Idulza v COMELEC
En Banc also ruled that Asuncion should not
G.R. No. 160130. April 14, 2004
Petitioner: ISIDRO IDULZA and GODOFREDO CABANA
Respondent: COMMISSION ON ELECTIONS and TERESITA A. BOLLOZOS,
REY L. MORTIZ, MIGUEL P. PADERANGA, JOJAC Q. ASUNCION and
CIFERINO L. GARCIA, JR.
RULING:.
FACTS
On 17 May 2001, petitioners Isidro Idulza (Idulza) and Godofredo Cabana
(Cabana) were proclaimed as the seventh (7th) and eighth (8th) winning
candidates for the office of members of the Sangguniang Panglungsod of Gingoog
City. Private respondents Miguel Paderanga (Paderanga), Jojac Asuncion
(Asuncion), and Ciferino L. Garcia, Jr. (Garcia), all losing candidates for the same
office, filed an election protest with the COMELEC on 25 May 2001, against the
two petitioners therein and Besben Maquiso (Maquiso), who had placed ninth
(9th) in the canvass results.
COMELEC 2nd Division:
COMELEC 2nd division found that the respondents gathered more votes than the
petitioners and at the same time it determined that one Rey Y. Mortiz, who was
not a party to the election protest had also garnered more votes than the
petitioners.
Petitioner’s Appeal:
Aside from contesting the Second Divisions appreciation of the contested ballots,
the petitioners also specifically questioned the proclamation of Mortiz, who was
not a party to the election protest. Petitioners also noted therein that Asuncion
and Garcia had filed certificates of candidacy for Punong Barangay and Barangay
Kagawad respectively in the 15 July 2002 barangay elections, and Asuncion was
elected. As a result, it was argued, Asuncion and Garcia should be deemed to have
abandoned their election protest.
Motion to Intervene:
Bollozos (Bollozos), who was not a party to the election protest, filed a Motion for
Leave to Intervene in `COMELEC Case. She alleged therein that she too was a
losing candidate for the Gingoog City Sanggunian, yet her vote total according to
the records had surpassed the number of votes ascribed to Asuncion and Garcia.
She therefore asserted that she should have been proclaimed as the ninth (9th)
winning candidate in lieu of Asuncion, who should have placed tenth (10th)
instead.
COMELEC En Banc:
Affirmed 2nd Division, furthermore it merited the intervention of Bollozos which
clearly garnered votes outnumbering Asuncion’s and Garcia’s. Bollozos was then
declared as the 9th place candidate.
be proclaimed, as he has been deemed to have abandoned his protest due to his
successful candidacy for Punong Barangay in the 2002 elections, thus the 10 th
place was declared vacant.
ISSUES
1. Whether or not the Respondent Judge should have pierced the veil of
Respondent PADCO's corporate entity – YES
RULING: The Respondent Judge should have pierced the veil of corporate fiction
of PADCO.
RATIO
Petitioner Tan Boon Bee's contention: The corporate veil of the entity
PADCO should be pierced because of the overwhelming evidence that Respondent
GRAPHIC was hiding behind the veil of corporate fiction in order to defy the
court's writ of execution. The evidence that both constituted one entity:
Respondent PADCO was never engaged in the printing business; the board of
directors and the officers of PADCO and GRAPHIC were the same; PADCO holds
50% share of stock of GRAPHIC. PADCO's own evidence shows that the printing
machine had been in the premises of GRAPHIC since long before PADCO even
allegedly acquired its title to the property.
SC: The veil of corporate fiction should have been pierced due to the evidence
shown.
It is true that a corporation is invested by law with a personality separate and
distinct from the persons composing it as well as from any other legal entity to
which it may be related, but this separate personality of the corporation
may be disregarded, or the veil of corporate fiction pierced, in cases
where it is used as a cloak or cover for fraud or illegality, or to work an
injustice, or where necessary to achieve equity or when necessary for
the protection of creditors. Corporations are composed of natural persons and
the legal fiction of a separate corporate personality is not a shield for the
commission of injustice and inequity. Likewise, this is true when the corporation
is merely an adjunct, business conduit or alter ego of another corporation. In such
case, the fiction of separate and distinct corporation entities should be
disregarded.
Considering the aforestated principles and the circumstances established in this
case, respondent judge should have pierced PADCO's veil of corporate Identity.