7 Livesey vs Binswanger Phil

G.R. No. 177493, Mar. 19, 2014

Separate Personality/ Piercing the Corporate Veil; Brion

1. Livesey as Director of CBB (Chesterton Blumenauer Binswanger) Phils. Filed

an illegal dismissal case against the latter, because they failed to pay him
his salary, compelling him to resign
a. Before the Labor Arbiter, a compromise agreement was entered into
where Livesey will receive $31K to be paid in installments.
b. CBB paid the first installment but not the next two because CBB ceased
operations.
2. Livesey moved to execute the LA’s judgment in his favor, because CBB after
ceasing operations formed another corporation, Binswanger Phils. He
invoked the piercing of the corporate veil doctrine so Binswanger could be
liable for his monetary claims.
a. CBB has Binswanger in its name; officers of CBB moved to Binswanger;
Binswanger used CBB’s stamp in receipt of summons

ISSUE: WON Binswanger could be held liable for the liabilities of CBB applying
the piercing of the corporate veil doctrine YES

 General Rule: A corporation has a separate and distinct personality from its
stockholders or members.
o An exception is when the "doctrine of piercing the veil of corporate
fiction” applies – where the corporate existence may be disregarded
where the entity is formed or used for non-legitimate purposes, such as
to evade a just and due obligation, or to justify a wrong, to shield or
perpetrate fraud or to carry out similar or inequitable considerations
o This is an equitable doctrine to avoid the use of the separate personality
of a corporation for wrongful purposes
 In this case, the piercing of the corporate veil doctrine applies.
o CBB merely formed Binswanger to avoid payment of the monetary
obligation to Livesey
o The evidence proving the same are: they are in the same building;
officers are the same; use of the same receiving stamp; Binswanger
even took over the projects of CBB; and Binswanger engaged in the
same business (real estate brokerage)
 Elliot, President of Binswanger and Binswanger are solidarily liable for the
claims of Livesey
o Note: Elliot was made liable because of his bad faith in knowing that
CBB has not yet paid Livesey and in maneuvering the closure of CBB
and forming Binswanger