Halley Vs Printwell
Halley Vs Printwell
Supreme Court
Manila
THIRD DIVISION
DONNINA C. HALLEY,
Petitioner,
-versus-
PRINTWELL, INC.,
May 30, 2011
Respondent.
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J:
Stockholders of a corporation are liable for the debts of the corporation up to the
extent of their unpaid subscriptions. They cannot invoke the veil of corporate
identity as a shield from liability, because the veil may be lifted to avoid
defrauding corporate creditors.
Weaffirm with modification the decisionpromulgated on August 14, 2002,
whereby the Court of Appeals(CA) upheld thedecision of the Regional Trial
Court, Branch 71, in Pasig City (RTC), [2]ordering the defendants (including the
petitioner)to pay to Printwell, Inc. (Printwell) the principal sum of P291,342.76
plus interest.
[1]
Antecedents
The petitioner wasan incorporator and original director of Business Media
Philippines, Inc. (BMPI), which, at its incorporation on November 12, 1987, [3]had
an authorized capital stock of P3,000,000.00 divided into 300,000 shares each with
a par value ofP10.00,of which 75,000 were initially subscribed, to wit:
Subscriber
Donnina C. Halley
Roberto V. Cabrera, Jr.
Albert T. Yu
Zenaida V. Yu
Rizalino C. Vineza
TOTAL
Unpaid Shares
P 262,500.00
P135,000.00
P135,000.00
P15,000.00
P15,000.00
P 562,500.00
The defendants filed a consolidated answer,[6]averring that they all had paid their
subscriptions in full; that BMPI had a separate personality from those of its
stockholders; thatRizalino C. Vieza had assigned his fully-paid up sharesto a
certain Gerardo R. Jacinto in 1989; andthat the directors and stockholders of BMPI
had resolved to dissolve BMPI during the annual meetingheld on February 5, 1990.
To prove payment of their subscriptions, the defendantstockholderssubmitted in
evidenceBMPI official receipt (OR) no. 217, OR no. 218, OR no. 220,OR no. 221,
OR no. 222, OR no. 223, andOR no. 227,to wit:
Receipt No.
217
218
220
221
222
223
227
Date
November 5, 1987
May 13, 1988
May 13, 1988
November 5, 1987
November 5, 1987
May 13, 1988
May 13, 1988
Name
Albert T. Yu
Albert T. Yu
Roberto V. Cabrera, Jr.
Roberto V. Cabrera, Jr.
Zenaida V. Yu
Zenaida V. Yu
Donnina C. Halley
Amount
P 45,000.00
P 135,000.00
P 135,000.00
P 45,000.00
P 5,000.00
P 15,000.00
P 262,500.00
The claim of individual defendants that they have fully paid their
subscriptions to defend[a]nt corporation, is not worthy of consideration, because:
a) in the case of defendants-spouses Albert and Zenaida Yu, it will be noted
that the alleged payment made on May 13, 1988 amounting
to P135,000.00, is covered by Official Receipt No. 218 (Exh. 2), whereas
the alleged payment made earlier on November 5, 1987, amounting
to P5,000.00, is covered by Official Receipt No. 222 (Exh. 3). This is
cogent proof that said receipts were belatedly issuedjust to suit their theory
since in the ordinary course of business, a receipt issued earlier must have
serial numbers lower than those issued on a later date. But in the case at
bar, the receipt issued on November 5, 1987 has serial numbers
(222) higher than those issued on a later date (May 13, 1988).
b) The claim that since there was no call by the Board of Directors of
defendant corporation for the payment of unpaid subscriptions will not be
a valid excuse to free individual defendants from liability. Since the
individual defendants are members of the Board of Directors of
defendantcorporation, it was within their exclusive power to prevent the
fulfillment of the condition, by simply not making a call for the payment
of the unpaid subscriptions. Their inaction should not work to their benefit
and unjust enrichment at the expense of plaintiff.
Assuming arguendo that the individual defendants have paid their unpaid
subscriptions, still, it is very apparent that individual defendants merely used the
corporate fiction as a cloak or cover to create an injustice; hence, the alleged
separate personality of defendant corporation should be disregarded (Tan Boon
Bee & Co., Inc. vs. Judge Jarencio, G.R. No. 41337, 30 June 1988).[14]
Applying the trust fund doctrine, the RTC declared the defendant stockholders
liable to Printwell pro rata, thusly:
Defendant Business Media, Inc. is a registered corporation (Exhibits A, A-1
to A-9), and, as appearing from the Articles of Incorporation, individual
defendants have the following unpaid subscriptions:
Names Unpaid Subscription
Donnina C. Halley P262,500.00
Roberto V. Cabrera, Jr. 135.000.00
Albert T. Yu 135,000.00
Zenaida V. Yu 15,000.00
Rizalino V. Vineza 15,000.00
-------------------Total P562,500.00
and it is an established doctrine that subscriptions to the capital stock of a
corporation constitute a fund to which creditors have a right to look for
satisfaction of their claims (Philippine National Bank vs. Bitulok Sawmill, Inc.,
23 SCRA 1366) and, in fact, a corporation has no legal capacity to release a
subscriber to its capital stock from the obligation to pay for his shares, and any
agreement to this effect is invalid (Velasco vs. Poizat, 37 Phil. 802).
The liability of the individual stockholders in the instant case shall be prorated as follows:
Names Amount
Donnina C. Halley P149,955.65
Roberto V. Cabrera, Jr. 77,144.55
Albert T. Yu 77,144.55
Zenaida V. Yu 8,579.00
Rizalino V. Vineza 8,579.00
-----------------Total P321,342.75[15]
Ruling of the CA
All the defendants, except BMPI, appealed.
Spouses Donnina and Simon Halley, andRizalinoVieza defined the following
errors committed by the RTC, as follows:
I.
THE TRIAL COURT ERRED IN HOLDING APPELLANTS-STOCKHOLDERS
LIABLE FOR THE LIABILITIES OF THE DEFENDANT CORPORATION.
II.
ASSUMING ARGUENDO THAT APPELLANTS MAY BE LIABLE TO THE
EXTENT OF THEIR UNPAID SUBSCRIPTION OF SHARES OF STOCK, IF
ANY, THE TRIAL COURT NONETHELESS ERRED IN NOT FINDING THAT
APPELLANTS-STOCKHOLDERS HAVE, AT THE TIME THE SUIT WAS
FILED, NO SUCH UNPAID SUBSCRIPTIONS.
On August 14, 2002, the CA affirmed the RTC, holding that the defendants resort
to the corporate personality would createan injustice becausePrintwell would
thereby be at a loss against whom it would assert the right to collect, viz:
Settled is the rule that when the veil of corporate fiction is used as a means of
perpetrating fraud or an illegal act or as a vehicle for the evasion of an existing
obligation, the circumvention of statutes, the achievements or perfection of
monopoly or generally the perpetration of knavery or crime, the veil with which
the law covers and isolates the corporation from the members or stockholders who
compose it will be lifted to allow for its consideration merely as an aggregation of
individuals (First Philippine International Bank vs. Court of Appeals, 252 SCRA
259). Moreover, under this doctrine, 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 obligations or to justify wrong (Claparols vs. CIR, 65 SCRA 613).
In the case at bench, it is undisputed that BMPI made several orders on credit
from appellee PRINTWELL involving the printing of business magazines,
wrappers and subscription cards, in the total amount of P291,342.76 (Record pp.
3-5, Annex A) which facts were never denied by appellants stockholders that they
owe appellee the amount of P291,342.76. The said goods were delivered to and
received by BMPI but it failed to pay its overdue account to appellee as well as
the interest thereon, at the rate of 20% per annum until fully paid. It was also
during this time that appellants stockholders were in charge of the operation of
BMPI despite the fact that they were not able to pay their unpaid subscriptions to
BMPI yet greatly benefited from said transactions. In view of the unpaid
subscriptions, BMPI failed to pay appellee of its liability, hence appellee in order
to protect its right can collect from the appellants stockholders regarding their
unpaid subscriptions. To deny appellee from recovering from appellants would
place appellee in a limbo on where to assert their right to collect from BMPI since
the stockholders who are appellants herein are availing the defense of corporate
fiction to evade payment of its obligations.[17]
BMPI that the unpaid subscriptions were fully paid by the appellants
stockholders. For it is a rule that a stockholder may be sued directly by creditors
to the extent of their unpaid subscriptions to the corporation (Keller vs. COB
Marketing, 141 SCRA 86).
Moreover, a corporation has no power to release a subscription or its capital stock,
without valuable consideration for such releases, and as against creditors, a
reduction of the capital stock can take place only in the manner and under the
conditions prescribed by the statute or the charter or the Articles of Incorporation.
(PNB vs. Bitulok Sawmill, 23 SCRA 1366).[18]
The CAdeclared thatthe inconsistency in the issuance of the ORs rendered the
claim of full payment of the subscriptions to the capital stock unworthy of
consideration; andheld that the veil of corporate fiction could be pierced when it
was used as a shield to perpetrate a fraud or to confuse legitimate issues, to wit:
Finally, appellants SPS YU, argued that the fact of full payment for the
unpaid subscriptions was incontrovertibly established by competent testimonial
and documentary evidence, namely Exhibits 1, 2, 3 & 4, which were never
disputed by appellee, clearly shows that they should not be held liable for
payment of the said unpaid subscriptions of BMPI.
The reliance is misplaced.
We are hereby reproducing the contents of the above-mentioned exhibits, to
wit:
Exh: 1 YU Official Receipt No. 217 dated November 5, 1987 amounting
to P45,000.00 allegedly representing the initial payment of subscriptions of
stockholder Albert Yu.
Exh: 2 YU Official Receipt No. 218 dated May 13, 1988 amounting
to P135,000.00 allegedly representing full payment of balance of
subscriptions of stockholder Albert Yu. (Record p. 352).
Exh: 3 YU Official Receipt No. 222 dated November 5, 1987 amounting
to P5,000.00 allegedly representing the initial payment of subscriptions of
stockholder Zenaida Yu.
Exh: 4 YU Official Receipt No. 223 dated May 13, 1988 amounting
to P15,000.00 allegedly representing the full payment of balance of
subscriptions of stockholder Zenaida Yu. (Record p. 353).
Based on the above exhibits, we are in accord with the lower courts findings
that the claim of the individual appellants that they fully paid their subscription to
the defendant BMPI is not worthy of consideration, because, in the case of
Spouses Halley and Vieza moved for a reconsideration, but the CA denied
their motion for reconsideration.
Issues
Only Donnina Halley has come to the Court to seek a further review,
positing the following for our consideration and resolution, to wit:
I.
THE COURT OF APPEALS ERRED IN AFFIRMING IN TOTO THE
DECISION THAT DID NOTSTATE THE FACTS AND THE LAW UPON
WHICH THE JUDGMENT WAS BASED BUT MERELY COPIED THE
CONTENTS OF RESPONDENTS MEMORANDUM ADOPTING THE SAME
AS THE REASON FOR THE DECISION
II.
THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE
REGIONAL TRIAL COURT WHICH ESSENTIALLY ALLOWED THE
PIERCING OF THE VEIL OF CORPORATE FICTION
III.
THE HONORABLE COURT OF APPEALS ERRED IN APPLYING THE
TRUST FUND DOCTRINE WHEN THE GROUNDS THEREFOR HAVE NOT
BEEN SATISFIED.
On the first error, the petitioner contends that the RTC lifted verbatim from the
memorandum of Printwell; and submits that the RTCthereby violatedthe
requirement imposed in Section 14, Article VIII of the Constitution [20] as well as in
Section 1,Rule 36 of theRules of Court,[21]to the effect that a judgment or final order
of a court should state clearly and distinctly the facts and the law on which it is
based. The petitioner claims that the RTCs violation indicated that the RTC did not
analyze the case before rendering its decision, thus denying her the opportunity to
analyze the decision; andthat a suspicion of partiality arose from the fact that the
RTC decision was but a replica of Printwells memorandum.She cites Francisco v.
Permskul,[22] in which the Court has stated that the reason underlying the
constitutional requirement, that every decision should clearly and distinctly state
the facts and the law on which it is based, is to inform the reader of how the court
has reached its decision and thereby give the losing party an opportunity to study
and analyze the decision and enable such party to appropriately assign the errors
committed therein on appeal.
On the second and third errors, the petitioner maintains that the CA and the RTC
erroneously pierced the veil of corporate fiction despite the absence of cogent
proof showing that she, as stockholder of BMPI, had any hand in transacting with
Printwell; thatthe CA and the RTC failed to appreciate the evidence that she had
fully paid her subscriptions; and the CA and the RTCwrongly relied on thearticles
of incorporation in determining the current list of unpaid subscriptions despite
the articles of incorporationbeing at best reflectiveonly of the pre-incorporation
status of BMPI.
As her submissions indicate, the petitioner assails the decisions of the CA on: (a)
the propriety of disregarding the separate personalities of BMPI and its
stockholdersby piercing the thin veil that separated them; and (b) the application of
the trust fund doctrine.
Ruling
I
The RTC did not violate
the Constitution and the Rules of Court
The contention of the petitioner, that the RTC merely copied the
memorandum of Printwell in writing its decision, and did not analyze the records
on its own, thereby manifesting a bias in favor of Printwell, is unfounded.
It is noted that the petition for review merely generally alleges that starting
from its page 5, the decision of the RTC copied verbatim the allegations of herein
Respondents in its Memorandum before the said court, as if the Memorandum was
the draft of the Decision of the Regional Trial Court of Pasig, [23]but fails to specify
either the portions allegedly lifted verbatim from the memorandum, or why she
regards the decision as copied. The omission renders thepetition for review
insufficient to support her contention, considering that the mere similarityin
language or thought between Printwells memorandum and the trial courts
decisiondid not necessarily justify the conclusion that the RTC simply lifted
verbatim or copied from thememorandum.
It is to be observed in this connection that a trial or appellate judge may
occasionally viewa partys memorandum or brief as worthy of due consideration
either entirely or partly. When he does so, the judgemay adopt and incorporatein
his adjudicationthe memorandum or the parts of it he deems suitable,and yet not be
guilty of the accusation of lifting or copying from the memorandum. [24] This
isbecause ofthe avowed objective of the memorandum to contribute in the proper
illumination and correct determination of the controversy.Nor is there anything
untoward in the congruence of ideas and views about the legal issues between
himself and the party drafting the memorandum.The frequency of similarities in
argumentation, phraseology, expression, and citation of authorities between the
decisions of the courts and the memoranda of the parties, which may be great or
small, can be fairly attributable tothe adherence by our courts of law and the legal
profession to widely knownor universally accepted precedents set in earlier judicial
actions with identical factual milieus or posing related judicial dilemmas.
We also do not agree with the petitioner that the RTCs manner of writing the
decisiondeprivedher ofthe opportunity to analyze its decisionas to be able to assign
errors on appeal. The contrary appears, considering that she was able to impute and
assignerrors to the RTCthat she extensively discussed in her appeal in the CA,
indicating her thorough analysis ofthe decision of the RTC.
Our own readingof the trial courts decision persuasively shows that the RTC
did comply with the requirements regarding the content and the manner of writing
a decision prescribed in the Constitution and the Rules of Court. The decision of
the RTC contained clear and distinct findings of facts, and stated the applicablelaw
and jurisprudence, fully explaining why the defendants were being held liable to
the plaintiff. In short, the reader was at once informed of the factual and legal
reasons for the ultimate result.
II
Corporate personality not to be used to foster injustice
Printwell impleaded the petitioner and the other stockholders of BMPI for
two reasons, namely: (a) to reach the unpaid subscriptions because it appeared that
such subscriptions were the remaining visible assets of BMPI; and (b) to avoid
multiplicity of suits.[25]
The petitionersubmits that she had no participation in the transaction
between BMPI and Printwell;that BMPI acted on its own; and that shehad no hand
in persuading BMPI to renege on its obligation to pay. Hence, she should not be
personally liable.
We rule against the petitioners submission.
Although a corporation has a personality separate and distinct from those of
its stockholders, directors, or officers,[26]such separate and distinct personality is
merely a fiction created by law for the sake of convenience and to promote the
ends of justice.[27]The corporate personality may be disregarded, and the individuals
composing the corporation will be treated as individuals, if the corporate entity is
being used as a cloak or cover for fraud or illegality;as a justification for a wrong;
as an alter ego, an adjunct, or a business conduit for the sole benefit of the
stockholders.[28] As a general rule, a corporation is looked upon as a legal entity,
unless and until sufficient reason to the contrary appears. Thus,the courts always
presume good faith, andfor that reason accord prime importance to the separate
personality of the corporation, disregarding the corporate personality only after the
wrongdoing is first clearly and convincingly established. [29]It thus behooves the
courts to be careful in assessing the milieu where the piercing of the corporate veil
shall be done.[30]
Although nowhere in Printwells amended complaint or in the testimonies
Printwell offered can it be read or inferred from that the petitioner was
instrumental in persuading BMPI to renege onits obligation to pay; or that
sheinduced Printwell to extend the credit accommodation by misrepresenting the
solvency of BMPI toPrintwell, her personal liability, together with that of her codefendants, remainedbecause the CA found her and the other defendant
stockholders to be in charge of the operations of BMPI at the time the unpaid
obligation was transacted and incurred, to wit:
In the case at bench, it is undisputed that BMPI made several orders on
credit from appellee PRINTWELL involving the printing of business magazines,
wrappers and subscription cards, in the total amount of P291,342.76 (Record pp.
3-5, Annex A) which facts were never denied by appellants stockholders that they
owe(d) appellee the amount of P291,342.76. The said goods were delivered to and
received by BMPI but it failed to pay its overdue account to appellee as well as
the interest thereon, at the rate of 20% per annum until fully paid. It was also
during this time that appellants stockholders were in charge of the operation of
BMPI despite the fact that they were not able to pay their unpaid subscriptions to
BMPI yet greatly benefited from said transactions. In view of the unpaid
subscriptions, BMPI failed to pay appellee of its liability, hence appellee in order
to protect its right can collect from the appellants stockholders regarding their
unpaid subscriptions. To deny appellee from recovering from appellants would
place appellee in a limbo on where to assert their right to collect from BMPI since
the stockholders who are appellants herein are availing the defense of corporate
fiction to evade payment of its obligations.[31]
Both the RTC and the CA applied the trust fund doctrineagainst the
defendant stockholders, including the petitioner.
The petitionerargues,
however,that
the trust
fund doctrinewas
inapplicablebecause she had already fully paid her subscriptions to the capital
stock of BMPI. She thus insiststhat both lower courts erred in disregarding the
evidence on the complete payment of the subscription, like receipts, income tax
returns, and relevant financial statements.
The petitioners argumentis devoid of substance.
The trust fund doctrineenunciates a
xxx rule that the property of a corporation is a trust fund for the payment of
creditors, but such property can be called a trust fund only by way of analogy or
metaphor. As between the corporation itself and its creditors it is a simple debtor,
and as between its creditors and stockholders its assets are in equity a fund for the
payment of its debts.[32]
The trust fund doctrine, first enunciated in the American case of Wood v.
Dummer,[33]was adopted in our jurisdiction inPhilippine Trust Co. v. Rivera,[34]where
thisCourt declared that:
It is established doctrine that subscriptions to the capital of a corporation
constitute a fund to which creditors have a right to look for satisfaction of their
claims and that the assignee in insolvency can maintain an action upon any unpaid
stock subscription in order to realize assets for the payment of its debts. (Velasco
vs. Poizat, 37 Phil., 802) xxx[35]
We clarify that the trust fund doctrineis not limited to reaching the
stockholders unpaid subscriptions. The scope of the doctrine when the corporation
is insolvent encompasses not only the capital stock, but also other property and
assets generally regarded in equity as a trust fund for the payment of corporate
debts.[36]All assets and property belonging to the corporation held in trust for the
benefit of creditors thatwere distributed or in the possession of the stockholders,
regardless of full paymentof their subscriptions, may be reached by the creditor in
satisfaction of its claim.
Also, under the trust fund doctrine,a corporation has no legal capacity to
release an original subscriber to its capital stock from the obligation of paying for
his shares, in whole or in part,[37] without a valuable consideration,[38] or
fraudulently, to the prejudice of creditors.[39]The creditor is allowed to maintain an
action upon any unpaid subscriptions and thereby steps into the shoes of the
corporation for the satisfaction of its debt.[40]To make out a prima facie case in a
suit against stockholders of an insolvent corporation to compel them to contribute
to the payment of its debts by making good unpaid balances upon their
subscriptions, it is only necessary to establish that thestockholders have not in good
faith paid the par value of the stocks of the corporation.[41]
The petitionerposits that the finding of irregularity attending the issuance of
the receipts (ORs) issued to the other stockholders/subscribers should not affect her
becauseher receipt did not suffer similar irregularity.
Notwithstanding that the RTC and the CA did not find any irregularity in the
OR issued in her favor,we still cannot sustain the petitioners defense of full
payment of her subscription.
In civil cases, theparty who pleads payment has the burden of proving it, that
even where the plaintiff must allege nonpayment, the general rule is that the burden
rests on the defendant to prove payment, rather than on the plaintiff to prove
nonpayment. In other words, the debtor bears the burden of showing with legal
certainty that the obligation has been discharged by payment.[42]
Apparently, the petitioner failed to discharge her burden.
A receipt is the written acknowledgment of the fact of payment in money or
other settlement between the seller and the buyer of goods, thedebtor or
thecreditor, or theperson rendering services, and theclient or thecustomer.
[43]
Althougha receipt is the best evidence of the fact of payment, it isnot conclusive,
of her subscription. Indeed, she could not even inform the trial court about the
identity of her drawee bank,[49]and about whether the check was cleared and its
amount paid to BMPI.[50]In fact, she did not present the check itself.
Theincome tax return (ITR) and statement of assets and liabilities of BMPI,
albeit presented, had no bearing on the issue of payment of the subscription
because they did not by themselves prove payment. ITRsestablish ataxpayers
liability for taxes or a taxpayers claim for refund. In the same manner, the deposit
slips and entries in the passbook issued in the name of BMPI were hardly
relevant due to their not reflecting the alleged payments.
It is notable, too, that the petitioner and her co-stockholders did not support
their allegation of complete payment of their respective subscriptions with the
stock and transfer book of BMPI. Indeed, books and records of a corporation
(including the stock and transfer book) are admissible in evidence in favor of or
against the corporation and its members to prove the corporate acts, its financial
status and other matters (like the status of the stockholders), and are ordinarily the
best evidence of corporate acts and proceedings.[51]Specifically, a stock and transfer
book is necessary as a measure of precaution, expediency, and convenience
because it provides the only certain and accurate method of establishing the
various corporate acts and transactions and of showing the ownership of stock and
like matters.[52]That she tendered no explanation why the stock and transfer book
was not presented warrants the inference that the book did not reflect the actual
payment of her subscription.
Nor did the petitioner present any certificate of stock issued by BMPI to her.
Such a certificate covering her subscription might have been a reliable evidence of
full payment of the subscriptions, considering that under Section 65 of
the Corporation Code a certificate of stock issues only to a subscriber who has
fully paid his subscription. The lack of any explanation for the absence of a stock
certificate in her favor likewise warrants an unfavorable inference on the issue of
payment.
Lastly, the petitioner maintains that both lower courts erred in relying on
the articles of incorporationas proof of the liabilities of the stockholders
The RTC declared the stockholders pro rata liable for the debt(based on the
proportion to their shares in the capital stock of BMPI); and held the
petitionerpersonally liable onlyin the amount of P149,955.65.
We do not agree. The RTC lacked the legal and factual support for its
prorating the liability. Hence, we need to modify the extent of the petitioners
personal liability to Printwell. The prevailing rule is that a stockholder is
personally liable for the financial obligations of the corporation to the extent of his
unpaid subscription.[53]In view ofthe petitioners unpaid subscription being
worthP262,500.00, shewas liable up to that amount.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
CONCHITA CARPIOMORALES
Associate Justice
Chairperson
C E R T I F I C AT I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
[1]
Penned by Associate Justice Mercedes Gozo-Dadole, with Associate Justices Salvador J. Valdez, Jr. and Amelita
G. Tolentino concurring, rollo, pp. 36-49.
[2]
Entitled Printwell, Inc. v. Business Media Phils., Inc., Donnina C. Halley and Simon Halley, Roberto V. Cabrera,
Jr., Albert T. Yu, Zenaida V. Yu, and Rizalino C. Vineza, rollo, pp. 222-230.
[3]
Id., p. 109.
[4]
Records, pp. 6-7.
[5]
Id., pp. 12-16.
[6]
Id., pp. 25-28.
[7]
Id., p. 253.
[8]
Id., p. 254.
[9]
Id., p. 255.
[10]
Id., pp. 256-259.
[11]
Id., pp. 260-265.
[12]
Id., pp. 266-272.
[13]
Id., pp. 273-276.
[14]
Id., pp. 369-370.
[15]
Id., pp. 368-369
[16]
Records, p. 371.
[17]
Rollo, p. 45.
[18]
Id., pp. 46-47.
[19]
Rollo, pp. 47-49.
[20]
Section 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts
and the law on which it is based.
xxx
[21]
Section 1. Rendition of judgments and final orders.A judgment or final order determining the merits of the case
shall be in writing personally and directly prepared by the judge,stating clearly and distinctly the facts and the
law on which it is based, signed by him, and filed with the clerk of the court.
[22]
G.R. No. 81006, May 12, 1989, 173 SCRA 324.
[23]
Rollo, p. 23.
[24]
See, for instance, Bank of the Philippine Islands v. Leobrera, G.R. No. 137147, January 29, 2002, 375 SCRA 81,
86 (where the Court declared that although it was not good practice, there was nothing illegal in the act of the trial
court completely copying the memorandum submitted by a party provided that the decision clearly and distinctly
stated sufficient findings of fact and the law on which it was based).
[25]
Rollo, p. 55.
[26]
Section 2, Corporation Code; Article 44 (3), Civil Code; Francisco Motors Corporation v. Court of Appeals,
G.R. No. 100812, June 25, 1999, 309 SCRA 72, 82.
[27]
Prudential Bank v. Alviar, G.R. No. 150197, July 28, 2005, 464 SCRA 353, 362; Martinez v. Court of Appeals,
G.R. No. 131673, September 10, 2004, 438 SCRA 130, 149-150.
[28]
Light Rail Transit Authority v. Venus, Jr., G.R. No. 163782, March 24, 2006, 485 SCRA 361, 372;R&E
Transport, Inc. v. Latag, G.R. No. 155214, February 13, 2004, 422 SCRA 698; Secosa v. Heirs of Erwin Suarez
Francisco, G.R. No. 160039, June 29, 2004, 433 SCRA 273;Gochan v. Young, G.R. No. 131889, March 12, 2001,
354 SCRA 207, 222;Development Bank of the Philippines v. Court of Appeals, G.R. No. 110203, May 9, 2001, 357
SCRA 626; Del Rosario v. National Labor Relations Commission, G.R. No. 85416, July 24, 1990, 187 SCRA 777,
780.
[29]
Solidbank Corporation v. Mindanao Ferroalloy Corporation, G.R. No. 153535, July 28, 2005, 464 SCRA 409,
424-425; Construction & Development Corporation of the Philippines v. Cuenca, G.R. No. 163981, August 12,
2005, 466 SCRA 714, 727; Matuguina Integrated Wood Products, Inc. v. Court of Appeals, G.R. No. 98310, October
24, 1996, 263 SCRA 490, 509.
[30]
Francisco Motors Corporation v. Court of Appeals, supra, note 26.
[31]
Rollo, p. 45.
[32]
42A, Words and Phrases, Trust Fund Doctrine, p. 445, citing McIver v. Young Hardware Co., 57 S.E. 169, 171,
144 N.C. 478, 119 Am. St. Rep. 970; Gallagher v. Asphalt Co. of America, 55 A. 259, 262, 65 N.J. Eq. 258.
[33]
3 Mason 308, Fed Cas. No. 17, 944.
[34]
44 Phil 469 (1923).
[35]
Id., p. 470.
[36]
Villanueva, Philippine Corporate Law (2001), pp. 558, citing Chicago Rock Island & Pac. R.R. Co. v. Howard, 7
Wall., 392, 19 L. Ed. 117; Sawyer v. Hoag, 17 Wall 610, 21 L. Ed. 731; and Pullman v. Upton, 96 U.S. 328, 24 L.
Ed. 818.
[37]