State v Standard Oil

State filed suit against defendant Standard oil of its rights to be a corporation

Claimes that it abused its coporate franchise by being a party in an agreement against public policy

Agreement was that stockholders of other corporations where stock hold by the contracting party was
given to trustees with the power to manage to manage the coporation

Trustees in exchange received trust certificates in exchange for stock

The purpose of this agreement was to secure a uniform organization in the oil business

Such agreement is against public policy and ultra vires

Issue: w/n standard oil be regarded as a party in tis corporate capacity

Held: Yes

General rule is that a corporation is a legagal entity, existing separate from the natural persons
composing it

For the convienience of the company in dealing its business, the liabilities debts properties are separate
from its stockholders.

All fictions of law has been introduced for the purpose of convenience and to serve the ends of justice.

But when they are urged to an intent and purpose that is not within the policty of the fiction, this
disregarded by the courts
Laguna Trans v SSS

Laguna transpo Inc filed with CFI laguna stating that it is not a member of SSS and not obliged to pay
premiums under the Social security act.

Respondent SSS filed for dismissal stating that petitioner is covered by said act and that it has been
operation for at least 2 years

Facts: petitioner is domestic coporation organized in laguna

Respondent served notice to pay remit premiums of its employees

That in 1949 the Binan Transpo company sold its lines to Mercado, Mata and Cruz

That after the sale, the trio formed un unregistered partnership with Laguna Transpo which continued
the lines of Binan Transpo in addition with new lines acquired from the Public Service Commission

That trio along with 2 others organized a new corporation called Laguna Transpo Company Inc in 1956

That the corporation continued the same trasporation business of the unregistered partnership

Issue: Is laguna traspo covered by SSS?

Held: Yes

Laguna Transpo commenced operation on 1949

The trio plus 2 converted the partnership into a corporation by registering its AOI with the SEC in 1956

The name Laguna tranpo was not altered except with the addition of the word inc to indicate that it has
been incorporated.

The corporation continued the same transporation business using the same lines and equipment.

The only change was the form of orginzation

Hence said entity has been in the business for at least 3 years prior to the enactment of the SSA in 1954
and at least 2 years prior to the amendatory act in 1957

To adopt petioners contention would the defeat the purpose of the SSA since any business could
circumvent the statute by changing the form of organization every other year and claim exemption.
Marvel Bldg v DAVID
Namarco v AFC

Associated Finance through its president Sycip entered in agreement with NAMARCO for sugar in
exchange for busilaak and pasumil.

In case of failure, pay liquidated damages worth 20% of the contractual value of the sugar

Associated failed to deliver despite demands from NAMARCO

NAMARCO filed with the lower courts to recover payment and damages

Issue: W/N Sycip may be held liable jointly with NAMARCO

Held: Yes

Records show that capital stock of Associated that Sycip owns 60k worth of shares while his wife owns
20k

The subscribed capital stock of Associated is 105k.

Sycip himself referred himself as the one who transacted the business in his personal capacity and
that the exchange is a personal contract

That it was sycip who made personal represations to Namarco

Sycip is guilty of fraud by giving false representatios by inducing NAMARCO into entering the
agreement

The fact that associated who he represented and whose business he was in control, was in no position
to comply with the obligation he presumed

Sycip cannot hide behind the protection of the corporate entity

Jacinto v CA

Jacinto is president and GM of Inalnd

He and his wife own 52% of the shares of the corp.

Facts show that Jacinto signed 3 trust receipts in his capacity as president

Respondent Metrobank filed a case to collect payment

Jacinto gave conflicting statements

In the lower court he argued that he was not the president of Inland but the GM

On the other hand Jacinto argued he is not personally liable since he signed it in his capacity as GM and
president of Inland

The court ruled in favor of metrobank stating that Jacinto is the corporation itself since he was the one
who dealt with MB the entire transaction. CA upheld it

Jacinto questions the ruling stating that the court erred in piercing the fiction of corporate identity since
it was not alleged in the complaint

Issue: Did The lower court err in piercing the fiction of corporate identity?

Held: No

While there is no allegation on the complaint that the corporation is a mere alter ego of the petitioner

Subsequent development from the facts show that respondent Metrobank sought to prov the petioner
and corporation are one. No objection was raised by the petioner

When evidence is presented by one party either with express or implied consent from the opposite
party as to issues not alleged in the pleadings, judgment may be made towards those issues.

There is implied consent to the evidence when the opposite party fails to object thereto
Calarapols v CIR

Complaint for unfair labor practice filed by respondent Allied Workers Respondent Garlitos and 10
workers from illegal dismissal from Claporols Steel

Respondent court found claporols guilty of union busting and ordering Claporols to

1) C&D from illegal labor practices

2) reinstate respondents with backwages

Petioner claporols filed an MR but was denied

Counsel for respondents filed a motion for execution which was granted

Respondents however were refused reinstatement by petitioner

Petioners filed an opposition stating that the current situation engulfing the company, petioner
claporols could not personally reinstate resoondents

Even assuming that respondents are allowed backwages, only limited to three months pursuant to the
court ruling the case of Sta Cecilia v CIRA

And since clporols steels ceased to operate on dec 7 1962, wages can only go up to there

Respondent workers condent that claporols steel and nail plant and claporols steel nail corp are one
and the same and controlled by claporols with the latter succeeding the former

Issue:

Is claporols steel and nail plant and claporols steel nail corp one and same and controlled by claporols? –
YES

Whether the amount of backwages recoverable by workers should be amount only up to dec. 7 – Yes

Held

1. Claporols steel and nail plant ceased operations on June 30 1957 which was succeeded by claporols
steel and nail corp the following day until dec 7 19 1962
It is clear that the latter corpo is a successor of the first and its emergence was timed to avoid financial
liability from its presdessecor

2. Both corporations were owned by petioner and there was no break in the succession.

The avoiding the liability is very patent considering that claporols owns 90% of the subscribed shares of
stock of the second corporation and all the assets of the first corporation were turned over to the
second one

The second corpor seeks a protective shield of the corporate fiction whose veil could and should be
pierced sinced it was used to evade obligation to employees.
Indophil Textile mill workers union v calica

Petioner Indophil workers union is a labor org registed with DOLE and the exclusive bargaining agent
of Indoph Textile mills

Respondent calica impleaded in his official capacity an voluntary arbitrator of DOLE

Textile mills deals in the business of yarns and other kinds of its materials in Marilao Bulacan

In 1987, Workers union executed a bargaining agreement with Indophil Textile Mills from April 1 1987
to march 31 1990

In 1967 Indophil Acrylic was formed and registered with the SEC

Acrylic filed the Board of Investements for incentives under the 1987 omnibus code was approved on a
preferred non-pioneer status

1988, acrylic became operational and hired workers

1989 the workersof acrylic formed a union and exclusive bargaining agreement was executed

1990 union claimed that plant facilities built was an expansion of facilities of respondent company.

It is petiioners contention that Acrylic is part of the Indophil bargaining unit

Petiioners contention was opposed by respondent claiming that it is juridical entity different from
Acryllic

Petioner and respondent entered into submission agreement in 1990

Petioner notes the following evidence that Acrylic is an extension or expansion of respondent

Both corpos have their offices plants and facilities in marilao Bulacan

Many of the respondents own machinery were transferred and installed with acryllica

Employees of private respondent are the same persons manning acrylic

Private respondent states the business relationship bet. Them and acrylic is not proof of being a single
corporate entity since the services offered to them are merely auxiliary services or non-essential in the
production of acrylic

They also point out that the essential production is made by acrylic personell under control and
supervision of acrylic managers
Issue: W/N Acryllic is an extension of textile mills

W/N rank and file employees of acrylic be recognized as part of the bargaining unit

Held: No.

When there are valid grounds that exists, the piercing the veil of the corporate entity may be
disregarded and the corporation may be considered an association of people.

This doctrine applies when the coporate fiction is used to defeat public convenience, fraud or injustice.

Petioner seeks to pierce the coporate veil of acrylic alleging that the creation of the corporation is a
device made to evade the application of the Barganing agreement of union and respondent textile

Courts held that the facts are not sufficient to pierce the coporate veil considering that respondent and
acrylic are related in some way, some employees of both companies are one and the same person and
that the plants and offices are located in the same area.

Since acrylic is not an extension of textile, rank and file employees are not within the purview of the
petioner.
Naflu v Ople

Naflu filed a request for conciliation with beruea of labor relations requesting intervention with its
dispute with management over money claims and refusal to conclude a collective bargaing agreement
after it has been concluded and a run away shop made to bust the union

Pending the CBA, respondent company lawman declared temporary cessation of operations which in
reality was a lockout

After efforts to mediate the charges of unfair labor practices and non payment of money claims have
failed, union filed to strike

1982, Firm offered 200k as settlement of claims

Union rejected since it was tantamount to termination of union

Union then filed a complaint for unfair labor practice against the management of lawman

Pending this, company maintained a run away shop and it s machine from Libra to Dolphon Garment
[Name of lawman was changed to Libra]

To justify closure, respondent claims it was due to losses

This was refuted by petitioners stating that cost of goods of lawman in 1981 was 2mil while in 1982 it
was 3.7mil meaning there was a suddent increase in production which needed a huge labor cost

Issue: W/N the corporate veil be pierced because of unfair labor practice

Held: Yes

Obvious from the facts that libra tried to evade obligation through the shield of coporate fiction.

The piercing of the corporate veil is applicable as the acts of company was made to evade obligations to
its employees.

Lawman is guilty of unfair labor practice and the respondents order for reinstatement should be
followed

After fuinding the Lawman transferred its operations to Libra and then later changed its name to
Dolphin, respondent cannot deny backwages simply because Lawman ceased operation

As Libra/Dolphin is an alterego of Lawn, the former must bear the consequences of its act by reinstating
the petitioners to their former positions.
Asionic v NLRC

API and its president Frank Yih filed a case against NLRC seeking to set aside a decision which granted
sepereation pay to respondents Boaquina and Gayola

API is a corporation in business of making conductor chips for export

Boaquina and Gayold worked in API in 79 and 88 as clerk and production operator

1992, API made a bargaining agreement with FFW

Deadlock ensued, FFW filed for notice of strike.

Customers of API did not send materials for assembly to API due to this

Due to the circumstance API suspended corporations and Gayola and Boaquina were suspended from
work

An agreement was concluded by API and FFW and boquina was directed back to work

Gayola was not due of the Clare/Theta account, where they have yet to renew production orders

API was then constrained to implement a company wide retrenchment affecting 105 eployees

The selection was then made on employee performance

Boaquina was affected by this but gayola was not supposed since she had high performance ratings

However, gayola was given an indefinite leave of abscne

Gayola and Boaquina joined the lakas an mangagawa labor union where they became BOD

Labor union filed a notice of strike against API for unfair labor practices

API brought before NLRC stating that strike was illegal

LA arbiter villarente decalred strike to be illegal

Labor Arbiter Canizares however declared API guilty of illegal dismissal

Decisions was appealed to the NLRC

NLRC upheld decision of LA Villarente that the strike was illegal but modified Canizares decision staking
that the respondents were validly termninated due to the retrenchment policy

However, respondents were granted separation pahy and one month worth of salary by way of
indemnity since corpo did not inform them of the entrenchment policy
Petioners moved for MR but was denied

ISSUE: W/N an officer of a corpo is liable for the obligation of a corpo absent any proof of bad faith

Held: No

Villarentes decision declaring respondents to have lost employment status due to participation in an
illegal strike is oof no significance.

The issue is the joint and solidary obligation of petitioner Frank Yun with API

Court states that even if Frank Yih had no direct had in the dismissal he should be personally liable since
he is president and majority stockholder.

The doctrine is clear that althout a corporation is a distinct entity sepreate from its stocholders, this can
disregarded on valid grounds when a corporation is used to evade obligations, justify a wrong or used
for fraud.

The courts now go to the personal liability of petioner Sunio who is responsible with Petioner Company
and payment for the backwages of respondent.

This is a reversible error since the Assistant Regional Director failed to disclose why he was personally
libale.

Court held that there was no evidence showing that Sunio acted in bad faith in termingating the services
of the respondent. His acts are considered a corporate act,
Villa rey transit v ferrer

Villarama is a operator of a bus company under the name villa rey transit under 2 certs of public
convenience

Such certs allowed him to operate a total of 32 buses from panagasinan to manila an vice versa

He sold the 2 certs to Pangasinan transpo company inc for 350k for the condition that pantranco does
not apply for a TPU service within 10 years

Villa rey was then organized with a capital stock of 500k

Three months after villa rey bought 5 certs 49 buses and tools

They prayed to PSC issuance of provisional authority from PSC which

granted under the condtition that it may revoked by them anytime and shall be subject to any action

Sheriff of manila levied 2 of the 5 certs.

On July 5 a public sale was made and ferrer was the highest bidder

Ferrer sold it to philtranco

Villa rey inc filed with the CFI for annulment of sale

CFI stated that villa rey is distinct from villa rey and therefore the annulment is void

Held:

Villa rey is an alter ego is villarama and restrictive valise is binding against philtranaco and that the
restrictive clause is binding upon the the said corporation

The stipulation prohibiting villarama for a period of 10 years to apply for TPU service covered by the
certs sold by philtranco is valid

However it is shown that villa rey inc is an alter ego villarama

The courts hold the the corporation be enjoined from operating the line subject the prohibition

The courtds hold that in the nature of an agreement that suppresses competition, is merely incipdental
to the main agreement.

The suppression is only partial or limited

Cease v CA

Forrest cease and 5 other americans organizaed tiaong milling and plantation company which bought
several properties.

All other incorporaters were then bought out by forrest and his children

The charter lapsed in 1958 but the record is silent on whether steps were taken to liquidate it.

1959 forrest died and his shares were disposed to his children

Two of his children (Benja and Florence) wanted actual division while the others wanted reincorporation

The other four children proceeded to incorporate themselves into FL Cease Plantntation company
registered with the SEC

BF then initiated proceeding for the settlement of the estate

Then afterwards filed a case stating that FL cease is identical to Tiaong Milling and that properties be
divided among Forrests children and intestate heirs.

During the pendency of the case, on the eve of the expiry of the 3 year period of liquidiation of corpos,
the board of liquidators of Taiong Milling, executed an assignment and conveyance of properties and
trust agreement in FL cease as trustee of Tiaong Milling

2 cases in CFI quezon

Judge maddela ruled in favor of BF declaring that the properties of Tiong Milling and CF are are part of
Forrests estate and that it should be divided among the children

Issue: W/N the properties of CF cease and Tiaong Milling should be part of Forrests estate

Held: Yes.

The court found evidence that FL Cease and Tiaong Milling as one and the same personality.

While records show that the original incorporaters were aliens, friends with one another, in its existence
it developed into a close family corporation

The BOD belong one family

Forrest held the majority stocks and had control and management over its affairs.

During the reconstruction of its records in1947, only 9 nominal shares out of 300 belong to the children
another closest to them
Delpher trades v CA

Delphin and palagia Pacheco owners of property in polo

Leased the property to CCII provided that should they sell it, CCII has priority to buy

CCII assigned its rights to Hydro Pipes with consent of pachecos

Deed of exchange bet pachecos and CCII where the pachecos eased the property for 2500 shares in
delpher

On the ground that it was not given priority to buy first, Hydoro filed a complaint for reconveyance of
the lot

CFI ruled in favor of Hydro

Petioners filed for certiorari

Neria, son-inlow of pachecos testified that Delpher is a family corporation organized by the childeron of
Pacheco who owned in common the land leased to Hydro

That to accomplish this, the property was transferred to the corporation

That the lease

Garnett v Southern Railyway

Koppel v Yatco

Lidell v CIR