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CASE 2017-0016: CALIFORNIA MANUFACTURING COMPANY NC. VS. ADVANCED SYSTEM, INC. (G.R. NO. 202454, 25 APRIL 2017, SERENO, J.)  (PIERCING THE VEIL OF CORPORATE FICTION) (BRIEF TITLE: CALIFORNIA MANUFACTURING VS. ADVANCED SYSTEM)

 

DISPOSITIVE:

 

“WHEREFORE, the Decision dated 25 August 2011 and Resolution dated 21 June 2012 issued by the Court of Appeals in CA-G.R. CV No. 94409 are AFFIRMED. The instant Petition is DENIED for lack of merit.

 

SO ORDERED.”

 

SUBJECTS/DOCTRINES/DIGEST:

 

ADVANCED TECHNOLOGY FILED COLLECTION CASE AGAINST CALIFORNIA MANUFACTURING FOR BALANCE OF COST OF MACHINE IT DELIVERED. CALIFORNIA MANUFACTURING SAID SUCH BALANCE MUST BE OFFSET BY THE DEBT TO THEM OF PPPC WHICH IS ONE AND THE SAME WITH ADVANCED SYSTEM BECAUSE THE CELONES SPOUSES  WHO AGREED TO SUCH OFFSETTING ARE OFFICERS AND MAJOR STOCKHOLDERS OF THE TWO CORPORATIONS: PPPC AND ADVANCED TECHNOLGY. IN OTHER WORDS THE VEIL OF CORPORATE FICTION MUST BE PIERCED. IS CALIFORNIA MANUFACTURING CORRECT?

 

WRONG.

 

CALIFORNIA MANUFACTURING HAS ONLY PROVEN THAT SPOUSES  CELONES ARE INCORPORATORS, DIRECTORS, AND MAJORITY STOCKHOLDERS OF THE ADVANCED SYSTEM  AND PPPC. THERE IS NO PROOF THAT PPPC CONTROLLED THE FINANCIAL POLICIES AND BUSINESS PRACTICES OF ADVANCED SYSTEM.

 

“Without question, the Spouses Celones are incorporators, directors, and majority stockholders of the ATSI and PPPC. But that is all that CMCI has proven. There is no proof that PPPC controlled the financial policies and business practices of ATSI either in July 2001 when Felicisima proposed to set off the unpaid P3.2 million mobilization fund with CMCI’s rental of Prodopak machines; or in August 2001 when the lease agreement between CMCI and ATSI commenced. Assuming arguendo that Felicisima was sufficiently clothed with authority to propose the offsetting of obligations, her proposal cannot bind ATSI because at that time the latter had no transaction yet with CMCI. Besides, CMCI had leased only one Prodopak machine. Felicisima’s reference to the Prodopak machines in its letter in July 2001 could only mean that those were different from the Prodopak machine that CMCI had leased from A TSI.”

  

WHAT IS THE RULE IN PIERCING THE CORPORATE VEIL OF FICTION?

 

IT MUST BE DONE WITH CAUTION.

 

IT MUST BE CERTAIN  THAT THE CORPORATE FICTION WAS MISUSED TO SUCH AN EXTENT THAT INJUSTICE, FRAUD, OR CRIME WAS COMMITTED AGAINST ANOTHER, IN DISREGARD OF RIGHTS. MOREOVER, THE WRONGDOING MUST BE CLEARLY AND CONVINCINGLY ESTABLISHED.

 

WHEN WILL THE DOCTRINE OF PIERCING THE CORPORATE VEIL APPLIES?

 

 ONLY IN THREE (3) BASIC AREAS, NAMELY:

 

1) DEFEAT OF PUBLIC CONVENIENCE AS WHEN THE CORPORATE FICTION IS USED AS A VEHICLE FOR THE EVASION OF AN EXISTING OBLIGATION;

 

2) FRAUD CASES OR WHEN THE CORPORATE ENTITY IS USED TO JUSTIFY A WRONG, PROTECT FRAUD, OR DEFEND A CRIME; OR

 

3) ALTER EGO CASES, WHERE A CORPORATION IS MERELY A FARCE SINCE IT IS A MERE ALTER EGO OR BUSINESS CONDUIT OF A PERSON, OR WHERE THE CORPORATION IS SO ORGANIZED AND CONTROLLED AND ITS AFFAIRS ARE SO CONDUCTED AS TO MAKE IT MERELY AN INSTRUMENTALITY, AGENCY, CONDUIT OR ADJUNCT OF ANOTHER CORPORATION.

 

TO READ THE DECISION, JUST CLICK/DOWNLOAD THE FILE BELOW.

 

SCD-2017-0016-CALIFORNIA MANUF CASE

 

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CASE 2017-0015: RODANTE F. GUYAMIN, LUCINIA F. GUYAMIN, and EILEEN G. GATARIN,  VS. JACINTO G. FLORES and MAXIMO G. FLORES, represented by RAMON G. FLORES,   (G.R. No. 202189   25 APRIL 2017, DEL CASTILLO, J.) (DEFENSE MUST BE BASED ON MERITS NOT TECHNICALITIES) (BRIEF TITLE: GUYAMIN ET AL VS GATARIN ET AL.)

 

DISPOSITIVE:

 

“WHEREFORE, the Petition is DENIED. The May 23, 2012 Decision of the Court of Appeals in CA-G.R. CV. No. 92924 is AFFIRMED.

 

SO ORDERED.”

 

 

SUBJECTS/DOCTRINES/DIGEST:

 

PETITIONERS STAYED IN RESPONDENTS’ LAND OUT OF THE LATER’S TOLERANCE. RESPONDENTS FILED CASE TO OUST PETITIONERS AFTER MEDIATION FAILED. PETITIONERS WERE  DECLARED IN DEFAULT BUT THEY  FILED AN ANSWER THOUGH LATE AND RESPONDENTS FILED A REPLY. RESPONDENTS FAILED TO FILE A FORMAL OFFER OF EVIDENCE BUT DESPITE THIS, THE LOWER COURT STILL ISSUED A DECISION WHICH WAS IN FAVOR OF RESPONDENTS.

 

PETITIONERS RAISED THE DEFENSE THAT THEY  SHOULD NOT HAVE BEEN DECLARED IN FAULT SINCE THEY  FILED AN ANSWER AND RESPONDENTS IN FACT FILED A REPLY  AND THAT THE CASE SHOULD HAVE BEEN DISMISSED BECAUSE RESPONDENT FAILED TO FILE A FORMAL OFFER OF EVIDENCE. IS PETITIONER CORRECT?

 

 NO. PETITIONERS’ DEFENSES ARE PURELY TECHNICAL AND NOT BASED ON MERITS.

 

PETITIONERS RAISED PURELY PROCEDURAL QUESTIONS AND NOTHING MORE. IN OTHER WORDS, PETITIONERS AIM TO WIN THEIR CASE NOT ON THE MERIT, BUT ON PURE TECHNICALITY.

 

“To repeat, this Court will not waste its precious time and energy in a futile exercise where the result would be for naught; petitioners will not be indulged when it appears that they have no valid claim in the first place. Quite the contrary, the Court must give respondents the justice they deserve. As owners of the subject property who have been deprived of the use thereof for so many years owing to petitioners’ continued occupation, and after all these years of giving unconditionally to the petitioners who are their relatives, respondents must now enjoy the fruits of their ownership.”

 

“The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice, but not to bind and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical rules, shorn of judicial discretion. That is precisely why courts, in rendering justice, have always been, as they in fact ought to be, conscientiously guided by the norm that on the balance, technicalities take a backseat to substantive rights, and not the other way around. As applied to the instant case, in the language of then Chief Justice Querube Makalintal, technicalities ‘should give way to the realities of the situation’ .22 (Emphasis supplied)”

 

TO READ THE DECISION, JUST CLICK/DOWNLOAD THE FILE BELOW.

 

SCD-2017-0015-RODANTE F. GUYAMIN, ET AL. VS. JACINTO G. FLORES AND MAXIMO G. FLORES REPRESENTED BY RAMON G. FLORES

 

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CASE 2017-0014: DUTCH MOVERS, INC., CESAR LEE AND YOLANDA LEE VS. EDILBERTO LEQUIN, ET AL.

 

DISPOSITIVE:

 

“WHEREFORE, the Petition is DENIED. The July 1, 2013 Decision and November 13, 2013 Resolution of the Court of Appeals in CA-G.R. SP 113774 are AFFIRMED with the modification that instead of reinstatement, Dutch Movers, Inc. and spouses Cesar Lee and Yolanda Lee are solidarily liable to pay respondents’ separation pay for every year of service.

 

SO ORDERED.”

 

TO READ THE DECISION, JUST CLICK/DOWNLOAD THE FILE BELOW.

 

SCD-2017-0014-DUTCH MOVERS INC., CESAR LEE AND YOLANDA LEE VS. EDILBERTO LEQUIN ET AL.

 

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