Mambulao Lumber Company Vs - Norte Riff
Mambulao Lumber Company Vs - Norte Riff
vs
.
Norte
riff
were
its
to have the
sawmill Camarines together with the
well as
e, and oth in
of tioned el of land,
pr
, and covered demands
refused
various
made erwise
by TC improvements thereon its obligation but it failed or otherwise refused 1 of
sale of the parc peatcovered
as
the
973ed in it ds of
by TCT No plaintiff to pay its obligation but it failed or
The Plaintiff opposed. The foreclosure
assets of the plai of NB initiated steps as well as various sawmill equipment, rolling unit
and other fixed operation. 38, w plaintiff to pay its obligation but it failed or otherwise refused
Camarines Norte, and covered by TCT No
ed
had already stopped Camarines Norte s compound in the aforementioned municipality.
as held and the said prop381 of the land records of said province, as well as various
sawmill equipment, rolling unit and other fixed assets of the plaintiff, all situated in its
compound in the aforementioned municipality.
plaintiff to payPNB released from to do so. Upon inspection and verification made by the
properties to Mariano Bundok. The Security guard of the properties refused to let PNB’s
successor in interest to retrieve properties inside the premis
the approved loan the sum of P27, 500.00, for which the plaintiff signed a promissory note
wherein it promised to pay to the PNB. PNB made another release of P15, 500.00 as part of the
approved loan granted to the plaintiff and so on the said date, the latter executed another
promissory note. Plaintiff failed to pay the es of the property bought by them.
RTC sentenced the Mambulao Lumber Company to pay to the defendant PNB.
Mambulao therefore appealed.
employees of the PNB, it was found that the plaintiff erty 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.
PNB sold
ISSUE:
Plaintiff applied for an industrial loan of P155, 000.00 with the PNB and the former offered real
estate, machinery, logging and transportation equipment as collaterals. The application was
approved for a loan of P100, 000.00 only. To secure the payment of the loan, the plaintiff
mortgaged to defendant PNB a parcel of land, together with the buildings and improvements
existing thereon, situated in the province
RULING:
NO.
FACTS:
A contract was entered into between Hydro and NIA for the project of the latter. The
contract price is to be payable partly in Philippine peso and US dollars. Once the project was
being executed, there was depreciation in value of Peso resulting to price differential. In order to
resolve the issue, the administrator of NIA, Mr Tek, and Hydro made a joint computation of the
amount corresponding to the foreign currency differential. The computation showed that NIA
owed Hydro for the differential. When a demand was made by Hydro against NIA, NIA refused
to pay contending that Mr Tek has no authority to participate into a joint computation of the
foreign currency differential and that Mr Tek has no authority to bind NIA.
ISSUE:
Whether or not the corporate entity of PNB and DBP must be pierced.
RULING:
NO.
FACTS:
Mar Fishing Co., Inc. (Mar Fishing), engaged in the business of fishing and canning of
tuna, sold its principal assets to co-respondent Miramar through public bidding. Proceeds of the
sale were paid to the Trade and Investment Corp. to cover Mar Fishing’s outstanding obligation
in the amount of ₱ 897,560,041.00.
In view of that transfer, Mar Fishing issued a Memorandum informing all its workers that
the company would cease to operate by the end of the month. It notified the DOLE of the closure
of its business operations. Then, Mar Fishing’s labor union, Mar Fishing Workers Union –
NFL – and Miramar entered into a Memorandum of Agreement for the acquiring company,
Miramar, to absorb Mar Fishing’s regular rank and file employees whose performance was
satisfactory, without loss of seniority rights and privileges previously enjoyed. Unfortunately,
petitioners, who worked as rank and file employees, were not hired or given separation pay by
Miramar, so they filed Complaints for illegal dismissal with money claims before the Arbitration
Branch of the NLRC.
ISSUE:
RULING:
NO.
Mar Fishing, and not Miramar, is required to compensate petitioners. Indeed, the back
wages and retirement pay earned from the former employer cannot be filed against the new
owners or operators of an enterprise.
Miramar and Mar Fishing are separate and distinct entities, based on the marked
differences in their stock ownership. Also, the fact that Mar Fishing’s officers remained as such
in Miramar does not by itself warrant a conclusion that the two companies are one and the same.
The mere showing that the corporations had a common director sitting in all the boards without
more does not authorize disregarding their separate juridical personalities.
Neither can the veil of corporate fiction between the two companies be pierced by the rest
of petitioners’ submissions, namely, the alleged take-over by Miramar of Mar Fishing’s
operations and the evident similarity of their businesses. Since piercing the veil of corporate
fiction is frowned upon, those who seek to pierce the veil must clearly establish that the separate
and distinct personalities of the corporations are set up to justify a wrong, protect a fraud, or
perpetrate a deception. This, unfortunately, petitioners have failed to do.
FACTS:
Private respondent April Toy, Inc. is a domestic corporation, for the purpose of
"manufacturing, importing, exporting, buying , selling, sub-contracting or otherwise dealing in,
at wholesale and retail," stuffed toys. On December 20, 1989, or after almost a year of operation,
April posted a memorandum 2 within its premises and circulated a copy of the same among its
employees informing them of its dire financial condition. April decided to shorten its corporate
term "up to February 28, 1990,”
In view of April's cessation of operations, petitioners who initially composed of seventy-
seven employees below filed a complaint for "illegal shutdown/retrenchment/dismissal and
unfair labor practice." On June 21, 1990, petitioners amended their complaint to implead private
respondent Well World Toys, Inc. (Well World for brevity), a corporation also engaged in the
manufacture of stuffed toys for export.
Petitioners further alleged that the original incorporators and principal officers of April
were likewise the original incorporators of Well World, thus both corporations should be treated
as one corporation liable for their claims. The Labor Arbiter found as valid the closure of April,
and treated April and Well World as two distinct corporations.
ISSUE:
RULING:
YES.
The two corporations have two different set of officers managing their respective affairs
in two separate offices. It is basic that a corporation is invested by law with a personality
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 substantial identity of the incorporators of the two
corporations does not necessarily imply fraud, 15 nor warrant the piercing of the veil of
corporate fiction. In the absence of clear and convincing evidence that April and Well World's
corporate personalities were used to perpetuate fraud, or circumvent the law said corporations
were rightly treated as distinct and separate from each other.
DEVELOPMENT BANK OF THE PHILIPPINES
vs.
COURT OF APPEALS, REMINGTON INDUSTRIAL SALES
GR 126200, 16 August 2001
FACTS:
Between July 1981 and April 1984, Marinduque Mining entered into 3 mortgage
agreements with PNB and DBP involving its real properties located in Surigao del Norte, Negros
Occidental, and Rizal, as well as its equipments located therein. Marinduque failed to pay its
loans, causing the foreclosure of the said mortgages. PNB and DBP thereafter gained control of
the said properties.
In the meantime, between July 16, 1982 to October 4, 1983, Marinduque Mining
purchased and caused to be delivered construction materials and other merchandise from
Remington Industrial Sales Corporation. The purchases remained unpaid as of August 1, 1984
when Remington filed a complaint for a sum of money and damages against Marinduque Mining
for the value of the unpaid construction materials and other merchandise purchased by
Marinduque Mining, as well as interest, attorney’s fees and the costs of suit.
Remington’s original complaint was amended to include PNB, DBP, Maricalum Mining
Corporation and Island Cement Corporation as co-defendants. Remington asserted that
Marinduque Mining, PNB, DBP, Nonoc Mining, Maricalum Mining and Island Cement must be
treated in law as one and the same entity by disregarding the veil of corporate fiction since the
personnel, key officers and rank-and-file workers and employees of co-defendants NMIC,
Maricalum and Island Cement creations of co-defendants PNB and DBP were the personnel of
co-defendant MMIC such that practically there has only been a change of name for all legal
purpose and intents.
ISSUE:
Is the take-over of PNB and DBP over Marinduque Mining in bad faith.
RULING:
NO.
Their actions are mandated under the law. Where the corporations have directors and
officers in common, there may be circumstances under which their interest as officers in one
company may disqualify them in equity from representing both corporations in transactions
between the two. Thus, where one corporation was ‘insolvent and indebted to another, it has
been held that the directors of the creditor corporation were disqualified, by reason of self-
interest, from acting as directors of the debtor corporation in the authorization of a mortgage or
deed of trust to the former to secure such indebtedness In the same manner that when the
corporation is insolvent, its directors who are its creditors cannot secure to themselves any
advantage or preference over other creditors. They cannot thus take advantage of their fiduciary
relation and deal directly with themselves, to the injury of others in equal right.
Directors of insolvent corporation, who are creditors of the company, can not secure to
themselves any preference or advantage over other creditors in the payment of their claims. It is
not good morals or good law. The governing body of officers thereof are charged with the duty
of conducting its affairs strictly in the interest of its existing creditors, and it would be a breach
of such trust for them to undertake to give any one of its members any advantage over any other
creditors in securing the payment of his debts in preference to all others. When validity of these
mortgages, to secure debts upon which the directors were indorsers, was questioned by other
creditors of the corporation, they should have been classed as instruments rendered void by the
legal principle which prevents directors of an insolvent corporation from giving themselves a
preference over outside creditors.