure the well-being of its
students.
Trial Court ordered CLC and Spouses Limon to solidarily pay the Tagorios a total of P550k. Trial
Court disregarded the Corporate Fiction and held the spouses Limon personally liable because
they were the one who actually managed the affairs of the CLC.
CLC and Spouses Limon appealed. CA affirmed the decision in toto.

ISSUE: WON Spouses Limon should be held personally liable? NO.

DISPOSITIVE: PETITION IS PARTY GRANTED and the DECISION and RESOLUTION of the CA are
MODIFIED in that petitioners Limon are absolved from personal liability.

RATIO:
There was no basis to pierce CLCs separate corporate personality. To disregard the corporate
existence, the plaintiff must prove: (1) Control by the individual owners, not mere majority or
complete stock ownership, resulting in complete domination not only of finances but of policy
and business practice in respect to a transaction 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 a dishonest and unjust act in contravention of the plaintiffs legal
right; and (3) the control and breach of duty must proximately cause the injury or unjust loss
complained of.
The absence of these elements prevents piercing the corporate veil. The evidence on record
show that these elements are present, especially given the fact that plaintiffs complaint had
pleaded that CLC is a corporation duly organized and existing under the laws of the Philippines.

NOTE:
CLC is still liable under the doctrine of Res Ipsa Loquitur. Timothy fell out through the window.
This shows that something was wrong with the door or the knob. CLC is clearly answerable for
failure to see to it that dooes of their school toilets are at all times in working condition. The fact
that a student had to go through the window, instead of the door, shows that something was
wrong with the door.