Bibiano Reynoso IV vs Court of Appeals
FACTS:
Reynoso was the branch manager of Commercial Credit Corporation – Quezon City (CCC-
QC), a branch of Commercial Credit Corporation (CCC). It was alleged that Reynoso was
opposed to certain questionable commercial practices being facilitated by CCC which
caused its branches, like CCC-QC, to rack up debts. Eventually, Reynoso withdrew his
own funds from CCC-QC. This prompted CCC-QC to file criminal cases for estafa and
qualified theft against Reynoso. The criminal cases were dismissed and Reynoso was
exonerated and at the same time CCC-QC was ordered to pay Reynoso’s counterclaims
which amounted to millions. A writ of execution was issued against CCC-QC. The writ was
opposed by CCC-QC as it now claims that it has already closed and that its assets were
taken over by the mother company, CCC.
Meanwhile, CCC changed its name to General Credit Corporation (GCC).
Reynoso then filed a petition for an alias writ of execution. GCC opposed the writ as it
argued that it is a separate and distinct corporation from CCC and CCC-QC, in short, it
raises the defense of corporate fiction.
ISSUE:
Whether or not GCC is correct.
HELD:
No. The veil of corporate fiction must be pierced. It is obvious that CCC’s change of name
to GCC was made in order to avoid liability. CCC-QC willingly closed down and transferred
its assets to CCC and thereafter changed its name to GCC in order to avoid its
responsibilities from its creditors. GCC and CCC are one and the same; they are engaged
in the same line of business and single transaction process, i.e. finance and investment.
When the mother corporation and its subsidiary cease to act in good faith and honest
business judgment, when the corporate device is used by the parent to avoid its liability for
legitimate obligations of the subsidiary, and when the corporate fiction is used to
perpetrate fraud or promote injustice, the law steps in to remedy the problem. When that
happens, the corporate character is not necessarily abrogated. It continues for legitimate
objectives. However, it is pierced in order to remedy injustice, such as that inflicted in this
case.
Renato Tayag vs Benguet Consolidated, Inc.
FACTS:
In March 1960, Idonah Perkins died in New York. She left behind properties here and
abroad. One property she left behind were two stock certificates covering 33,002 shares of
stocks of the Benguet Consolidated, Inc (BCI). Said stock certificates were in the
possession of the Country Trust Company of New York (CTC-NY). CTC-NY was the
domiciliary administrator of the estate of Perkins (obviously in the USA). Meanwhile, in
1963, Renato Tayag was appointed as the ancillary administrator (of the properties of
Perkins she left behind in the Philippines).
A dispute arose between CTC-NY and Tayag as to who between them is entitled to
possess the stock certificates. A case ensued and eventually, the trial court ordered CTC-
NY to turn over the stock certificates to Tayag. CTC-NY refused. Tayag then filed with the
court a petition to have said stock certificates be declared lost and to compel BCI to issue
new stock certificates in replacement thereof. The trial court granted Tayag’s petition.
BCI assailed said order as it averred that it cannot possibly issue new stock certificates
because the two stock certificates declared lost are not actually lost; that the trial court as
well Tayag acknowledged that the stock certificates exists and that they are with CTC-NY;
that according to BCI’s by laws, it can only issue new stock certificates, in lieu of lost,
stolen, or destroyed certificates of stocks, only after court of law has issued a final and
executory order as to who really owns a certificate of stock.
ISSUE:
Whether or not the arguments of Benguet Consolidated, Inc. are correct.
HELD:
No. Benguet Consolidated is a corporation who owes its existence to Philippine laws. It
has been given rights and privileges under the law. Corollary, it also has obligations under
the law and one of those is to follow valid legal court orders. It is not immune from judicial
control because it is domiciled here in the Philippines. BCI is a Philippine corporation
owing full allegiance and subject to the unrestricted jurisdiction of local courts. Its shares of
stock cannot therefore be considered in any wise as immune from lawful court orders.
Further, to allow BCI’s opposition is to render the court order against CTC-NY a mere
scrap of paper. It will leave Tayag without any remedy simply because CTC-NY, a foreign
entity refuses to comply with a valid court order. The final recourse then is for our local
courts to create a legal fiction such that the stock certificates in issue be declared lost even
though in reality they exist in the hands of CTC-NY. This is valid. As held time and again,
fictions which the law may rely upon in the pursuit of legitimate ends have played an
important part in its development.
Further still, the argument invoked by BCI that it can only issue new stock certificates in
accordance with its bylaws is misplaced. It is worth noting that CTC-NY did not appeal the
order of the court – it simply refused to turn over the stock certificates hence ownership
can be said to have been settled in favor of estate of Perkins here. Also, assuming that
there really is a conflict between BCI’s bylaws and the court order, what should prevail is
the lawful court order. It would be highly irregular if court orders would yield to the bylaws
of a corporation. Again, a corporation is not immune from judicial orders.
National Development Corporation vs Philippine Veterans Bank
192 SCRA 257 [GR No. 84132-33 December 10, 1990]
FACTS:
The particular enactment in question is Presidential Decree No. 1717, which ordered the
rehabilitation of the Agrix Group of Companies to be administered mainly by the National
Development Company. The law outlined the procedure for filling claims against the Agrix
Companies and created a claims committee to process these claims. Especially relevant to
this case, and noted at the outset, is section 4(1) thereof providing that “all mortgages and
other liens presently attaching to any of the assets of the dissolved corporations are
hereby extinguished.” Earlier, the Agrix Marketing Inc. had executed in favor of private
respondent Philippine Veterans Bank a real estate mortgage dated July 7, 1978 over three
parcels of land situated in Los Baños, Laguna. During the existence of the mortgage, Agrix
went bankrupt. It was the expressed purpose of salvaging this and the other Agrix
companies that the aforementioned decree was issued by President Marcos. A claim for
the payment of its loan credit was filed by PNB against herein petitioner, however the latter
alleged and invoked that the same was extinguished by PD 1717.
ISSUE:
Whether or not Philippine Veterans Bank as creditor of Agrix is still entitled for payment
without prejudice to PD 1717.
HELD:
Yes. A mortgage lien is a property right derived from contract and so comes under the
protection of Bill of rights so do interests on loans, as well s penalties and charges, which
are also vested rights once they accrue. Private property cannot simply be taken by law
from one person and given to another without just compensation and any known public
purpose. This is plain arbitrariness and is not permitted under the constitution.
The court also feels that the decree impairs the obligation of the contract between Agrix
and the private respondent without justification. While it is true that the police power is
superior to the impairment clause, the principle will apply only where the contract is so
related to the public welfare that it will be considered congenitally susceptible to change by
the legislature in the interest of greater number.
Our finding in sum, is that PD 1717 is an invalid exercise of the police power, not being in
conformity with the traditional requirements of a lawful subject and a lawful method. The
extinction of the mortgage and other liens and of the interest and other charges pertaining
to the legitimate creditors of Agrix constitutes taking without due process of law, and this is
compounded by the reduction of the secured creditors to the category of unsecured
creditors in violation of the equal protection clause. Moreover, the new corporation being
neither owned nor controlled by the government, should have been created only by
general and not special law. And in so far as the decree also interferes with purely private
agreements without any demonstrated connection with the public interest, there is likewise
an impairment of the obligation of the contract.
Manila Hotel Corporation vs National Labor Relations Commission
FACTS:
In May 1988, Marcelo Santos was an overseas worker in Oman. In June 1988, he was
recruited by Palace Hotel in Beijing, China. Due to higher pay and benefits, Santos agreed
to the hotel’s job offer and so he started working there in November 1988. The
employment contract between him and Palace Hotel was however without the intervention
of the Philippine Overseas Employment Administration (POEA). In August 1989, Palace
Hotel notified Santos that he will be laid off due to business reverses. In September 1989,
he was officially terminated.
In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel
Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was
impleaded but no summons were served upon it. MHC is a government owned and
controlled corporation. It owns 50% of MHIL, a foreign corporation (Hong Kong). MHIL
manages the affair of the Palace Hotel. The labor arbiter who handled the case ruled in
favor of Santos. The National Labor Relations Commission (NLRC) affirmed the labor
arbiter.
ISSUE:
Whether or not the NLRC has jurisdiction over the case.
HELD:
No. The NLRC is a very inconvenient forum for the following reasons:
The only link that the Philippines has in this case is the fact that Santos is a Filipino;
However, the Palace Hotel and MHIL are foreign corporations – MHC cannot be held liable
because it merely owns 50% of MHIL, it has no direct business in the affairs of the Palace
Hotel. The veil of corporate fiction can’t be pierced because it was not shown that MHC is
directly managing the affairs of MHIL. Hence, they are separate entities.
Santos’ contract with the Palace Hotel was not entered into in the Philippines;
Santos’ contract was entered into without the intervention of the POEA (had POEA
intervened, NLRC still does not have jurisdiction because it will be the POEA which will
hear the case);
MHIL and the Palace Hotel are not doing business in the Philippines; their agents/officers
are not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining
to the case. It is not competent to determine the facts because the acts complained of
happened outside our jurisdiction. It cannot determine which law is applicable. And in case
a judgment is rendered, it cannot be enforced against the Palace Hotel (in the first place, it
was not served any summons).
The Supreme Court emphasized that under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case if it chooses to do so provided:
(1) that the Philippine court is one to which the parties may conveniently resort to;
(2) that the Philippine court is in a position to make an intelligent decision as to the law and
the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision.
None of the above conditions are apparent in the case at bar.
ABS-CBN Broadcasting Corporation vs Court of Appeals 2. No. The award of moral damages cannot be granted in favor of a corporation because,
being an artificial person and having existence only in legal contemplation, it has no
FACTS: feelings, no emotions, no senses, It cannot, therefore, experience physical suffering and
In 1992, ABS-CBN Broadcasting Corporation, through its vice president Charo Santos- mental anguish, which call be experienced only by one having a nervous system. No moral
Concio, requested Viva Production, Inc. to allow ABS-CBN to air at least 14 films produced damages can be awarded to a juridical person. The statement in the case of People vs
by Viva. Pursuant to this request, a meeting was held between Viva’s representative Manero and Mambulao Lumber vs PNB is a mere obiter dictum hence it is not binding as a
(Vicente Del Rosario) and ABS-CBN’s Eugenio Lopez (General Manager) and Santos- jurisprudence.
Concio was held on April 2, 1992. During the meeting Del Rosario proposed a film
package which will allow ABS-CBN to air 104 Viva films for P60 million. Later, Santos-
Concio, in a letter to Del Rosario, proposed a counterproposal of 53 films (including the 14
films initially requested) for P35 million. Del Rosario presented the counter offer to Viva’s
Board of Directors but the Board rejected the counter offer. Several negotiations were
subsequently made but on April 29, 1992, Viva made an agreement with Republic
Broadcasting Corporation (referred to as RBS – or GMA 7) which gave exclusive rights to
RBS to air 104 Viva films including the 14 films initially requested by ABS-CBN.

ABS-CBN now filed a complaint for specific performance against Viva as it alleged that
there is already a perfected contract between Viva and ABS-CBN in the April 2, 1992
meeting. Lopez testified that Del Rosario agreed to the counterproposal and he (Lopez)
even put the agreement in a napkin which was signed and given to Del Rosario. ABS-CBN
also filed an injunction against RBS to enjoin the latter from airing the films. The injunction
was granted. RBS now filed a countersuit with a prayer for moral damages as it claimed
that its reputation was debased when they failed to air the shows that they promised to
their viewers. RBS relied on the ruling in People vs Manero and Mambulao Lumber vs
PNB which states that a corporation may recover moral damages if it “has a good
reputation that is debased, resulting in social humiliation”. The trial court ruled in favor of
Viva and RBS. The Court of Appeals affirmed the trial court.

ISSUE:
1. Whether or not a contract was perfected in the April 2, 1992 meeting between the
representatives of the two corporations.
2. Whether or not a corporation, like RBS, is entitled to an award of moral damages
upon grounds of debased reputation.

HELD:
1. No. There is no proof that a contract was perfected in the said meeting. Lopez’
testimony about the contract being written in a napkin is not corroborated because the
napkin was never produced in court. Further, there is no meeting of the minds because Del
Rosario’s offer was of 104 films for P60 million was not accepted. And that the alleged
counter-offer made by Lopez on the same day was not also accepted because there’s no
proof of such. The counter offer can only be deemed to have been made days after the
April 2 meeting when Santos-Concio sent a letter to Del Rosario containing the counter-
offer. Regardless, there was no showing that Del Rosario accepted. But even if he did
accept, such acceptance will not bloom into a perfected contract because Del Rosario has
no authority to do so.

As a rule, corporate powers, such as the power; to enter into contracts; are exercised by
the Board of Directors. But this power may be delegated to a corporate committee, a
corporate officer or corporate manager. Such a delegation must be clear and specific. In
the case at bar, there was no such delegation to Del Rosario. The fact that he has to
present the counteroffer to the Board of Directors of Viva is proof that the contract must be
accepted first by the Viva’s Board. Hence, even if Del Rosario accepted the counter-offer,
it did not result to a contract because it will not bind Viva sans authorization.
People vs. Manero (G.R. Nos. 86883-85) alibi must not only be at some other place but that it must also be physically impossible for
him to be at the scene of the
FACTS: crime at the time of its commission.‖ There is no physical impossibility where the accused
On 11 April 1985, the Manero brothers Norberto Jr., Edilberto and Elpidio, along with can be at the crime scene in a
Rodrigo Espia, Severino Lines, Rudy Lines, Efren Pleñago and Roger Bedaño, were inside matter of 15-20 minutes by jeep or tricycle. More important, it is well-settled that the
the eatery of one Reynaldo Diocades. They were conferring with three others of a plan to defense of alibi cannot prevail over the positive identification of the authors of the crime by
liquidate a number of suspected communist sympathizers. Among their targets are: Fr. the prosecution witnesses. In this case, there were two eyewitnesses who positively
Peter, Domingo Gomez, Bantil, Fred Gapate, Rene alias Tabagac and Villaning." "Fr. identified the accused. Contrary to the claim of the Lines brothers, there is a community of
Peter" is Fr. Peter Geremias, an Italian priest suspected of having links with the communist design to commit the crime. Based on the findings of the lower court, they are not merely
movement; "Bantil" is Rufino Robles, a Catholic lay leader who is the complaining witness innocent bystanders but in fact were vital cogs in the murder of Fr. Fuvali. They performed
in the Attempted Murder; Domingo Gomez is another lay leader, while the others are overt acts to ensure the success of the commission of the crimes and the furtherance of
simply "messengers". On the same occasion, the conspirators agreed to Edilberto the aims of the conspiracy. While accused-appellants may not have delivered the fatal
Manero's proposal that should they fail to kill Fr. Peter Geremias, another Italian priest shots themselves, their collective action showed a common intent to commit the criminal
would be killed in his stead. They later on nailed a placard near the carinderia bearing the acts. There is conspiracy when two or more persons come to an agreement to commit a
names of their intended victims. Later, at 4:00 pm, the Manero brothers, together with crime and decide to commit it.
Espia and the four (4) appellants, all with assorted firearms, proceeded to the house of
"Bantil", their first intended victim, which was also in the vicinity of Deocades' It is not essential that all the accused commit together each and every act constitutive of
carinderia the offense. It is enough that an accused participates in an act or deed where there is
. After a heated confrontation, Edilberto drew his revolver and fired at the forehead of singularity of purpose, and unity in its execution is present While it may be true that Fr.
Bantil who was able to parry and was hit at the lower portion of his ear. Bantil tried to run Favali was not originally the intended victim, as it was Fr. Peter Geremias whom the group
but he was again fired upon by Edilberto. Though Bantil was able to seek refuge in the targeted for the kill, nevertheless, Fr. Favali was deemed a good substitute in the murder
house of a certain Domingo Gomez, Norberto Jr. ordered his men to surround the house as he was an Italian priest. The accused agreed that in case they fail to kill the intended
so that Bantil would die of hemorrhage. Moments later, while Deocades was feeding his victims, it will be suffice to kill another priest as long as the person is also Italian priest.
swine, Edilberto strewed him with a burst of gunfire from his M-14 Armalite. Deocades
cowered in fear as he knelt with both hands clenched at the back of his head. This again
drew boisterous laughter and ridicule from the dreaded desperados. At 5:00 o'clock, Fr.
Tulio Favali arrived at Km.125 on board his motorcycle. He entered the house of Gomez.
While inside, Norberto, Jr., and his co-accused Pleñago towed the motorcycle outside to
the center of the highway. Norberto, Jr., opened the gasoline tank, spilled some fuel, lit a
fire and burned the motorcycle. As the vehicle was ablaze, the felons raved and rejoiced.
Upon seeing his motorcycle on fire, Fr. Favali accosted Norberto, Jr. But the latter simply
stepped backwards and executed a thumbs-down signal. At this point, Edilberto asked the
priest: "Ano ang gusto mo, padre (What is it you want, Father)? Gusto mo, Father, bukon
ko ang ulo mo (Do you want me, Father, to break your head)?" Thereafter, in a flash,
Edilberto fired at the head of the priest. As Fr. Favali dropped to the ground, his hands
clasped against his chest, Norberto, Jr., taunted Edilberto if that was the only way he knew
to kill a priest. Slighted over the remark, Edilberto jumped over the prostrate body three (3)
times, kicked it twice, and fired anew. The burst of gunfire virtually shattered the head of
Fr. Favali, causing his brain to scatter on the road. As Norberto, Jr., flaunted the brain to
the terrified onlookers, his brothers danced and sang "Mutya Ka Baleleng" to the delight of
their comrades-in-arms who now took guarded positions to isolate the victim from possible
assistance. From this judgment of conviction only accused Severino Lines, Rudy Lines,
Efren Pleñago and Roger Bedaño appealed with respect to the cases for Murder and
Attempted Murder. The Manero brothers as well as Rodrigo Espia did not appeal; neither
did Norberto Manero, Jr., in the Arson case. Consequently, the decision as against them
already became final.
Issue:
Whether or not the appellants can be exculpated from criminal liability on the basis of
defense of alibi which would establish that there is no conspiracy to kill.
Held:
The court did not appreciate the defense of alibi of the Lines brother, who according to
them, were in a farm some
one kilometer away from the crime scene. The court held that ―It is axiomatic that the
accused interposing the defense of
MAMBULAO LUMBER COMPANY vs PHILIPPINE NATIONAL BANK timely called by herein appellant, and in disposing of the chattels in gross for the miserable
G.R. No. L-22973, January 30, 1968 amount of P4,200.00, herein appellant should be awarded exemplary damages in the sum
of P10,000.00. The circumstances of the case also warrant the award of P3,000.00 as
FACTS: attorney’s fees for herein appellant.
On May 5, 1956 the plaintiff applied for an industrial loan of P155,000 (approved for a loan
of P100,000 only) with the Naga Branch of defendant PNB. To secure payment, the
plaintiff mortgaged a parcel of land, together with the buildings and improvements existing
thereon, situated in the poblacion of Jose Panganiban (formerly Mambulao), province of
Camarines Norte. The PNB released from the approved loan the sum of P27,500, and
another release of P15,500.The plaintiff failed to pay the amortization on the amounts
released to and received by it. It was found that the plaintiff had already stopped operation
about the end of 1957 or early part of 1958.The unpaid obligation of the plaintiff as of
September 22, 1961, amounted to P57,646.59, excluding attorney’s fees. A foreclosure
sale of the parcel of land, together with the buildings and improvements thereon was, held
on November 21, 1961, and the said property was sold to the PNB for the sum of
P56,908.00, subject to the right of the plaintiff to redeem the same within a period of one
year. The plaintiff sent a letter reiterating its request that the foreclosure sale of the
mortgaged chattels be discontinued on the grounds that the mortgaged indebtedness had
been fully paid and that it could not be legally affected at a place other than the City of
Manila. The trial court sentenced the Mambulao Lumber Company to pay to the defendant
PNB the sum of P3,582.52 with interest thereon at the rate of 6% per annum. The plaintiff
on appeal advanced that its total indebtedness to the PNB as of November 21, 1961, was
only P56,485.87 and not P58,213.51 as concluded by the court a quo; hence, the
proceeds of the foreclosure sale of its real property alone in the amount of P56,908.00 on
that date, added to the sum of P738.59 it remitted to the PNB thereafter was more than
sufficient to liquidate its obligation, thereby rendering the subsequent foreclosure sale of
its. That for the acts of the PNB in proceeding with the sale of the chattels, in utter
disregard of plaintiff’s vigorous opposition thereto, and in taking possession thereof after
the sale thru force, intimidation, coercion, and by detaining its "man-in-charge" of said
properties,
the PNB is liable to plaintiff for damages and attorney's fees.

ISSUE:
Whether or not PNB may be held l
liable to plaintiff Corporation for damages and attorney’s fees.

HELD:
Herein appellant's claim for moral damages seems to have no legal or factual basis.
Obviously,
an artificial person like herein appellant corporation cannot experience physical sufferings,
mental anguish, fright, serious anxiety, wounded feelings, moral shock or social
humiliations which are basis of moral damages
. A corporation may have a good reputation which, if besmirched, may also be aground for
the award of moral damages. The same cannot be considered under the facts of this case,
however, not only because it is admitted that herein appellant had already ceased in its
business operation at the time of the foreclosure sale of the chattels, but also for the
reason that whatever adverse effects of the foreclosure sale of the chattels could have
upon its reputation or business standing would undoubtedly be the same whether the sale
was conducted at Jose Panganiban, Camarines Norte, or in Manila which is the place
agreed upon by the parties in the mortgage contract.

But for the wrongful acts of herein appellee bank and the deputy sheriff of Camarines
Norte in proceeding with the sale in utter disregard of the agreement to have the chattels
sold in Manila as provided for in the mortgage contract, to which their attentions were