1

1. Barlin vs. Ramirez

7 Phil. 41
Nature:
Appeal from a judgment of the CFI of Camarines. Willard, J.:
Facts:
Ramirez, having been appointed parish priest by the plaintiff Barlin, took possession of the Church in 1901 until a
successor had been appointed in 1902. Defendant Ramirez refused to surrender the Church and Barlin filed a suit;
the municipality of Lagonoy joined Ramirez as defendants, claiming possession and ownership of the Church and
contesting Barlins authority and capacity to order that Ramirez be replaced and surrender the Church to the
appointed successor.
Issue:
WON the Catholic Church is the rightful owner of the Church?
Ruling: Yes.
Ratio: The Roman Catholic Church is a juridical entity in the Philippine Islands, and under Article 46 of the Civil Code,
Juridical persons may acquire and possess property of all kinds as well as incur obligations and bring civil or criminal
actions, in conformity with the laws and regulations of their organization.
Disposition: Judgment of the Lower Court affirmed.
2. Sunio vs. NLRC
127 SCRA 391

FACTS:
EM Ramos & Co., Inc (EMRACO) and Cabugao Ice Plant, Inc. (CIPI), sister corporations, sold an ice
plant to Rizal Development and Finance, Corp. (RDFC). To secure RDFCs payment of the purchase
price, the ice plant was mortgaged to EMRACO-CIPI. Because of the sale, EMRACO-CIPI terminated all
of theire employees, including private respondents.
Later, RDFC sold the ice plant, subject to the mortgage in favor of EMRACO-CIPI, to petitioner Ilocos
Commercial Corp. (ICC).
When RDFC and ICC defaulted on the payment of the balance of the purchase price, EMRACO-CIPI
extrajudicially foreclosed the ice plant. It then sold it to Nilo Villanueva, subject to RDFCs right of
redemption. Nilo Villanueva rehired private respondents.
When RDFC redeemend the ice plant, private respondents were again dismissed. Thus, the latter filed
complaints against the petitioner corporation, and its President and General manager, Alberto Sunio, for
illegal dismissal.
The Assistance Regional Director of the Ministry of Labor and Employment ordered petitioners to
reinstate private respondents. NLRC affirmed. Petitioner Sunio, who owned of ICC, was made jointly
and severally liable with ICC and CIPI for the payment of backwages.
ISSUE: Is Sunio liable for the payment of the backwages of private respondents?
RULING: NO. A corporation is invested by law with a personaloty separate and distinct from those
of the persons composing it as well as from that of any other legal entity to which it may be
related. Mere ownership by a single stockholder or by another coporation of all or nearly all of the
capital stock of a corporation is not itself sufficient ground for disregarding the separate
corporate personality. Therefore, Sunio should not have been made personally liable for the payment of
backwages to private respondents.
3. Luxuria Homes Inc. vs. CA
302 SCRA 315

FACTS:
Aida Posadas was the owner of a 1.6 hectare land in Sucat, Muntinlupa. In 1989, she entered into an agreement with
Jaime Bravo for the latter to draft a development and architectural design for the said property. The contract price
was P450,000.00. Posadas gave a down payment of P25,000.00. Later, Posadas assigned her property to Luxuria
Homes, Inc. One of the witnesses to the deed of assignment and articles of incorporation was Jaime Bravo.
In 1992, Bravo finished the architectural design so he proposed that he and his company manage the development of
the property. But Posadas turned down the proposal and thereafter the business relationship between the two went
sour. Bravo then demanded Posadas to pay them the balance of their agreement as regards the architectural design
(P425k). Bravo also demanded payment for some other expenses and fees he incurred i.e., negotiating and
relocating the informal settlers then occupying the land of Posadas. Posadas refused to make payment. Bravo then
filed a complaint for specific performance against Posadas but he included Luxuria Homes as a co-defendant as he

2
alleged that Luxuria Homes was a mere conduit of Posadas; that the said corporation was created in order to defraud
Bravo and avoid the payment of debt.

ISSUE: Whether or not Luxuria Homes should be impleaded.

RULING: No. It was Posadas who entered into a contract with Bravo in her personal capacity. Bravo was not able to
prove that Luxuria Homes was a mere conduit of Posadas. Posadas owns just 33% of Luxuria Homes. Further, when
Luxuria Homes was created, Bravo was there as a witness. So how can he claim that the creation of said corporation
was to defraud him. The eventual transfer of Posadas property to Luxuria was with the full knowledge of Bravo. The
agreement between Posadas and Bravo was entered into even before Luxuria existed hence Luxuria was never a
party thereto. Whatever liability Posadas incurred arising from said agreement must be borne by her solely and not in
solidum with Luxuria. To disregard the separate juridical personality of a corporation, the wrongdoing must be clearly
and convincingly established. It cannot be presumed.

4. Cease vs. CA et al.

93 SCRA 483 (Oct. 18, 1979)
FACTS:
Forrest Cease and five (5) other American citizens formed Tiaong Milling and Plantation Company.
Eventually, the shares of the other original incorporators were bought out by Cease with his children. The
companys charter lapsed in June 1958. Forrest Cease died in August 1959. There was no mention
whether there were steps to liquidate the company. Some of his children wanted an actual division while
others wanted a reincorporation. Two of his children, Benjamin and Florence, initiated Special Proceeding
No. 3893 with CFI Tayabas asking that the Tiaong Milling and Plantation Corporation be declared identical
to Forrest Cease and that its properties be divided among his children as intestate heirs. Defendants
opposed the same but the CFI ruled in favor of the plaintiffs. Defendants filed a notice of appeal from the
CFIs decision but the same was dismissed for being premature. The case was elevated to the SC which
remanded it to the Court of Appeals. The CA dismissed the petition.
ISSUE: Whether or not the Court of Appeals erred in affirming the lower courts decision that the subject
properties owned by the corporation are also properties of the estate of Forrest Cease
HELD: NO. The trial court indeed found strong support, one that is based on a well-entrenched principle
of law which is the theory of "merger of Forrest L. Cease and The Tiaong Milling as one personality", or
that "the company is only the business conduit and alter ego of the deceased Forrest L. Cease and the
registered properties of Tiaong Milling are actually properties of Forrest L. Cease and should be divided
equally, share and share alike among his six children, ... ", the trial court aptly applied the familiar
exception to the general rule by disregarding the legal fiction of distinct and separate corporate
personality and regarding the corporation and the individual member one and the same. In shredding the
fictitious corporate veil, the trial judge narrated the undisputed factual premise, thus:
While the records showed that originally its incorporators were aliens, friends or third-parties in relation to
another, in the course of its existence, it developed into a close family corporation. The Board of Directors
and stockholders belong to one family the head of which Forrest L. Cease always retained the majority
stocks and hence the control and management of its affairs. It must be noted that as his children increase
or become of age, he continued distributing his shares among them adding Florence, Teresa and Marion
until at the time of his death only 190 were left to his name. Definitely, only the members of his family
benefited from the Corporation.
The corporation 'never' had any account with any banking institution or if any account was carried in a
bank on its behalf, it was in the name of Mr. Forrest L. Cease. There is truth in plaintiff's allegation that the
corporation is only a business conduit of his father and an extension of his personality, they are one and
the same thing. Thus, the assets of the corporation are also the estate of Forrest L. Cease, the father of
the parties herein who are all legitimate children of full blood.
A rich store of jurisprudence has established the rule known as the doctrine of disregarding or piercing the
veil of corporate fiction.
GENERAL RULE: a corporation is vested by law with a personality separate and distinct from the persons
composing it as well as any other legal entity to which it may be related. By virtue of this attribute, a
corporation may not, generally, be made to answer for acts or liabilities of its stockholders or those of the

3
legal entities to which it may be connected, and vice versa. This separate and distinct personality is,
however, merely a fiction created by law for convenience and to promote the ends of justice
EXCEPTIONS: Such rule may not be used or invoked for ends subversive of the policy and purpose
behind its creation or which could not have been intended by law to which it owes its being. This is
particularly true where the fiction is used to defeat public convenience, justify wrong, protect fraud, defend
crime, confuse legitimate legal or judicial issues, perpetrate deception or otherwise circumvent the law.

This is likewise true where the corporate entity is being used as an alter ego, adjunct, or business conduit
for the sole benefit of the stockholders or of another corporate. In any of these cases, the notion of
corporate entity will be pierced or disregarded, and the corporation will be treated merely as an
association of persons or, where there are two corporations, they will be merged as one, the one being
merely regarded as part or the instrumentality of the other.
An indubitable deduction from the findings of the trial court cannot but lead to the conclusion that the
business of the corporation is largely, if not wholly, the personal venture of Forrest L. Cease. There is not
even a shadow of a showing that his children were subscribers or purchasers of the stocks they own.
Their participation as nominal shareholders emanated solely from Forrest L. Cease's gratuitous dole out
of his own shares to the benefit of his children and ultimately his family.
If the Court sustained the theory of petitioners that the trial court acted in excess of jurisdiction or abuse of
discretion amounting to lack of jurisdiction in deciding the civil case as a case for partition, Tiaong Milling
and Plantation Company would have been able to extend its corporate existence beyond the period of its
charter which lapsed in June, 1958 under the guise and cover of F. L, Cease Plantation Company, Inc. as
Trustee which would be against the law, and as Trustee shall have been able to use the assets and
properties for the benefit of the petitioners, to the great prejudice and defraudation. of private
respondents. Hence, it becomes necessary and imperative to pierce that corporate veil.
The judgment appealed from is AFFIRMED.
5. Palacio vs. Fely Transportation
G.R. L-15121, May 31, 1962
FACTS:

"In their complaint filed with this Court on May 15, 1954, plaintiffs allege, among
other things, 'that about December, 1952, the defendant company hired Alfredo
Carillo as driver of AC-787 (687) (a registration for 1952) owned and operated by
the said defendant company; that on December 24, 1952, at about 11:30 a.m.,
while the driver Alfonso (Alfredo) Carillo was driving AC-687 at Halcon Street,
Quezon City, wilfully, unlawfully and feloniously and in a negligent, reckless and
imprudent manner, run over a child Mario Palacio of the herein plaintiff Gregorio
Palacio; that on account of the aforesaid injuries, Mario Palacio suffered a simple
fracture of the right temor (sic), complete third, thereby hospitalizing him at the
Philippine Orthopedic Hospital from December 24, 1952, up to January 8, 1953, and
continued to be treated for a period of five months thereafter; that the plaintiff
Gregorio Palacio herein is a welder by occupation and owner of a small welding shop
and because of the injuries of his child he has abandoned his shop where he derives
income of P10.00 a day for the support of his big family; that during the period that
the plaintiff's (Gregorio Palacio's) child was in the hospital and when said child was
under treatment for five months in order to meet the needs of his big family, he was
forced to sell one air compressor (heavy duty) and one heavy duty electric drill, for
a sacrifice sale of P150.00 which could easily sell at P350.-00; that as a
consequence of the negligent and reckless act of the driver Alfredo Carillo of the
herein defendant company, the herein plaintiffs were forced to litigate this case in
Court for an agreed amount of P300.00 for attorney's fee; that the herein plaintiffs
have now incurred the amount of P500.00 for actual expenses for transportation,
representation and similar expenses for gathering evidence and witnesses; and that
because of the nature of the injuries of plaintiff Mario Palacio, and the fear that the

4
child might become a useless invalid, the herein plaintiff Gregorio Palacio has
suffered moral damages which could be conservatively estimated at P1,200.00.'
"On May 23, 1956, defendant Fely Transportation Co., filed a Motion to Dismiss on
the grounds (1) that there is no cause of action against the defendant company, and
(2) that the cause of action is barred by prior judgment.
ISSUE:
1. Is Isabelo Calingasan and Fely Transportation one and the same person?
2. Can Isabelo Calingasan be held subsidiarily liable for the insolvency of Alfredo Carillo, his driver?
RULING:
1. YES. The Court agrees with this contention of the plaintiffs. Isabelo Calingasan and

defendant Fely Transportation may be regarded as one and the same person. It is
evident that Isabelo Calingasan's main purpose in forming the corporation was to
evade his subsidiary civil liability1 resulting from the conviction of his driver, Alfredo
Carillo. This conclusion is borne out by the fact that the incorporators of the Fely
Transportation are Isabelo Calingasan, his wife, his son, Dr. Calingasan, and his two
daughters. We believe that this is one case where the defendant corporation should
not be heard to say that it has a personality separate and distinct from its members
when to allow it to do so would be to sanction the use of the fiction of corporate
entity as a shield to further an end subversive of justice. (La Campana Coffee
Factory, et al. v. Kaisahan ng mga Manggagawa, etc., et al., G.R. No. L-5677, May
25, 1953) Furthermore, the failure of the defendant corporation to prove that it has
other property than the jeep (AC-687) strengthens the conviction that its formation
was for the purpose above indicated.
2. YES. And while it is true that Isabelo Calingasan is not a party in this case, yet, as

held in the case of Alonso v. Villamor, 16 Phil. 315, this Court can substitute him in
place of the defendant corporation as to the real party in interest. This is so in order
to avoid multiplicity of suits and thereby save the parties unnecessary expenses
and delay. (Sec. 2, Rule 17, Rules of Court; Cuyugan v. Dizon, 79 Phil. 80; Quison v.
Salud, 12 Phil. 109.)
Accordingly, defendants Fely Transportation and Isabelo Calingasan should be held
subsidiarily liable for P500.00 which Alfredo Carillo was ordered to pay in the
criminal case and which amount he could not pay on account of insolvency.