Corpo Case 1

8/10/2019 Corpo Case 1

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G.R. No. 82797 February 27, 1991

GOOD EARTH EMPORIUM INC., an !IM "A PING, petitioners,

vs.

HONORA#!E COURT OF APPEA!$ an ROCE$%RE&E$ REA!T& INC., respondents.

A.E. Dacanay for petitioners.

Antonio Quintos Law Office for private respondent.

PARA$,J.:p

This is a petition for review on certiorariof the December 29, 1987 decision 'of the Court of Appeals in CA!.". #o. 119$%

entitled &"'C()"(*() "(A+T*, #C. vs. -'#'"A+( /0D!( "(!'#A+ T"A+ C'0"T ' A#+A, "A#C- 33, !''D

(A"T- (4'"0, #C. and + 5A 4#!& reversin6 the decision of respondent /ud6e ''of the "e6ional Trial Court of

anila, ranch 33 in Civil Case #o. 8%383, which reversed the resolution of the etropolitan Trial Court 'f anila,

ranch 28 in Civil Case #o. %9$9, ''' denin6 herein petitioners: motion to ;uash the aliaswrit of ehereinafter desi6nated as "'C() for brevit@ filed

on 'ctober 13, 1983, an eectment case >0nlawful Detainer@ a6ainst herein petitioners, !''D (A"T- (4'"0, #C.

and + 5A 4#!, hereinafter desi6nated as !((, >Rollo, p. 21? Anne< && of the 4etition@. After the latter had tendered

their responsive pleadin6, the lower court >TC, anila@ on motion of "oces rendered ud6ment on the pleadin6s dated

April 17, 1983, the dispositive portion of which states=

/ud6ment is hereb rendered orderin6 defendants >herein petitioners@ and all persons claimin6 title

under him to vacate the premises and surrender the same to the plaintiffs >herein respondents@? orderin6

the defendants to pa the plaintiffs the rental of 4$,%%%.%% a month be6innin6 arch 198 up to the

time defendants actuall vacate the premises and deliver possession to the plaintiff? to pa attorne:s

fees in the amount of 4,%%%.%% and to pa the costs of this suit. > Rollo, p. 111? emorandum of

"espondents@

'n a 1$, 1983, "oces filed a motion for eRollo, p. 112, Ibid.@. 'n /une 1, 1983, the trial court resolved such motion rulin6=

After considerin6 the motion for the issuance of a writ of eherein respondents@ and the opposition filed in relation thereto and findin6 that the defendant failed to

file the necessar supersedeas bond, this court resolved to 6rant the same for bein6 meritorious. > Rollo,

p. 112@

'n /une 13, 1983, a writ of e


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set aside. oth parties appealed to the Court of Appeals? !(( on the order of dismissal and "oces on denial of his motion

for indemnit, both docFeted as CA!.". #o. 187C. !oin6 bacF to the ori6inal case, the etropolitan Trial Court after

hearin6 and disposin6 some other incidents, promul6ated the ;uestioned "esolution, dated April 8, 198, the dispositive

portion of which reads as follows=

4remises considered, the motion to ;uash the writ is hereb denied for lacF of merit.

The restrainin6 orders issued on arch 11 and 2, 198 are hereb recalled, lifted and set aside. > Rollo, p.

2%, TC Decision@!(( appealed and b coincidence. was raffled to the same Court, "TC ranch . "oces moved to dismiss the appeal but

the Court denied the motion. 'n certiorari, the Court of Appeals dismissed "oces: petition and remanded the case to the

"TC. eantime, ranch became vacant and the case was reraffled to ranch +.

'n April $, 1987, the "e6ional Trial Court of anila, findin6 that the amount of 41 million evidenced b ((Rollo, p. 7@

Article 123% of the Civil Code of the 4hilippines provides that=


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4ament shall be made to the person in whose favor the obli6ation has been constituted, or his successor

in interest, or an person authoriBed to receive it.

n the case at bar, the supposed paments were not made to "oces"ees "ealt, nc. or to its successor in interest nor is

there positive evidence that the pament was made to a person authoriBed to receive it. #o such proof was submitted but

merel inferred b the "e6ional Trial Court >Rollo, p. 2@ from arcos "oces havin6 si6ned the +ease Contract as 4resident

which was witnessed b /esus arcos "oces. The latter, however, was no lon6er 4resident or even an officer of "oces

"ees "ealt, nc. at the time he received the mone >((Rollo, p. 2%, TC decision@.

'n the other hand, /esus arcos "oces testified that the amount of 41 million evidenced b the receipt >(or credits@ which is owned b the corporation as a distinct le6al person

>Concepcion a6sasa+abrador v. CA!.". #o. 81$8, December 19, 1989@. As a conse;uence of the separate uridical

personalit of a corporation, the corporate debt or credit is not the debt or credit of the stocFholder, nor is the

stocFholder:s debt or credit that of the corporation >4rof. /ose #olledo:s &The Corporation Code of the 4hilippines, p. ,

1988 (dition, citing4rofessor allantine@.

The absence of a note to evidence the loan is e)ec. >f@ "ule 11, "ules of Court@. t is for !(( and +im 5a 4in6 to prove otherwise. n

other words, it is for the latter to prove that the paments made were for the satisfaction of their ud6ment debt and not

vice versa.

The fact that at the time pament was made to the two "oces brothers, !(( was also indebted to respondent corporation

for a lar6er amount, is not supportive of the "e6ional Trial Court:s conclusions that the pament was in favor of the latter,especiall in the case at bar where the amount was not receipted for b respondent corporation and there is absolutel no

indication in the receipt from which it can be reasonabl inferred, that said pament was in satisfaction of the ud6ment

debt. +iFewise, no such inference can be made from the e(


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the case.

The tenor of the #+"C ud6ment and the implementin6 writ is clear enou6h. t directed Hualitrans +imousine )ervice, nc.

to reinstate the dischar6ed emploees and pa them full bacFwa6es. "espondent, however, chose to &pierce the veil of

corporate entit& usurpin6 a power belon6in6 to the court and assumed improvidentl that since the complainant is the

ownerGpresident of Hualitrans +imousine )ervice, nc., the are one and the same. t is a wellsettled doctrine both in law

and in e;uit that as a le6al entit, a corporation has a personalit distinct and separate from its individual stocFholders or

members. The mere fact that one is president of a corporation does not render the propert he owns or possesses the

propert of the corporation, since the president, as individual, and the corporation are separate entities.

Anent the char6e that respondent e


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eanwhile, nter"esin, throu6h s. Tio, presented to anF of America the documents for the second availment under the

same letter of credit consistin6 of a pacFin6 list, bill of ladin6, invoices, e#@. Eith the help of the staff of the 4hilippine (mbass at an6FoF, as well as the police and customs

personnel of Thailand, the # a6ents, who were sent to Thailand, discovered that the vans eb@ the tele< declarin6

the letter of credit fraudulent was unverified and selfservin6, hence, hearsa, but even assumin6 that the letter of credit

was faFe, &the fault should be borne b the A which was careless and ne6li6ent& 4 for failin6 to utiliBe its modern meansof communication to verif with anF of Audha in Thailand the authenticit of the letter of credit before sendin6 the

same to nter"esin? >c@ the loadin6 of plastic products into the vans were under strict supervision, inspection and

verification of 6overnment officers who have in their favor the presumption of re6ularit in the performance of official

functions? and >d@ anF of America failed to prove the participation of nter"esin or its emploees in the alle6ed fraud as,

in fact, the complaint for estafa throu6h falsification of documents was dismissed b the 4rovincial iscal of "iBal.

'n appeal, the Court of Appeals 7 sustained the trial court? hence, this present recourse b petitioner anF of America.

The followin6 issues are raised b anF of America= >a@ whether it has warranted the 6enuineness and authenticit of the

letter of credit and, corollaril, whether it has acted merel as an advisin6 banF or as a confirmin6 banF? >b@ whether nter

"esin has actuall shipped the ropes specified b the letter of credit? and >c@ followin6 the dishonor of the letter of credit

b anF of Audha, whether anF of America ma recover a6ainst nter"esin under the draft e


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documents of title over the 6oods, while the buer ac;uires said documents and control over the 6oods onl after

reimbursin6 the banF.

Ehat characteriBes letters of credit, as distin6uished from other accessor contracts, is the en6a6ement of the issuin6 banF

to pa the seller of the draft and the re;uired shippin6 documents are presented to it. n turn, this arran6ement assures

the seller of prompt pament, independent of an breach of the main sales contract. this socalled &independence

principle,& the banF determines compliance with the letter of credit onl b e@ parties= >a@ the buyer, 12 who procures the letter of credit and obli6es himself to

reimburse the issuin6 banF upon receipts of the documents of title? >b@ the ban3 issuingthe letter of credit, 1 which

undertaFes to pa the seller upon receipt of the draft and proper document of titles and to surrender the documents to

the buer upon reimbursement? and, >c@ the seller, 1 who in compliance with the contract of sale ships the 6oods to the

buer and delivers the documents of title and draft to the issuin6 banF to recover pament.

The number of the parties, not infre;uentl and almost invariabl in international trade practice, ma be increased. Thus,

the services of an advising>notifin6@ banF 14 ma be utiliBed to conve to the seller the e


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petitioner banF:s letter of advice, its re;uest for pament of advisin6 fee, and the admission of nter"esin that it has paid

the same. That anF of America has asFed nter"esin to submit documents re;uired b the letter of credit and eventuall

has paid the proceeds thereof, did not obviousl maFe it a confirmin6 banF. The fact, too, that the draft re;uired b the

letter of credit is to be drawn under the account of !eneral Chemicals >buer@ onl means the same had to be presented to

anF of Audha >issuin6 banF@ for pament. t ma be si6nificant to recall that the letter of credit is an en6a6ement of the

issuin6 banF, not the advisin6 banF, to pa the draft.

#o less important is that anF of America:s letter of 11 arch 1981 has ethe !eneral Chemicals

of Thailand@. )ince anF of Audha disowned the letter of credit, however, anF of America ma now turn to nter"esin

for restitution.

etween the seller and the ne6otiatin6 banF there is the usual relationship e


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The other issues raised in then instant petition, for instance, whether or not anF of Audha did issue the letter of credit

and whether or not the main contract of sale that has 6iven rise to the letter of credit has been breached, are not relevant

to this controvers. The are matters, instead, that can onl be of concern to the herein parties in an appropriate recourse

a6ainst those, who, unfortunatel, are not impleaded in these proceedin6s.

n fine, we hold that O

irst, 6iven the factual findin6s of the courts below, we conclude that petitioner anF of America has acted merel as

a notifying ban3and did not assume the responsibilit of a confir)ing ban3? and)econd, petitioner banF, as a negotiating ban3, is entitled to recover on nter"esin:s partial availment as beneficiar of the

letter of credit which has been disowned b the alle6ed issuer banF.

#o ud6ment of civil liabilit a6ainst the other defendants, rancisco Traano and other unidentified parties, can be made,

in this instance, there bein6 no sufficient evidence to warrant an such findin6.

E-("('"(, the assailed decision is )(T A)D(, and respondent nter"esin ndustrial Corporation is ordered to refund to

petitioner anF of America #T I )A the amount of 41%,219,%9.2% with le6al interest from the filin6 of the complaint until

full paid.

#o costs.

)' '"D("(D.


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G.R. No. 11792 *u+y 23, 1994

AON DA!E GARMENT$, INC., petitioner,

vs.

NATIONA! !A#OR RE!ATION$ COMMI$$ION, !I!IA DUMANTA&, ET A!., respondents.

" ( ) ' + 0 T ' #

FRANCI$CO,J.:

This special civil action for certiorariseeFs to set aside the decision of the #ational +abor "elations Commission, dated

Au6ust 1, 1993, in #+"C CA %%%$89, for alle6edl havin6 been rendered with 6rave abuse of discretion.

4rivate respondents were emploees of petitioner Avon Dale !arments, nc. and its predecessorininterest, Avon Dale

)hirt actor. ollowin6 a dispute brou6ht about b the rotation of worFers, a compromise a6reement was entered into

between petitioner and private respondents wherein the latter were terminated from service and 6iven their

correspondin6 separation pa.

-owever, upon refusal of the petitioner to include in the computation of private respondents: separation pa the period

durin6 which the latter were emploed b Avon Dale )hirt actor, private respondents filed a complaint with the labor

arbiter claimin6 a deficienc in their separation pa >docFeted as #+"C#C"%%%2%%81%9@. Accordin6 to private

respondents, their previous emploment with petitioner:s predecessorininterest, Avon Dale )hirt actor, should be

credited in computin6 their separation pa considerin6 that Avon Dale )hirt factor was not dissolved and the were not in

turn hired as new emploees b Avon Dale !arments, nc.

n its decision dated a 13, 199, the labor arbiter dismissed private respondents: complaint and held that Avon Dale

)hirt actor and Avon Dale !arments, nc. are not one and the same entit as the former was in fact dissolved on

December 27, 1978, when it filed its Articles of Dissolution with the )ecurities and (


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Thus, conformabl with established urisprudence, the two entities cannot be deemed as separate and distinct where

there is a showin6 that one is merel the continuation of the other. 7n fact, even a chan6e in the corporate name does

not maFe a new corporation, whether effected b a special act or under a 6eneral law, it has no effect on the identit of

the corporation, or on its propert, ri6hts, or liabilities. 8"espondent #+"C therefore, did not commit an 6rave abuse of

discretion in holdin6 that petitioner should liFewise include private respondents: emploment with Avon Dale )hirt actor

in computin6 private respondents: separation pa as petitioner failed to substantiate its claim that it is a distinct entit.

ACC'"D#!+*, the instant petition is hereb D)))(D.

)' '"D("(D.

:G.R. No. 1387. May 29, 199;

CONCEPT #UI!DER$, INC.,petitioner, vs. THE NATIONA! !A#OR RE!ATION$ COMMI$$ION, =on?@ an Norber)o

Marabe, Roo+o Raue+, Cr=)oba+ ReBo, Manue+ G++eBo, Pa+5rono Gu5o=, Pero AboBar, Norber)o

Co(enaor, RoBe++o $a+u), E(+o Gar5a, *r., Marano Ro, Pau+na #a=ea, Areo A+bera, Pau)o $a+u),

Do(nBo Guarno, Ro(eo Ga+>e, Do(naor $abna, Fe+/e Raana, Ga>no $ua+bo, Moreno E=5are=,

Fernan Torre=, Fe+/e #a=+an, an Ruben Roba+o=, respondents.

D E C I $ I O N

HERMO$I$IMA, *R.,J.:

The corporate masF ma be lifted and the corporate veil ma be pierced when a corporation is ust but the alter e6o

of a person or of another corporation. Ehere bad6es of fraud e


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'n December 19, 1983, the +abor Arbiter rendered ud6ment 1orderin6 petitioner to reinstate private respondents

and to pa them bacF wa6es e;uivalent to one ear or three hundred worFin6 das.

'n #ovember 27, $%&'# the #ational +abor "elations Commission >#+"C@ dismissed the motion for reconsideration

filed b petitioner on the 6round that the said decision had alread become final and e-44@ and not b respondent?

2. +ev was made upon personal properties he found in the premises?

. )ecurit 6uards with hi6hpowered 6uns prevented him from removin6 the properties he had levied upon.3

The said special sheriff recommended that a QbreaFopen orderR be issued to enable him to enter petitionerPs

premises so that he could proceed with the public auction sale of the aforesaid personal properties on #ovember 7, 1989.

'n #ovember $, 1989, a certain Dennis Cue6Fen6 filed a thirdpart claim with the +abor Arbiter alle6in6 that the

properties sou6ht to be levied upon b the sheriff were owned b -dro >4hils.@, nc. >-44@ of which he is the ice

4resident.

'n #ovember 2, 1989, private respondents filed a Qotion for ssuance of a reaF'pen 'rder,R alle6in6 that -44

and petitioner corporation were owned b the same incorporatorS stocFholders. The also alle6ed that petitioner

temporaril suspended its business operations in order to evade its le6al obli6ations to them and that private respondents

were willin6 to post an indemnit bond to answer for an dama6es which petitioner and -44 ma suffer because of the

issuance of the breaFopen order.

n support of their claim a6ainst -44, private respondents presented dul certified copies of the !eneral

nformations )heet, dateda 1, 1987, submitted b petitioner to the )ecurities and ()(C@ and the

!eneral nformation )heet, dated a$'# 1987, submitted b -44 to the )ecurities and (


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#ame of )tocFholder Amount )ubscribed

-44 4$,999,%%.%%

Antonio E. +im 2,9%%,%%%.%%

Dennis ). Cue6Fen6 %%.%%

(lisa C. +im 1%%,%%%.%%

Teodulo ". Dino 1%%.%%

ir6ilio '. Casino 1%%.%%

2. oard of Directors

Antonio E. +im Chairman

Dennis ). Cue6Fen6 ember

(lisa C. +im ember

Teodulo ". Dino ember

ir6ilio '. Casino ember

. Corporate 'fficers

Antonio E. +im 4resident

Dennis ). Cue6Fen6 Assistant to the 4resident

(lisa %. +im Treasurer

ir6ilio '. Casino Corporate )ecretar

3. 4rincipal 'ffice

asan "oad

alenBuela, etro anila.R

'n the other hand, the !eneral nformation )heet of -44 revealed the followin6=

Q 1. reaFdown of )ubscribed Capital

#ame of )tocFholder Amount )ubscribed

Antonio E. +im 43%%,%%%.%%

(lisa C. +im 7,7%%.%%

AE+ Tradin6 3,%%%.%%

Dennis ). Cue6Fen6 3%,1%%.%%

Teodulo ". Dino 1%%.%%

ir6ilio '. Casino 1%%.%%

2. oard of Directors

Antonio E. +im Chairman

(lisa C. +im ember

Dennis ). Cue6Fen6 ember

ir6ilio '. Casino ember

Teodulo ". Dino ember

. Corporate 'fficers
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Antonio E. +im 4resident

Dennis ). Cue6Fen6 Assistant to the 4resident

(lisa '. +im Treasurer

ir6ilio '. Casino Corporate )ecretar

3. 4rincipal 'ffice

asan "oad, alenBuela, etro anila.R$

'n ebruar 1, 199%, -44 filed an 'pposition to private respondentsP motion for issuance of a breaFopen order,

contendin6 that -44 is a corporation which is separate and distinct from petitioner. -44 also alle6ed that the two

corporations are en6a6ed in two different Finds of businesses, i.e., -44 is a manufacturin6 firm while petitioner was then

en6a6ed in construction.

'n arch 2, 199%, the +abor Arbiter issued an 'rder which denied private respondentsP motion for breaFopen order.

4rivate respondents then appealed to the #+"C. 'n April 2, 1992, the #+"C set aside the order of the +abor Arbiter,

issued a breaFopen order and directed private respondents to file a bond. Thereafter, it directed the sheriff to proceed

with the auction sale of the properties alread levied upon. t dismissed the thirdpart claim for lacF of merit.

4etitioner moved for reconsideration but the motion was denied b the #+"C in a "esolution, dated December ,

1992.

-ence, the resort to the present petition.

4etitioner alle6es that the #+"C committed 6rave abuse of discretion when it ordered the e


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The )(C en banc e


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PANGANI#AN,J.

n the absence of a formal deed of sale, ma commitments 6iven b banF officers in an e4,%%,%%%.%%@ 4esos?

Q2. 'rderin6 defendant 4roducers anF of the 4hilippines, upon finalit of this decision and receipt from the plaintiffs theamount of 4. illion, to e$@ parcels

of land, and to immediatel deliver to the plaintiffs the ownerPs copies of T.C.T. #os. T1%$92 to T1%$97, inclusive, for

purposes of re6istration of the same deed and transfer of the si< >$@ titles in the names of the plaintiffs?

Q. 'rderin6 the defendants, ointl and severall, to pa plaintiffs /ose A. /anolo and Demetrio Demetria the sums of 4

2%%,%%%.%% each in moral dama6es?

Q3. 'rderin6 the defendants, ointl and severall, to pa plaintiffs the sum of 4 1%%,%%%.%% as e


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T0e Par)e=

4etitioner irst 4hilippine nternational anF >formerl 4roducers anF of the 4hilippines? petitioner anF, for brevit@

is a banFin6 institution or6aniBed and epetitioner "ivera, for brevit@ is of le6al a6e and was, at all times material to this case, -ead ana6er of the 4ropert

ana6ement Department of the petitioner anF.

"espondent Carlos (ercito >respondent (ercito, for brevit@ is of le6al a6e and is the assi6nee of ori6inal plaintiffs

appellees Demetrio Demetria and /ose /anolo.

"espondent Court of Appeals is the court which issued the Decision and "esolution sou6ht to be set aside throu6h

this petition.

T0e Fa5)=

The facts of this case are summariBed in the respondent CourtPs Decision,JKas follows=

Q>1@ n the course of its banFin6 operations, the defendant 4roducer anF of the 4hilippines ac;uired si< parcels of land

with a total area of 1%1 hectares located at Don /ose, )ta. "osa, +a6una, and covered b Transfer Certificates of Title #os. T

1%$92 to T1%$97. The propert used to be owned b *( nvestment and Development Corporation which had them

mort6a6ed with the banF as collateral fora loan. The ori6inal plaintiffs, Demetrio Demetria and /ose '. /anolo, wanted to

purchase the propert and thus initiated ne6otiations for that purpose.

Q>2@ n the earl part of Au6ust 1987 said plaintiffs, upon the su66estion of *( nvestmentPs le6al counsel, /ose aardo,

met with defendant ercurio "ivera, ana6er of the 4ropert ana6ement Department of the defendant banF. The

meetin6 was held pursuant to plaintiffsP plan to bu the propert >T)# of /an. 1$, 199%, pp. 71%@. After the meetin6,

plaintiff /anolo, followin6 the advice of defendant "ivera, made a formal purchase offer to the banF throu6h a letter

dated Au6ust %, 1987 >(


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Kindly contact )e at 4elep!one 7u)ber %*$-$9,,.

Q>@ 'n )eptember 1, 1987, defendant "ivera made on behalf of the banF a formal repl b letter which is hereunder

;uoted >((


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AttentionH Atty. De)etrio De)etria

Dear (irH

Nour proposal to buy t!e properties t!e ban3 foreclosed fro) 5y)e Invest)ent 0orp. located at (ta. Rosa# Laguna is under

study yet as of t!is ti)e by t!e newly created co))ittee for sub)ission to t!e newly designated Acting 0onservator of t!e

ban3.

1or your infor)ation.

Q>7@ Ehat thereafter transpired was a series of demands b the plaintiffs for compliance b the banF with what plaintiff

considered as a perfected contract of sale, which demands were in one form or another refused b the banF. As detailed

b the trial court in its decision, on #ovember 17, 1987, plaintiffs throu6h a letter to defendant "ivera >(our@ perfected sale a6reement.R Defendants refused to

receive both the pament and the letter. nstead, the parcels of land involved in the transaction were advertised b the

banF for sale to an interested buer >(8@ Defendant banF, throu6h defendant "ivera, acFnowled6ed receipt of the fore6oin6 letter and stated, in its

communication of December 2, 1987 >(


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I.

QThe findin6s and conclusions of the Court of Appeals do not conform to the evidence on record.R

'n the other hand, private respondents praed for dismissal of the instant suit on the 6roundJ8Kthat=

I.

Q4etitioners have en6a6ed in forum shoppin6.

II.

QThe factual findin6s and conclusions of the Court of Appeals are supported b the evidence on record and ma no lon6er

be ;uestioned in this case.

III.

QThe Court of Appeals correctl held that there was a perfected contract between Demetria and /anolo >substituted b

respondent (ercito@ and the banF.

I.

QThe Court of Appeals has correctl held that the conservator, apart from bein6 estopped from repudiatin6 the a6enc and

the contract, has no authorit to revoFe the contract of sale.R

T0e I==ue=

rom the fore6oin6 positions of the parties, the issues in this case ma be summed up as follows=

1@ Eas there forumshoppin6 on the part of petitioner anFN

2@ Eas there a perfected contract of sale between the partiesN

@ Assumin6 there was, was the said contract enforceable under the statute of fraudsN

3@ Did the banF conservator have the unilateral power to repudiate the authorit of the banF officers andGor to

revoFe the said contractN

@ Did the respondent Court commit an reversible error in its findin6s of factsN

T0e Fr=) I==ue a= T0ere Foru(%$0o//nB

n order to prevent the ve,@ the pendenc of Civil

Case #o. 921$%$ before the "e6ional Trial Court of aFati, ranch 13, involvin6 a derivativesuit filed b stocFholders of
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petitioner anF a6ainst the conservator and other defendants but which is the subect of a pendin6 otion to Dismiss

Eithout 4reudice.RJ9K

4rivate respondent (ercito vi6orousl ar6ues that in spite of this verification, petitioners are 6uilt of actual forum

shoppin6 because the instant petition pendin6 before this Court involves Qidentical parties or interests represented, ri6hts

asserted and reliefs sou6ht >as that@ currentl pendin6 before the "e6ional Trial Court, aFati ranch 13 in the )econd

Case. n fact, the issues in the two cases are so intertwined that a ud6ment or resolution in either case will constitute res

;udicatain the other.RJ1%K

'n the other hand, petitioners eassumin6 the anF is the real part in interest in a derivative suit@, it was the plaintiff?

2@ QThe derivative suit is not properl a suit for and in behalf of the corporation under the circumstancesR?

@ Althou6h the C("TCAT'#G("CAT'# >supra@ si6ned b the anF president and attached to the 4etition identifies

the action as a Qderivative suit,R it Qdoes not mean that it is oneR and Q>t@hat is a le6al ;uestion for the courts to decideR?

3@ 4etitioners did not hide the )econd Case as the mentioned it in the said ("CAT'#GC("TCAT'#.

Ee rule for private respondent.

To be6in with, forumshoppin6 ori6inated as a concept in private international law, J12K where nonresident liti6ants

are 6iven the option to choose the forum or place wherein to brin6 their suit for various reasons or esic@ conflictin6 adudications amon6 different courts and conse;uent confusion

enimical >sic@ to an orderl administration of ustice. t had created e


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Ehat therefore ori6inall started both in conflicts of laws and in our domestic law as a le6itimate device for solvin6

problems has been abused and misused to assure schemin6 liti6ants of dubious reliefs.

To avoid or minimiBe this unethical practice of subvertin6 ustice, the )upreme Court, as alread mentioned,

promul6ated Circular 2891. And even before that, the Court had proscribed it in the nterim "ules and !uidelines issued

on /anuar 11, 198 and had strucF down in several casesJ1$Kthe inveterate use of this insidious malpractice. orum

shoppin6 as Qthe filin6 of repetitious suits in different courtsR has been condemned b /ustice Andres ". #arvasa >now

Chief /ustice@ in inister of #atural "esources, et al. vs. -eirs of 'rval -u6hes, et al., Qas a reprehensible manipulation ofcourt processes and proceedin6s < < other than b appeal or certiorari@ in another. The principle applies not onl with respect to suits filed in the courts but

also in connection with liti6ations commenced in the courts while an administrative proceedin6 is pendin6, as in this case,

in order to defeat administrative processes and in anticipation of an unfavorable administrative rulin6 and a favorable

court rulin6. This is speciall so, as in this case, where the court in which the second suit was brou6ht, has no urisdiction

QJ18K

The test for determinin6 whether a part violated the rule a6ainst forumshoppin6 has been laid down in the 198$

case of uan vs. +opeB,J19Kalso b Chief /ustice #arvasa, and that is, forumshoppin6 e


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Qn the attempt to maFe the two actions appear to be different, petitioner impleaded different respondents therein 4#'C

in the case before the lower court and the C'A in the case before this Court and sou6ht what seems to be different reliefs.

4etitioner asFs this Court to set aside the ;uestioned letterdirective of the C'A dated 'ctober 1%, 1988 and to direct said

bod to approve the emorandum of A6reement entered into b and between the 4#'C and petitioner, while in the

complaint before the lower court petitioner seeFs to enoin the 4#'C from conductin6 a rebiddin6 and from sellin6 to

other parties the vessel QTGT Andres onifacio,R and for an e>italics supplied@

n an earlier case,J2Kbut with the same lo6ic and vi6or, we held=

Qn other words, the filin6 b the petitioners of the instant special civil action for certiorariand prohibition in this Court

despite the pendenc of their action in the aFati "e6ional Trial Court, is a species of forumshoppin6. oth actions

un;uestionabl involve the same transactions, the same essential facts and circumstances. The petitionersP claim of

absence of identit simpl because the 4C!! had not been impleaded in the "TC suit, and the suit did not involve certain

acts which transpired after its commencement, is specious. n the "TC action, as in the action before this Court, the validit

of the contract to purchase and sell of )eptember 1, 198$, i.e., whether or not it had been efficaciousl rescinded, and the

propriet of implementin6 the same >b pain6 the pled6ee banFs the amount of their loans, obtainin6 the release of the

pled6ed shares, etc.@ were the basic issues. )o, too, the relief was the same= the prevention of such implementation andGor

the restoration of the status uo ante. Ehen the acts sou6ht to be restrained tooF place anwa despite the issuance bthe Trial Court of a temporar restrainin6 order, the "TC suit did not become functus oflcio. t remained an effective vehicle

for obtention of relief? and petitionersP remed in the premises was plain and patent= the filin6 of an amended and

supplemental pleadin6 in the "TC suit, so as to include the 4C!! as defendant and seeF nullification of the acts sou6ht to

be enoined but nonetheless done. The remed was certainl not the institution of another action in another forum based

on essentiall the same facts. The adoption of this latter recourse renders the petitioners amenable to disciplinar action

and both their actions, in this Court as well as in the Court a uo, dismissible.R

n the instant case before us, there is also identit of parties, or at least, of interests represented. Althou6h the

plaintiffs in the )econd Case >-enr +. Co. et al.@ are not name parties in the irst Case, the represent the same interest

and entit, namel, petitioner anF, because=

1irstly, the are not suin6 in their personal capacities, for the have no direct personal interest in the matter in controvers.

The are not principall or even subsidiaril liable? much less are the direct parties in the assailed contract of sale? and

(econdly, the alle6ations of the complaint in the )econd Case show that the stocFholders are brin6in6 a Qderivative suit.R n

the caption itself, petitioners claim to have brou6ht suit Qfor and in behalf of the 4roducers anF of

the 4hilippines.RJ23Kndeed, this is the ver essence of a derivative suit=

QAn individual stocFholder is permitted to institute a derivative suit on behalf of the corporation wherein he holds stocF in

order to protect or vindicate corporate ri6hts, whenever the officials of the corporation refuse to sue, or are the ones to be

sued or hold the control of the corporation. n such actions, the suin6 stocFholder is re6arded as a nominal part, with the

corporation as the real part in interest. >!amboa v. ictoriano, 9% )C"A 3%, 37 J1979K? italics supplied@.

n the face of the dama6in6 admissions taFen from the complaint in the )econd Case, petitioners, ;uite stran6el,

sou6ht to den that the )econd Case was a derivative suit, reasonin6 that it was brou6ht, not b the minorit shareholders,

but b -enr Co et al., who not onl own, hold or control over 8% of the outstandin6 capital stocF, but also constitute the

maorit in the oard of Directors of petitioner anF. That bein6 so, then the reall represent the anF. )o, whether the

sued QderivativelR or directl, there is undeniabl an identit of interestsGentit represented.

4etitioner also tried to seeF refu6e in the corporate fiction that the personalit of the anF is separate and distinct

from its shareholders. ut the rulin6s of this Court are consistent= QEhen the fiction is ur6ed as a means of perpetratin6 a

fraud or an ille6al act or as a vehicle for the evasion of an e


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n addition to the man casesJ2$K where the corporate fiction has been disre6arded, we now add the instant case,

and declare herewith that the corporate veil cannot be used to shield an otherwise blatant violation of the prohibition

a6ainst forumshoppin6. )hareholders, whether suin6 as the maorit in direct actions or as the minorit in a derivative

suit, cannot be allowed to trifle with court processes, particularl where, as in this case, the corporation itself has not been

remiss in vi6orousl prosecutin6 or defendin6 corporate causes and in usin6 and applin6 remedies available to it. To rule

otherwise would be to encoura6e corporate liti6ants to use their shareholders as fronts to circumvent the strin6ent rules

a6ainst forum shoppin6.

inall, petitioner anF ar6ued that there cannot be an forum shoppin6, even assumin6 arguendothat there is

identit of parties, causes of action and reliefs sou6ht, Qbecause it >the anF@ was the defendant in the >first@ case while it

was the plaintiff in the other >)econd Case@,R citin6 as authorit ictronics 0o)puters# Inc. vs. Regional 4rial 0ourt# 5ranc!

F9# a3ati# etc. et al.,J27Kwhere the Court held=

QThe rule has not been eand particularl-enr Co, et al.@ as liti6ants are admonished to strictl follow the rules a6ainst forumshoppin6 and not to trifle with court

proceedin6s and processes. The are warned that a repetition of the same will be dealt with more severel.

-avin6 said that, let it be emphasiBed that this petition should be dismissed not merel because of forumshoppin6

but also because of the substantive issues raised, as will be discussed shortl.

T0e $e5on I==ue Was The Contract Perfected?
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The respondent Court correctl treated the ;uestion of whether or not there was, on the basis of the facts

established, a perfected contract of sale as the ultimate issue. -oldin6 that a valid contract has been established,

respondent Court stated=

QThere is no dispute that the obect of the transaction is that propert owned b the defendant banF as ac;uired assets

consistin6 of si< >$@ parcels of land specificall identified under Transfer Certificates of Title #os. T1%$92 to T1%$97. t is

liFewise beond cavil that the banF intended to sell the propert. As testified to b the anFPs Deput Conservator, /ose

(ntereso, the banF was looFin6 for buers of the propert. t is definite that the plaintiffs wanted to purchase the propert

and it was precisel for this purpose that the met with defendant "ivera, ana6er of the 4ropert ana6ementDepartment of the defendant banF, in earl Au6ust 1987. The procedure in the sale of ac;uired assets as well as the nature

and scope of the authorit of "ivera on the matter is clearl delineated in the testimon of "ivera himself, which testimon

was relied upon b both the banF and b "ivera in their appeal briefs. Thus >T)# of /ul %, 199%. pp. 192%@=

A= The procedure runs this wa= Ac;uired assets was turned over to me and then published it in the form of an

interoffice memorandum distributed to all branches that these are ac;uired assets for sale. was instructed to advertise

ac;uired assets for sale so on that basis, have to entertain offer? to accept offer, formal offer and upon havin6 been

offered, present it to the Committee. provide the Committee with necessar information about the propert such as

ori6inal loan of the borrower, bid price durin6 the foreclosure, total claim of the banF, the appraised value at the time the

propert is bein6 offered for sale and then the information which are relative to the evaluation of the banF to bu which

the Committee considers and it is the Committee that evaluate as a6ainst the eT)# of a 1, 199%, pp. 2728@=

H= Ehen ou went to the 4roducers anF and talFed with r. ercurio "ivera, did ou asF him pointblanF his

authorit to sell an propertN

A= #o, sir. #ot point blanF althou6h it came from him. >E@hen asFed him how lon6 it would taFe because he

was sain6 that the matter of pricin6 will be passed upon b the committee. And when asFed him how

lon6 it will taFe for the committee to decide and he said the committee meets ever weeF. f am not

mistaFen Eednesda and in about two weeFPs >sic@ time, in effect what he was sain6 he was not the one

who was to decide. ut he would refer it to the committee and he would rela the decision of the

committee to me.

H= 4lease answer the ;uestion.

A= -e did not sa that he had the authorit>.@ ut he said he would refer the matter to the committee and he

would rela the decision to me and he did ust liFe that.

Q4arentheticall, the Committee referred to was the 4ast Due Committee of which +uis Co was the -ead, with /ose(ntereso as one of the members.

QEhat transpired after the meetin6 of earl Au6ust 1987 are consistent with the authorit and the duties of "ivera and the

banFPs internal procedure in the matter of the sale of banFPs assets. As advised b "ivera, the plaintiffs made a formal offer

b a letter dated Au6ust 2%, 1987 statin6 that the would bu at the price of 4. illion in cash. The letter was for the

attention of ercurio "ivera who was tasFed to conve and accept such offers. Considerin6 an aspect of the official dut of

"ivera as some sort of intermediar between the plaintiffsbuers with their proposed buin6 price on one hand, and the

banF Committee, the Conservator and ultimatel the banF itself with the set price on the other, and considerin6 further

the discussion of price at the meetin6 of Au6ust resultin6 in a formal offer of 4. illion in cash, there can be no other

lo6ical conclusion than that when, on )eptember 1, 1987, "ivera informed plaintiffs b letter that Qthe banFPs counteroffer


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is at 4. illion for more than 1%1 hectares on lot basis,R such counteroffer price had been determined b the 4ast Due

Committee and approved b the Conservator after "ivera had dul presented plaintiffsP offer for discussion b the

Committee of such matters as ori6inal loan of borrower, bid price durin6 foreclosure, total claim of the banF, and marFet

value. Tersel put, under the established facts, the price of 4. illion was, as clearl worded in "iveraPs letter >(1@ Consent of

the contractin6 parties? >2@ 'bect certain which is the subect matter of the contract? >@ Cause of the obli6ation which

is established.R

There is no dispute on re;uisite no. 2. The obect of the ;uestioned contract consists of the si< >$@ parcels of land in

)ta. "osa, +a6una with an a66re6ate area of about 1%1 hectares, more or less, and covered b Transfer Certificates of Title

#os. T1%$92 to T1%$97. There is, however, a dispute on the first and third re;uisites.

4etitioners alle6e that Qthere is no counteroffer made b the anF, and an supposed counteroffer which "ivera >or

Co@ ma have made is unauthoriBed. )ince there was no counteroffer b the anF, there was nothin6 for (ercito >in

substitution of Demetria and /anolo@ to accept.RJ%K The disputed the factual basis of the respondent CourtPs findin6s that

there was an offer made b /anolo for 4. million, to which the anF counteroffered 4. million. Ee have perused the

evidence but cannot find fault with the said CourtPs findin6s of fact. eril, in a petition under "ule 3 such as this, errors of

fact if there be an are, as a rule, not reviewable. The mere fact that respondent Court >and the trial court as well@ chose

to believe the evidence presented b respondent more than that presented b petitioners is not b itself a reversible error.

in fact, such findin6s merit serious consideration b this Court, particularl where, as in this case, said courts carefull and

meticulousl discussed their findin6s. This is basic.

e that as it ma, and in additionto the fore6oin6 dis;uisitions b the Court of Appeals, let us review the ;uestion of

"iveraPs authorit to act and petitionerPs alle6ations that the 4. million counteroffer was ecitin6 #ational ood Authorit vs. ntermediate Appellate Court, 183 )C"A
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1$$@.

QA banF is liable for wron6ful acts of its officers done in the interests of the banF or in the course of dealin6s of the officers

in their representative capacit but not for acts outside the scope of their authorit >9 C./.)., p. 317@. A banF holdin6 out its

officers and a6ents as worth of confidence will not be permitted to profit b the frauds the ma thus be enabled to

perpetrate in the apparent scope of their emploment? nor will it be permitted to shirF its responsibilit for such frauds,

even thou6h no benefit ma accrue to the banF therefrom >1% Am /ur 2d, p. 113@. Accordin6l, a banFin6 corporation is

liable to innocent third persons where the representation is made in the course of its business b an a6ent actin6 within

the 6eneral scope of his authorit even thou6h, in the particular case, the a6ent is secretl abusin6 his authorit andattemptin6 to perpetrate a fraud upon his principal or some other person, for his own ultimate benefit >cntosh v. DaFota

Trust Co., 2 #D 72, 2%3 #E 818, 3% A+" 1%21@.

QApplication of these principles is especiall necessar because banFs have a fiduciar relationship with the public and

their stabilit depends on the confidence of the people in their honest and efficienc. )uch faith will be eroded where

banFs do not eT)#, April

2$, 199%, pp. 1$17@?

>c@ "ivera received the buersP letter dated Au6ust %, 1987 offerin6 4. million >T)#, % /ul 199%, p. 11@?

>d@ "ivera si6ned the letter dated )eptember 1, 1987 offerin6 to sell the propert for 4. million >T)#, /ul %, p. 11@?

>e@ "ivera received the letter dated )eptember 17, 1987 containin6 the buersP proposal to bu the propert for 43.2

million >T)#, /ul %, 199%, p. 12@?

>f@ "ivera, in a telephone conversation, confirmed that the 4. million was the final price of the anF >T)#, /anuar 1$,

199%, p. 18@?>6@ "ivera arran6ed the meetin6 between the buers and +uis Co on )eptember 28, 1987, durin6 which the anFPs offer

of 4. million was confirmed b "ivera >T)#, April 2$, 199%, pp. 3@. At said meetin6, Co, a maor shareholder and

officer of the anF, confirmed "iveraPs statement as to the finalit of the anFPs counteroffer of 4. million >T)#, /anuar

1$, 199%, p. 21? T)#, April 2$, 199%, p. @?

>h@ n its newspaper advertisements and announcements, the anF referred to "ivera as the officer actin6 for the anF in

relation to parties interested in buin6 assets ownedGac;uired b the anF. n fact, "ivera was the officer mentioned in the

anFPs advertisements offerin6 for sale the propert in ;uestion >cf. (


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Court of Appeals in its Decision >p. 12@ had alread made a factual findin6 that the buers had no notice of "iveraPs actual

authorit prior to the sale. n fact, the anF has not shown that the acted as its counsel in respect to an ac;uired assets?

on the other hand, respondent has proven that Demetria and /anolo merel associated with a loose a66rupation of

lawers >not a professional partnership@, one of whose members >Att. )usana 4arFer@ acted in said criminal cases.

4etitioners also alle6ed that DemetriaPs and /anoloPs 43.2 million counteroffer in the letter dated )eptember 17,

1987 eletter dated )eptember %,1987@ UacceptedP "iveraPs counter offer of 4. million under Anne< U/P >letter dated )eptember 17, 1987@,R citin6 the late

/ustice 4aras,JK Art. 119 of the Civil CodeJ$Kand related )upreme Court rulin6s startin6 with 5eau)ont vs. 6rieto.J7K

-owever, the abovecited authorities and precedents cannot appl in the instant case because, as found b the

respondent Court which reviewed the testimonies on this point, what was QacceptedR b /anolo in his letter dated

)eptember %, 1987 was the anFPs offer of 4. million as confirmed and reiterated to Demetria and Att. /ose aardo b

"ivera and Co durin6 their meetin6 on )eptember 28, 1987. #ote that the said letter of )eptember %, 1987 be6ins with

Q>p@ursuant to our discussion last 28 )eptember 1987 < < 7@ months after /anoloPs acceptance. )uch dela, and the absence of an circumstance which mi6ht have ustifiabl

prevented the anF from actin6 earlier, clearl characteriBes the repudiation as nothin6 more than a lastminute attempt

on the anFPs part to 6et out of a bindin6 contractual obli6ation.

TaFen to6ether, the factual findin6s of the respondent Court point to an implied admission on the part of the

petitioners that the written offer made on )eptember 1, 1987 was carried throu6h durin6 the meetin6 of )eptember 28,

1987. This is the conclusion consistent with human e


31/59

ut we passed upon the issue anwa, if onl to avoid decidin6 the case on purel procedural 6rounds, and we repeat that,

on the basis of the evidence alread in the record and as appreciated b the lower courts, the inevitable conclusion is

simpl that there was a perfected contract of sale.

T0e T0r I==ue Is the Contract Enforceable?

The petition alle6ed=J32K

Q(ven assumin6 that +uis Co or "ivera did rela a verbal offer to sell at 4. million durin6 the meetin6 of 28 )eptember

1987, and it was this verbal offer that Demetria and /anolo accepted with their letter of % )eptember 1987, the contract

produced thereb would be unenforceable b action there bein6 no note, memorandum or writin6 subscribed b the

anF to evidence such contract. >4lease see Article 13%J2K, Civil Code.@R

0pon the other hand, the respondent Court in its Decision >p. 13@ stated=

Q< < < 'f course, the banFPs letter of )eptember 1, 1987 on the official price and the plaintiffsP acceptance of the price on

)eptember %, 1987, are not, in themselves, formal contracts of sale. The are however clear embodiments of the fact that

a contract of sale was perfected between the parties, such contract bein6 bindin6 in whatever form it ma have beenentered into >case citations omitted@. )tated simpl, the banFsP letter of )eptember 1, 1987, taFen to6ether with plaintiffsP

letter dated )eptember %, 1987, constitute in law a sufficient memorandum of a perfected contract of sale.R

The respondent Court could have added that the written communications commenced not onl from )eptember 1,

1987 but from /anoloPs Au6ust 2%, 1987 letter. Ee a6ree that, taFen to6ether, these letters constitute sufficient

memoranda since the include the names of the parties, the terms and conditions of the contract, the price and a

description of the propert as the obect of the contract.

ut let it be assumed arguendothat the counteroffer durin6 the meetin6 on )eptember 28, 1987 did constitute a

QnewR offer which was accepted b /anolo on )eptember %, 1987. )till, the statute of frauds will not appl b reason of

the failure of petitioners to obect to oral testimon provin6 petitioner anFPs counteroffer of 4. million. -ence,

petitioners b such utter failure to obect are deemed to have waived an defects of the contract under the statute of

frauds, pursuant to Article 13% of the Civil Code=

QArt. 13%. Contracts infrin6in6 the )tatute of rauds, referred to in #o. 2 of Article 13%, are ratified b the failure to

obect to the presentation of oral evidence to prove the same, or b the acceptance of benefits under them.R

As private respondent pointed out in his emorandum, oral testimon on the reaffirmation of the counteroffer of

4. million is aplent and the silence of petitioners all throu6hout the presentation maFes the evidence bindin6 on them

thus=

A *es, sir. thinF it was )eptember 28, 1987 and was a6ain present because Att. Demetria told me to

accompan him and we were able to meet +uis Co at the anF.


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H Ehat do ou meanN

A That is the amount the want, sir.

H Ehat is the reaction of the plaintiff Demetria to +uis CoPs statment >sic@ that the defendant "iveraPs counter

offer of . million was the defendantPs banF >sic@ final offerN

A -e said in a da or two, he will maFe final acceptance, sir.

H Ehat is the response of r. +uis CoN

A -e said he will wait for the position of Att. Demetria, sir.

JDirect testimon of Att. /ose aardo, T)#, /anuar 1$, 199%, at pp. 1821.K

%

H Ehat transpired durin6 that meetin6 between ou and r. +uis Co of the defendant anFN

A Ee went strai6ht to the point because he bein6 a bus person, told him if the amount of 4. million couldstill be reduced and he said that was alread passed upon b the committee. Ehat the banF e


33/59

JDirect testimon of ercurio "ivera, T)#, % /ul 199%, pp. 131.K

T0e Four)0 I==ue May the Conservator Revoke

the Perfected and Enforceable Contract?

t is not disputed that the petitioner anF was under a conservator placed b the Central anF of

the 4hilippines durin6 the time that the ne6otiation and perfection of the contract of sale tooF place. 4etitionersener6eticall contended that the conservator has the power to revoFe or overrule actions of the mana6ement or the board

of directors of a banF, under )ection 28A of "epublic Act #o. 2$ >otherwise Fnown as the Central anF Act@ as follows=

QEhenever, on the basis of a report submitted b the appropriate supervisin6 or e


34/59

Our records do not s!ow t!at r. Rivera was aut!ori/ed by t!e old board or by any of t!e ban3 conservators starting

anuary# $%&,B to sell t!e aforesaid property to any of your clients. Apparently# w!at too3 place were ;ust preli)inary

discussionsC consultations between !i) and your clients# w!ic! everyone 3nows cannot bind t!e 5an3=s 5oard or

0onservator.

:e are# t!erefore# constrained to refuse any tender of pay)ent by your clients# as t!e sa)e is patently violative of

corporate and ban3ing laws. :e believe t!at t!is is )ore t!an sufficient legal ;ustification for refusing said alleged tender.

Rest assured t!at we !ave not!ing personal against your clients. All our acts are official# legal and in accordance wit! law.:e also !ave no personal interest in any of t!e properties of t!e 5an3.

6lease be advised accordingly.

ery truly yours#

(gd.B Leonida 4. Encarnacion

LEO7IDA 4. E70AR7A0IO7

Acting 0onservator>

n the third place, while admittedl, the Central anF law 6ives vast and farreachin6 powers to the conservator of a

banF, it must be pointed out that such powers must be related to the Q>preservation of@ the assets of the banF, >the

reor6aniBation of@ the mana6ement thereof and >the restoration of@ its viabilit.R )uch powers, enormous and e


35/59

abuse of discretion# suc! findings )ust stand# for t!is 0ourt is not expected or reuired to exa)ine or contrast t!e oral and

docu)entary evidence sub)itted by t!e parties=


36/59


37/59

values. To rule in favor of the anF simpl because the propert in ;uestion has al6ebraicall accelerated in price durin6

the lon6 period of liti6ation is to reward lawlessness and delas in the fulfillment of bindin6 contracts. Certainl, the Court

cannot stamp its imprimatur on such outra6eous proposition.

HEREFORE, findin6 no reversible error in the ;uestioned Decision and "esolution, the Court hereb D(#() the

petition. The assailed Decision is A"(D. oreover, petitioner anF is "(4"A#D(D for en6a6in6 in forumshoppin6

and EA"#(D that a repetition of the same or similar acts will be dealt with more severel. Costs a6ainst petitioners.

$O ORDERED.

:G.R. No. 133812. *une 24, 1999;

FRANCI$CO MOTOR$ CORPORATION,petitioner, vs. COURT OF APPEA!$ an $POU$E$ GREGORIO an !I#RADA

MANUE!, respondents.

$&NOP$I$

4etitioner rancisco otors Corporation filed a complaint for )um of one a6ainst private respondents spouses

!re6orio and +ibrada anuel for the balance of the eep bod purchased b them from the petitioner, the cost of repair of

the said vehicle and the costs of suit and attornePs fees. )pouses anuel filed their answer and interposed acounterclaim for unpaid le6al services b !re6orio anuel which was not faid b the incorporators, directors and officers

of the petitioner bein6 the members of the rancisco famil whom he represented in the intestate estate proceedin6s of

the late enita Trinidad at the time when he was still the Assistant +e6al 'fficer of the petitioner. The trial court decided

the case b 6rantin6 the claims of both sides. 'n appeal, the Court of Appeals affirmed the trial courtPs decision. -ence,

this petition.

The Court ruled that 6iven the facts and circumstances of this case, the doctrine of piercin6 the corporate veil has no

relevant application here. "espondent court erred in permittin6 the trial courtPs resort to this doctrine. The rationale

behind piercin6 a corporationPs identit in a 6iven case is to remove the barrier between the corporation from the persons

comprisin6 it to thwart the fraudulent and ille6al schemes of those who use the corporate personalit as a shield for

undertaFin6 certain proscribed activities. -owever, in the case at bar, instead of holdin6 certain individuals or persons

responsible for an alle6ed corporate act, the situation has been reversed. t is the petitioner as a corporation which isbein6 ordered to answer for the personal liabilit of certain individual directors, officers and incorporators concerned.

-ence, the doctrine had been turned upside down because of its erroneous invocation. #ote that accordin6 to private

respondent !re6orio anuel, his services were solicited as counsel for members of the rancisco famil to represent them

in the intestate proceedin6s over enita TrinidadPs estate. These estate proceedin6s did not involve an business of

petitioner.

-owever, with re6ard to the procedural issue raised b petitionerPs alle6ation, that it needed to be summoned anew

in order for the court to ac;uire urisdiction over it, the Court a6reed with respondent courtPs view to the contrar. )ection

3, "ule 11 of the Rules of 0ourt provides that a counterclaim or crossclaim must be answered within >1%@ das from

service. #othin6 in the "ules of Court sas that summons should first be served on the defendant before an answer to

counterclaim must be made. 0nder "ule 9, )ec. of the 1997 "ules of Civil 4rocedure if a defendant fails to answer the

counterclaim, then, upon plaintiffPs motion, the defendant ma be declared in default. This is what happened to petitioner

in this case and the Court found no procedural error in its disposition made b the appellate court.

The petition was !"A#T(D.

$&!!A#U$

1. COMMERCIA! !A@ CORPORATION@ PIERCING THE EI! OF CORPORATE ENTIT&@ EP!AINED. asic in corporation law

s the principle that a corporation has a separated personalit distinct from its stocFholders and from other

corporations. -owever, under the doctrine of piercin6 the veil of corporate entit, the corporationPs separate uridical


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personalit ma be disre6arded, when the corporate identit is used to defeat public convenience, ustif wron6,

protect fraud, or defend crime. Also, where the corporation is a mere alter e6o or business conduit of a person, or

where the corporation is so or6aniBed and controlled and its affairs are so conducted as to maFe it merel an

instrumentalit, a6enc, conduit or adunct of another corporation, then its distinct personalit ma be i6nored. n

these circumstances, the courts will treat the corporation as a mere a66rupation of persons and the liabilit will

directl attach to them. The le6al fiction of a separate corporate personalit in those cited instances, for reasons of

public polic and in the interest of ustice, will be ustifiable set aside.

2. ID.@ ID.@ ID.@ RATIONA!E. The rationale behind piercin6 a corporationPs identit to remove the barrier between the

corporation and the persons comprisin6 it, to thwart the fraudulent and ille6al schemes of those who use the

corporate personalit as a shield for undertaFin6 certain proscribed activities.

. ID.@ ID.@ ID.@ NOT APP!ICA#!E IN PRE$ENT CA$E . -owever, here, instead of holdin6 certain individuals or persons

responsible for an alle6ed corporate act, the situation has been reversed. t is the corporation which is bein6 ordered

to answer for the personal liabilities of certain individual directors, officers and incorporators concerned. The

doctrine has been turned upside down because of its erroneous invocation. Accordin6 to private respondent

!re6orio anuel his services were solicited as counsel for members of the rancisco famil to represent them in the

intestate proceedin6s over enita TrinidadPs estate. These estate proceedin6s did not involve an business of

petitioner.

. ID.@ ID.@ HA$ $EPARATE PER$ONA!IT& FROM IT$ INCORPORATOR$ . The personalit of the corporation and those of its

incorporators, directors and officers in their personal capacities ou6ht to be Fept separate. The claim for le6al fees

a6ainst the concerned individual incorporators, officers and directors could not be properl directed a6ainst the

corporation without violatin6 basic principles 6overnin6 corporations. oreover, ever action V includin6 a

counterclaim V must be prosecuted or defended in the name of the real partininterest. t is plainl an error to la

the claim for le6al fees of private respondent !re6orio anuel at the door of petitioner >C@ rather than individual

members of the rancisco famil.

4. REMEDIA! !A@ CII! PROCEDURE@ $UMMON$@ NOT NECE$$AR& IN COUNTERC!AIM. )ection 3, "ule 11 of the Rules

of 0ourtprovides that a counterclaim or crossclaim must be answered within ten >1%@ das from service. #othin6 in

the "ules of Court sas that summons should first be served on the defendant before an answer to counterclaim must

be made. The purpose of a summons is to enable the court to ac;uire urisdiction over the person of the defendant.

Althou6h a counterclaim is treated as an entirel distinct and independent action, the defendant in the counterclaim,

bein6 the plaintiff in the ori6inal complaint, has alread submitted to the urisdiction of the court.

D E C I $ I O N

UI$UM#ING,J.

This petition for review on certiorari, under "ule 3 of the "ules of Court, seeFs to annul the decision J1K of the Court

of Appeals in C.A. !.". C #o. 1%%13 affirmin6 the decision rendered b ranch 1, "e6ional Trial Court of aFati, etro

anila. The procedural antecedents of this petition are as follows=

'n /anuar 2, 198, petitioner filed a complaintJ2K a6ainst private respondents to recover three thousand four

hundred twelve and si< centavos >4,312.%$@, representin6 the balance of the eep bod purchased b the anuels from

petitioner? an additional sum of twent thousand four hundred fiftfour and ei6ht centavos >42%,33.8%@ representin6

the unpaid balance on the cost of repair of the vehicle? and si< thousand pesos >4$,%%%.%%@ for cost of suit and attornePs

fees.JKTo the ori6inal balance on the price of eep bod were added the costs of repair. J3K n their answer, private

respondents interposed a counterclaim for unpaid le6al services b !re6orio anuel in the amount of fift thousand pesos

>4%,%%%@ which was not paid b the incorporators, directors and officers of the petitioner. The trial court decided the case

on /une 2$, 198, in favor of petitioner in re6ard to the petitionerPs claim for mone, but also allowed the counterclaim of

private respondents. oth parties appealed. 'n April 1, 1991, the Court of Appeals sustained the trial courtPs decision.

JK-ence, the present petition.
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Q-owever, this distinct and separate personalit is merel a fiction created b law for convenience and to promote

ustice. Accordin6l, this separate personalit of the corporation ma be disre6arded, or the veil of corporate fiction

pierced, in cases where it is used as a cloaF or cover for found >sic@ ille6alit, or to worF an inustice, or where necessar to

achieve e;uit or when necessar for the protection of creditors. >)ulo n6 aan, nc. vs. Araneta, nc., 72 )C"A

37@ Corporations are composed of natural persons and the le6al fiction of a separate corporate personalit is not a shield

for the commission of inustice and ine;uit. >Chemple< 4hilippines, nc. vs. 4amatian, 7 )C"A 3%8@

Qn the instant case, evidence shows that the plaintiffappellant rancisco otors Corporation is composed of the heirs of

the late enita Trinidad as directors and incorporators for whom defendant !re6orio anuel rendered le6al services in theintestate estate case of their deceased mother. Considerin6 the aforestated principles and circumstances established in this

case, e;uit and ustice demands plaintiffappellantPs veil of corporate identit should be pierced and the defendant be

compensated for le6al services rendered to the heirs, who are directors of the plaintiffappellant corporation.RJ12K

#ow before us, petitioner assi6ns the followin6 errors=

QI.

T-( C'0"T ' A44(A+) (""(D # A44+*#! T-( D'CT"#( ' 4("C#! T-( (+ ' C'"4'"AT( (#TT*.

II.

T-( C'0"T ' A44(A+) (""(D # A"#! T-AT T-("( EA) /0")DCT'# '(" 4(TT'#(" ET- "()4(CT T' T-(C'0#T("C+A.RJ1K

4etitioner submits that respondent court should not have resorted to piercin6 the veil of corporate fiction because

the transaction concerned onl respondent !re6orio anuel and the heirs of the late enita Trinidad. Accordin6 to

petitioner, there was no cause of action b said respondent a6ainst petitioner? personal concerns of the heirs should be

distin6uished from those involvin6 corporate affairs. 4etitioner further contends that the present case does not fall amon6

the instances wherein the courts ma looF beond the distinct personalit of a corporation. Accordin6 to petitioner, the

services for which respondent !re6orio anuel seeFs to collect fees from petitioner are personal in nature. -ence, it

avers the heirs should have been sued in their personal capacit, and not involve the corporation.J13K

Eith re6ard to the permissive counterclaim, petitioner also insists that there was no proper service of the answer

containin6 the permissive counterclaim. t claims that the counterclaim is a separate case which can onl be properlserved upon the opposin6 part throu6h summons. urther petitioner states that b nature, a permissive counterclaim is

one which does not arise out of nor is necessaril connected with the subect of the opposin6 partPs claim. 4etitioner

avers that since there was no service of summons upon it with re6ard to the counterclaim, then the court did not ac;uire

urisdiction over petitioner. )ince a counterclaim is considered an action independent from the answer, accordin6 to

petitioner, then in effect there should be two simultaneous actions between the same parties= each part is at the same

time both plaintiff and defendant with respect to the other, J1K re;uirin6 in each case separate summonses.

n their Comment, private respondents focus on the two ;uestions raised b petitioner. The defend the propriet of

piercin6 the veil of corporate fiction, but den the necessit of servin6 separate summonses on petitioner in re6ard to their

permissive counterclaim contained in the answer.

4rivate respondents maintain both trial and appellate courts found that respondent !re6orio anuel was emploedas assistant le6al officer of petitioner corporation, and that his services were solicited b the incorporators, directors and

members to handle and represent them in )pecial 4roceedin6s #o. 78%, concernin6 the ntestate (state of the late enita

Trinidad. The assert that the members of petitioner corporation tooF advanta6e of their positions b not compensatin6

respondent !re6orio anuel after the termination of the estate proceedin6s despite his repeated demands for pament of

his services. The cite findin6s of the appellate court that support piercin6 the veil of corporate identit in this particular

case. The assert that the corporate veil ma be disre6arded when it is used to defeat public convenience, ustif wron6,

protect fraud, and defend crime. t ma also be pierced, accordin6 to them, where the corporate entit is bein6 used as an

alter e6o, adunct, or business conduit for the sole benefit of the stocFholders or of another corporate entit. n these

instances, the aver, the corporation should be treated merel as an association of individual persons.J1$K
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4rivate respondents dispute petitionerPs claim that its ri6ht to due process was violated when respondentsP

counterclaim was 6ranted due course, althou6h no summons was served upon it. The claim that no provision in the "ules

of Court re;uires service of summons upon a defendant in a counterclaim. 4rivate respondents ar6ue that when the

petitioner filed its complaint before the trial court it voluntaril submitted itself to the urisdiction of the court. As a

conse;uence, the issuance of summons on it was no lon6er necessar. 4rivate respondents sa the served a cop of their

answer with affirmative defenses and counterclaim on petitionerPs former counsel, #icanor !. AlvareB. Ehile petitioner

would have the Court believe that respondents served said cop upon AlvareB after he had withdrawn his appearance as

counsel for the petitioner, private respondents assert that this contention is utterl baseless. "ecords disclose that theanswer was received two >2@ das before the former counsel for petitioner withdrew his appearance, accordin6 to private

respondents. The maintain that the present petition is but a form of dilator appeal, to set off petitionerPs obli6ations to

the respondents b runnin6 up more interest it could recover from them. 4rivate respondents therefore claim dama6es

a6ainst petitioner.J17K

To resolve the issues in this case, we must first determine the propriet of piercin6 the veil of corporate fiction.

asic in corporation law is the principle that a corporation has a separate personalit distinct from its stocFholders

and from other corporations to which it ma be connected.J18K-owever, under the doctrine of piercin6 the veil of

corporate entit, the corporationPs separate uridical personalit ma be disre6arded, for e


42/59

ou6ht to be Fept separate in this case. The claim for le6al fees a6ainst the concerned individual incorporators, officers and

directors could not be properl directed a6ainst the corporation without violatin6 basic principles 6overnin6 corporations.

oreover, ever action Oincludin6 a counterclaim O must be prosecuted or defended in the name of the real part in

interest.J2%K t is plainl an error to la the claim for le6al fees of private respondent !re6orio anuel at the door of

petitioner >C@ rather than individual members of the rancisco famil.

-owever, with re6ard to the procedural issue raised b petitionerPs alle6ation, that it needed to be summoned anew

in order for the court to ac;uire urisdiction over it, we a6ree with respondent courtPs view to the contrar. )ection 3, "ule11 of the Rules of 0ourtprovides that a counterclaim or crossclaim must be answered within ten >1%@ das from

service. #othin6 in the "ules of Court sas that summons should first be served on the defendant before an answer to

counterclaim must be made. The purpose of a summons is to enable the court to ac;uire urisdiction over the person of

the defendant. Althou6h a counterclaim is treated as an entirel distinct and independent action, the defendant in the

counterclaim, bein6 the plaintiff in the ori6inal complaint, has alread submitted to the urisdiction of the court. ollowin6

"ule 9, )ection of the 1997 Rules of 0ivil 6rocedure,J21Kif a defendant >herein petitioner@ fails to answer the

counterclaim, then upon motion of plaintiff, the defendant ma be declared in default. This is what happened to

petitioner in this case, and this Court finds no procedural error in the disposition of the appellate court on this particular

issue. oreover, as noted b the respondent court, when petitioner filed its motion seeFin6 to set aside the order of

default, in effect it submitted itself to the urisdiction of the court. As well said b respondent court=

Qurther on the lacF of urisdiction as raised b plaintiffappellantJ,K JtKhe records show that upon its re;uest, plaintiff

appellant was 6ranted time to file a motion for reconsideration of the disputed decision. 4laintiffappellant did file itsmotion for reconsideration to set aside the order of default and the ud6ment rendered on the counterclaim.

QThus, even if the court ac;uired no urisdiction over plaintiffappellant on the counterclaim, as it vi6orousl insists,

plaintiffappellant is considered to have submitted to the courtPs urisdiction when it filed the motion for reconsideration

seeFin6 relief from the court. >)oriano vs. 4alacio, 12 )C"A 337@. A part is estopped from assailin6 the urisdiction of a

court after voluntaril submittin6 himself to its urisdiction. >Teones vs. !ironella, 19 )C"A 1%%@. (stoppel is a bar a6ainst

an claims of lacF of urisdiction. >alais vs. alais, 19 )C"A [email protected]

HEREFORE, the petition is hereb !"A#T(D and the assailed decision is hereb "((")(D insofar onl as it held

rancisco otors Corporation liable for the le6al obli6ation owin6 to private respondent !re6orio anuel? but this decision

is without preudice to his filin6 the proper suit a6ainst the concerned members of the rancisco famil in their personal

capacit. #o pronouncement as to costs.

$O ORDERED.

:G.R. No=. 1112%24. No>e(ber 22, 2333;

#I#IANO O. RE&NO$O, I,petitioner! vs. HON. COURT OF APPEA!$ an GENERA! CREDIT CORPORATION,respondents.

D E C I $ I O N

&NARE$%$ANTIAGO,J.

Assailed in this petition for review is the consolidated decision of the Court of Appeals dated /ul 7, 1993, which

reversed the separate decisions of the "e6ional Trial Court of 4asi6 Cit and the "e6ional Trial Court of HueBon Cit in two

cases between petitioner "enoso and respondent !eneral Credit Corporation >!CC@.

)ometime in the earl 19$%s, the Commercial Credit Corporation >hereinafter, QCCCR@, a financin6 and investment

firm, decided to or6aniBe franchise companies in different parts of the countr, wherein it shall hold thirt percent >%@

e;uit. (mploees of the CCC were desi6nated as resident mana6ers of the franchise companies. 4etitioner ibiano '.

"enoso, was desi6nated as the resident mana6er of the franchise compan in HueBon Cit, Fnown as the Commercial

Credit Corporation of HueBon Cit >hereinafter, QCCCHCR@.
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CCCHC entered into an e


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oth parties appealed to the then ntermediate Appellate Court. The appeal of Commercial Credit Corporation of

HueBon Cit was dismissed for failure to pa docFet fees. 4etitioner, on the other hand, withdrew his appeal.

-ence, the decision became final and, accordin6l, a Erit of (2@ petitions for certiorari with the Court of Appeals, docFeted as CA!.". )4 #o. 2718 J1Kand

CA!.". )4 #o. 27$8. These cases were later consolidated.

'n /ul 7, 1993, the Court of Appeals rendered a decision in the two consolidated cases, the dispositive portion of

which reads=E-("('"(, in )4 #o. 2718 we declare the issue of the respondent court:s refusal to issue a restrainin6 order as havin6

been rendered moot b our "esolution of 7 April 1992 which, b wa of inunctive relief, provided that &the respondents

and their representatives are hereb enoined from conductin6 an auction sale >on eupon@ and sellin6 on e


45/59

throu6h which the petitioner is made liable under the ud6ment in said Civil Case #o. H%8.

#o dama6es and no costs.

)' '"D("(D.J1$K

:G.R. No. 1121. May 3, 2331;

$IMEON DE !EONet al ) NATIONA! !A#OR RE!ATION$ COMMI$$ION


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4etitioners alle6ed that the were re6ular emploees of TC which was also usin6 the corporate names ortune

nte6rated )ervices, nc. and a6num nte6rated )ervices, nc. The were assi6ned to worF as securit 6uards at the

compan:s main factor plant, its tobacco redrin6 plant and warehouse. The averred that the performed their duties

under the control and supervision of TC:s securit supervisors. Their services, however, were severed in 'ctober 1991

without valid cause and without due process. 4etitioners claimed that their dismissal was part of respondents: desi6n to

bust their newlor6aniBed union which sou6ht to enforce their ri6hts under the +abor )tandards law.J1K

"espondent TC, on the other hand, maintained that there was no emploeremploee relationship between TC andpetitioners. t said that at the time of the termination of their services, petitioners were the emploees of ) which was

a separate and distinct corporation from TC. -ence, petitioners had no cause of action a6ainst TC.J2K

"espondent ), meanwhile, denied the char6e of ille6al dismissal and unfair labor practice. t ar6ued that

petitioners were not dismissed from service but were merel placed on floatin6 status pendin6 reassi6nment to other

posts. t alle6ed that the temporar displacement of petitioners was not due to its fault but was the result of the

pretermination b TC of the contract for securit services.JK

The +abor Arbiter found respondents liable for the char6es. "eectin6 TC:s ar6ument that there was no emploer

emploee relationship between TC and petitioners, he ruled that ) and TC should be considered as a sin6le

emploer. -e observed that the two corporations have common stocFholders and the share the same business

address. n addition, ) had no client other than TC and other corporations belon6in6 to the 6roup of companies ownedb +ucio Tan. The +abor Arbiter thus found respondents 6uilt of union bustin6 and ille6al dismissal. -e observed that not

lon6 after the stocFholders of ) sold all their stocFs to a new set of stocFholders, TC terminated the contract of securit

services and en6a6ed the services of two other securit a6encies. TC did not 6ive an reason for the termination of the

contract. The +abor Arbiter 6ave credence to petitioners: theor that respondents: precipitate termination of their

emploment was intended to bust their union. Conse;uentl, the +abor Arbiter ordered respondents to pa petitioners

their bacFwa6es and separation pa, to refund their cash bond deposit, and to pa attorne:s fees.J3K

'n appeal, the #+"C reversed and set aside the decision of the +abor Arbiter. irst, it held that the +abor Arbiter

erred in applin6 the &sin6le emploer& principle and concludin6 that there was an emploeremploee relationship

between TC and ) on one hand, and petitioners on the other hand. t found that at the time of the termination of the

contract of securit services on 'ctober 1, 1991, ) which, at that time, had been renamed a6num nte6rated

)ervices, nc. had a different set of stocFholders and officers from that of TC. The also had separate offices. The #+"C

held that the principle of &sin6le emploer& and the doctrine of piercin6 the corporate veil could not appl under the

circumstances. t further ruled that the pro


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compan premises. The records show that the two corporations had identical stocFholders and the same business

address. ) also had no other clients e


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D E C I $ I O N

PANGANI#AN,J.

asic is the rule that a corporation has a le6al personalit distinct and separate from the persons and entities ownin6

it. The corporate veil ma be lifted onl if it has been used to shield fraud, defend crime, ustif a wron6, defeat public

convenience, insulate bad faith or perpetuate inustice. Thus, the mere fact that the 4hilippine #ational anF >4#@

ac;uired ownership or mana6ement of some assets of the 4ampan6a )u6ar ill >4A)0+@, which had earlier been

foreclosed and purchased at the resultin6 public auction b the Development anF of the 4hilippines >D4@, will not maFe

4# liable for the 4A)0+Ps contractual debts to respondent.

$)a)e(en) o )0e Ca=e

efore us is a 4etition for "eview assailin6 the April 17, 2%%% DecisionJ1Kof the Court of Appeals >CA@ in CA!" C #o.

7$1%. The decretal portion of the challen6ed Decision reads as follows=

QE-("('"(, the ud6ment appealed from is hereb A"(D.RJ2K

T0e Fa5)=

The factual antecedents of the case are summariBed b the Court of Appeals as follows=

Qn its complaint, the plaintiff Jherein respondentK alle6ed that it is a partnership dul or6aniBed, eherein referred to as 4#@, is a semi6overnment

corporation dul or6aniBed, e#A)0D(C' in brief@, is also a semi6overnment corporation and the su6ar arm of the 4#, with office and principal place

of business at the 2ndloor, )ampa6uita uildin6, Cubao, HueBon Cit? and the defendant 4ampan6a )u6ar ills >4A)0+

in short@, is a corporation or6aniBed, eD4@ under +' #o. 11? that the defendant 4# or6aniBed the defendant #A)0D(C' in )eptember,

197, to taFe ownership and possession of the assets and ultimatel to nationaliBe and consolidate its interest in other 4#

controlled su6ar mills? that prior to 'ctober 29, 1971, the defendant 4A)0+ en6a6ed the services of plaintiff for

electrical rewindin6 and repair, most of which were partiall paid b the defendant 4A)0+, leavin6 several unpaid

accounts with the plaintiff? that finall, on 'ctober 29, 1971, the plaintiff and the defendant 4A)0+ entered into a

contract for the plaintiff to perform the followin6, to wit V

U>a@ Construction of one >1@ power house buildin6?

U>b@ Construction of three >@ reinforced concrete foundation for three >@ units % 5E diesel en6ine 6eneratin6

setJsK?

U>c@ Construction of three >@ reinforced concrete foundation for the ,%%% 5E and 1,2% 5E turbo 6enerator sets?

U>d@ Complete overhaulin6 and reconditionin6 tests sum for three >@ % 5E diesel en6ine 6eneratin6 setJsK?

U>e@ nstallation of turbine and diesel 6eneratin6 sets includin6 transformer, switchboard, electrical wirin6s and pipe

provided those stated units are completel supplied with their accessories?
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U>f@ "elocatin6 of 2,3%% transmission line, demolition of all ef@ )uppl of parts and related worFs for turbine 6enerator?

U>6@ )uppl of electrical e;uipment for machiner?

U>h@ )uppl of diesel en6ine parts and other related worFs includin6 fabrication of parts.P

that out of the total obli6ation of 4777,2$.8%, the defendant 4A)0+ had paid onl 42%,%%%.%%, leavin6 an unpaid

balance, as of /une 27, 197, amountin6 to 427,2$.8%, as shown in the Certification of the chief accountant of the 4#, a

machine cop of which is appended as Anne< UCP of the complaint? that out of said unpaid balance of 427,2$.8%, thedefendant 4A)0+ made a partial pament to the plaintiff of 413,%%%.%%, in broFen amounts, coverin6 the period from

/anuar , 1973 up to a 2, 1973, leavin6 an unpaid balance of 41,2$.8%? that the defendant 4A)0+ and the

defendant 4#, and now the defendant #A)0D(C', failed and refused to pa the plaintiff their ust, valid and demandable

obli6ation? that the 4resident of the #A)0D(C' is also the ice4resident of the 4#, and this official holds office at the

1%thloor of the 4#, (scolta, anila, and plaintiff besou6ht this official to pa the outstandin6 obli6ation of the

defendant 4A)0+, inasmuch as the defendant 4# and #A)0D(C' now owned and possessed the assets of the

defendant 4A)0+, and these defendants all benefited from the worFs, and the electrical, as well as the en6ineerin6 and

repairs, performed b the plaintiff? that because of the failure and refusal of the defendants to pa their ust, valid, and

demandable obli6ations, plaintiff suffered actual dama6es in the total amount of 41,2$.8%? and that in order to recover

these sums, the plaintiff was compelled to en6a6e the professional services of counsel, to whom the plaintiff a6reed to pa

a sum e;uivalent to 2 of the amount of the obli6ation due b wa of attornePs fees. Accordin6l, the plaintiff praed

that ud6ment be rendered a6ainst the defendants 4#, #A)0D(C', and 4A)0+, ointl and severall to wit=U>1@ )entencin6 the defendants to pa the plaintiffs the sum of 41,2$.8%, with annual interest of 13 from the time

the obli6ation falls due and demandable?

U>2@ Condemnin6 the defendants to pa attornePs fees amountin6 to 2 of the amount claim?

U>@ 'rderin6 the defendants to pa the costs of the suit.P

QThe defendants 4# and #A)0D(C' filed a oint motion to dismiss the complaint chiefl on the 6round that the

complaint failed to state sufficien

Corpo Case 1

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Transcript of Corpo Case 1