WPM International Trading, Inc. vs. Labayen

3/7/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 735
September 17, 2014.*

G.R. No. 182770.

WPM INTERNATIONAL TRADING, INC. and WARLITO
P. MANLAPAZ, petitioners, vs. FE CORAZON LABAYEN,
respondent.
Remedial Law; Civil Procedure; Appeals; Corporations; The

question of whether a corporation is a mere instrumentality or
alter
_______________
* SECOND DIVISION.
298
298 SUPREME COURT REPORTS ANNOTATED

WPM International Trading, Inc. vs. Labayen
ego of another is purely one of fact.—We note, at the outset, that

the question of whether a corporation is a mere instrumentality or
alter ego of another is purely one of fact. This is also true with
respect to the question of whether the totality of the evidence
adduced by the respondent warrants the application of the
piercing the veil of corporate fiction doctrine. Generally, factual
findings of the lower courts are accorded the highest degree of
respect, if not finality. When adopted and confirmed by the CA,
these findings are final and conclusive and may not be reviewed
on appeal, save in some recognized exceptions among others,
when the judgment is based on misapprehension of facts.
Corporations; Separate Personality; The rule is settled that a
corporation has a personality separate and distinct from the
persons acting for and in its behalf and, in general, from the
people comprising it.—The rule is settled that a corporation has a
personality separate and distinct from the persons acting for and
in its behalf and, in general, from the people comprising it.
Following this principle, the obligations incurred by the corporate
officers, or other persons acting as corporate agents, are the direct
accountabilities of the corporation they represent, and not theirs.
Thus, a director, officer or employee of a corporation is generally
central.com.ph/sfsreader/session/00000178099640ccd48a2d0a003600fb002c009e/t/?o=False 1/14
not held personally liable for obligations incurred by the

corporation; it is only in exceptional circumstances that solidary
liability will attach to them.
Same; Piercing the Corporate Veil; The doctrine of piercing the
corporate veil applies only in three (3) basic instances.—
Incidentally, the doctrine of piercing the corporate veil applies
only in three (3) basic instances, namely: a) when the separate
and distinct corporate personality defeats public convenience, as
when the corporate fiction is used as a vehicle for the evasion of
an existing obligation; b) in fraud cases, or when the corporate
entity is used to justify a wrong, protect a fraud, or defend a
crime; or c) is used in alter ego cases, i.e., where a
corporation is essentially a farce, since it is a mere alter
ego or business conduit of a person, or where the
corporation is so organized and controlled and its affairs
so conducted as to make it merely an instrumentality,
agency, conduit or adjunct of another corporation.
299
VOL. 735, SEPTEMBER 17, 2014 299

Same; Same; Alter-Ego Theory; Piercing the corporate veil

based on the alter ego theory requires the concurrence of three (3)
elements; The absence of any of these elements prevents piercing
the corporate veil.—Piercing the corporate veil based on the alter
ego theory requires the concurrence of three elements, namely: (1)
Control, not mere majority or complete stock control, but complete
domination, not only of finances but of policy and business
practice in respect to the transaction attacked so that the
corporate entity as to this transaction had at the time no separate
mind, will or existence of its own; (2) Such control must have been
used by the defendant to commit fraud or wrong, to perpetuate
the violation of a statutory or other positive legal duty, or
dishonest and unjust act in contravention of plaintiff’s legal right;
and (3) The aforesaid control and breach of duty must have
proximately caused the injury or unjust loss complained of. The
absence of any of these elements prevents piercing the corporate
veil.
Same; Same; Same; Separate Personality; As held in Martinez
v. Court of Appeals, 438 SCRA 130 (2004), the mere ownership by
a single stockholder of even all or nearly all of the capital stocks of
a corporation is not by itself a sufficient ground to disregard the
separate corporate personality.—Aside from the fact that
Manlapaz was the principal stockholder of WPM, records do not
show that WPM was organized and controlled, and its affairs
conducted in a manner that made it merely an instrumentality,

agency, conduit or adjunct of Manlapaz. As held in Martinez v.
Court of Appeals, 438 SCRA 130 (2004), the mere ownership by a
single stockholder of even all or nearly all of the capital stocks of a
corporation is not by itself a sufficient ground to disregard the
separate corporate personality. To disregard the separate juridical
personality of a corporation, the wrongdoing must be clearly and
convincingly established.
Same; Same; Same; The control necessary to invoke the
instrumentality or alter ego rule is not majority or even complete
stock control but such domination of finances, policies and
practices that the controlled corporation has, so to speak, no
separate mind, will or existence of its own, and is but a conduit for
its principal.—We stress that the control necessary to invoke the
instrumentality or alter ego rule is not majority or even complete
stock control but such domination of finances, policies and
practices that the controlled corporation has, so to speak, no
separate mind, will or existence of its own, and is
300

but a conduit for its principal. The control must be shown to have
been exercised at the time the acts complained of took place.
Moreover, the control and breach of duty must proximately cause
the injury or unjust loss for which the complaint is made.
Same; Same; The piercing of the veil of corporate fiction is
frowned upon and thus, must be done with caution.—We
emphasize that the piercing of the veil of corporate fiction is
frowned upon and thus, must be done with caution. It can only be
done if it has been clearly established that the separate and
distinct personality of the corporation is used to justify a wrong,
protect fraud, or perpetrate a deception. The court must be
certain that the corporate fiction was misused to such an extent
that injustice, fraud, or crime was committed against another, in
disregard of its rights; it cannot be presumed.
Civil Law; Damages; Moral Damages; Under Article 2220 of
the New Civil Code, moral damages may be awarded in cases of a
breach of contract where the defendant acted fraudulently or in
bad faith or was guilty of gross negligence amounting to bad faith.
—On the award of moral damages, we find the same in order in
view of WPM’s unjustified refusal to pay a just debt. Under
Article 2220 of the New Civil Code, moral damages may be
awarded in cases of a breach of contract where the defendant
acted fraudulently or in bad faith or was guilty of gross negligence

amounting to bad faith. In the present case, when payment for
the balance of the renovation cost was demanded, WPM, instead
of complying with its obligation, denied having authorized the
respondent to contract in its behalf and accordingly refused to
pay. Such cold refusal to pay a just debt amounts to a breach of
contract in bad faith, as contemplated by Article 2220. Hence, the
CA’s order to pay moral damages was in order.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
John Alex A. Villena for petitioners.
Carlos Mayorico E. Caliwara for respondent.
301
VOL. 735, SEPTEMBER 17, 2014 301

BRION, J.:
We review in this petition for review on certiorari1 the
decision2 dated September 28, 2007 and the resolution3
dated April 28, 2008 of the Court of Appeals (CA) in C.A.-
G.R. CV No. 68289 that affirmed with modification the
decision4 of the Regional Trial Court (RTC), Branch 77,
Quezon City.

The Factual Background
The respondent, Fe Corazon Labayen, is the owner of
H.B.O. Systems Consultants, a management and
consultant firm. The petitioner, WPM International
Trading, Inc. (WPM), is a domestic corporation engaged in
the restaurant business, while Warlito P. Manlapaz
(Manlapaz) is its president.
Sometime in 1990, WPM entered into a management
agreement with the respondent, by virtue of which the
respondent was authorized to operate, manage and
rehabilitate Quickbite, a restaurant owned and operated by
WPM. As part of her tasks, the respondent looked for a
contractor who would renovate the two existing Quickbite
outlets in Divisoria, Manila and Lepanto St., University
Belt, Manila. Pursuant to the agreement, the respondent
engaged the services of CLN Engineering Services (CLN) to
renovate Quickbite-Divisoria at the cost of P432,876.02.
On June 13, 1990, Quickbite-Divisoria’s renovation was
finally completed, and its possession was delivered to the
respondent. However, out of the P432,876.02 renovation

cost,
_______________
1 Under Rule 45 of the Rules of Court; Rollo, pp. 29-38.

2 Rollo, pp. 8-24; penned by Associate Justice Ramon R. Garcia, and
concurred in by Associate Justices Josefina Guevara-Salonga, and Vicente
Q. Roxas.
3 Id., at pp. 26-27.
4 Id., at pp. 54-60; penned by Judge Vivencio S. Baclig dated April 19,
2000.
302

only the amount of P320,000.00 was paid to CLN, leaving a

balance of P112,876.02.
Complaint for Sum of Money (Civil Case No. Q-90-7013)
On October 19, 1990, CLN filed a complaint for sum of
money and damages before the RTC against the respondent
and Manlapaz, which was docketed as Civil Case No. Q-90-
7013. CLN later amended the complaint to exclude
Manlapaz as defendant. The respondent was declared in
default for her failure to file a responsive pleading.
The RTC, in its January 28, 1991 decision, found the
respondent liable to pay CLN actual damages in the
amount of P112,876.02 with 12% interest per annum from
June 18, 1990 (the date of first demand) and 20% of the
amount recoverable as attorney’s fees.
Complaint for Damages (Civil Case No. Q-92-13446)
Thereafter, the respondent instituted a complaint for
damages against the petitioners, WPM and Manlapaz. The
respondent alleged that in Civil Case No. Q-90-7013, she
was adjudged liable for a contract that she entered into for
and in behalf of the petitioners, to which she should be
entitled to reimbursement; that her participation in the
management agreement was limited only to introducing
Manlapaz to Engineer Carmelo Neri (Neri), CLN’s general
manager; that it was actually Manlapaz and Neri who
agreed on the terms and conditions of the agreement; that
when the complaint for damages was filed against her, she
was abroad; and that she did not know of the case until she
returned to the Philippines and received a copy of the
decision of the RTC.
In her prayer, the respondent sought indemnification in

the amount of P112,876.60 plus interest at 12% per annum
from June 18, 1990 until fully paid; and 20% of the award
as attorney’s fees. She likewise prayed that an award of
303
VOL. 735, SEPTEMBER 17, 2014 303

P100,000.00 as moral damages and P20,000.00 as

attorney’s fees be paid to her.
In his defense, Manlapaz claims that it was his fellow
incorporator/director Edgar Alcansaje who was in-charge
with the daily operations of the Quickbite outlets; that
when Alcansaje left WPM, the remaining directors were
compelled to hire the respondent as manager; that the
respondent had entered into the renovation agreement
with CLN in her own personal capacity; that when he
found the amount quoted by CLN too high, he instructed
the respondent to either renegotiate for a lower price or to
look for another contractor; that since the respondent had
exceeded her authority as agent of WPM, the renovation
agreement should only bind her; and that since WPM has a
separate and distinct personality, Manlapaz cannot be
made liable for the respondent’s claim.
Manlapaz prayed for the dismissal of the complaint for
lack of cause of action, and by way of counterclaim, for the
award of P350,000.00 as moral and exemplary damages
and P50,000.00 attorney’s fees.
The RTC, through an order dated March 2, 1993
declared WPM in default for its failure to file a responsive
pleading.
The Decision of the RTC
In its decision, the RTC held that the respondent is
entitled to indemnity from Manlapaz. The RTC found that
based on the records, there is a clear indication that WPM
is a mere instrumentality or business conduit of Manlapaz
and as such, WPM and Manlapaz are considered one and
the same. The RTC also found that Manlapaz had complete
control over WPM considering that he is its chairman,
president and treasurer at the same time. The RTC thus
concluded that Manlapaz is liable in his personal capacity
to reimburse the respondent the amount she paid to CLN
in connection with the renovation agreement.
304

The petitioners appealed the RTC decision with the CA.

There, they argued that in view of the respondent’s act of
entering into a renovation agreement with CLN in excess
of her authority as WPM’s agent, she is not entitled to
indemnity for the amount she paid. Manlapaz also
contended that by virtue of WPM’s separate and distinct
personality, he cannot be made solidarily liable with WPM.
The Ruling of the Court of Appeals
On September 28, 2007, the CA affirmed, with
modification on the award of attorney’s fees, the decision of
the RTC. The CA held that the petitioners are barred from
raising as a defense the respondent’s alleged lack of
authority to enter into the renovation agreement in view of
their tacit ratification of the contract.
The CA likewise affirmed the RTC ruling that WPM and
Manlapaz are one and the same based on the following: (1)
Manlapaz is the principal stockholder of WPM; (2)
Manlapaz had complete control over WPM because he
concurrently held the positions of president, chairman of
the board and treasurer, in violation of the Corporation
Code; (3) two of the four other stockholders of WPM are
employed by Manlapaz either directly or indirectly; (4)
Manlapaz’s residence is the registered principal office of
WPM; and (5) the acronym “WPM” was derived from
Manlapaz’s initials. The CA applied the principle of
piercing the veil of corporate fiction and agreed with the
RTC that Manlapaz cannot evade his liability by simply
invoking WPM’s separate and distinct personality.
After the CA’s denial of their motion for reconsideration,
the petitioners filed the present petition for review on
certiorari under Rule 45 of the Rules of Court.
The Petition
The petitioners submit that the CA gravely erred in
sustaining the RTC’s application of the principle of piercing
the
305
VOL. 735, SEPTEMBER 17, 2014 305

veil of corporate fiction. They argue that the legal fiction of

corporate personality could only be discarded upon clear
and convincing proof that the corporation is being used as a
shield to avoid liability or to commit a fraud. Since the

respondent failed to establish that any of the circumstances
that would warrant the piercing is present, Manlapaz
claims that he cannot be made solidarily liable with WPM
to answer for damages allegedly incurred by the
respondent.
The petitioners further argue that, assuming they may
be held liable to reimburse to the respondent the amount
she paid in Civil Case No. Q-90-7013, such liability is only
limited to the amount of P112,876.02, representing the
balance of the obligation to CLN, and should not include
the twelve 12% percent interest, damages and attorney’s
fees.
The Issues
The core issues are: (1) whether WPM is a mere
instrumentality, alter ego, and business conduit of
Manlapaz; and (2) whether Manlapaz is jointly and
severally liable with WPM to the respondent for
reimbursement, damages and interest.
Our Ruling
We find merit in the petition.
We note, at the outset, that the question of whether a
corporation is a mere instrumentality or alter ego of
another is purely one of fact.5 This is also true with respect
to the question of whether the totality of the evidence
adduced by the respondent warrants the application of the
piercing the veil of corporate fiction doctrine.6
_______________
5 Heirs of Ramon Durano, Sr. v. Uy, 398 Phil. 125, 157; 344 SCRA 238,
266 (2000).
6 Saverio v. Puyat, G.R. No. 186433, November 27, 2013, 710 SCRA
747, 756.
306

Generally, factual findings of the lower courts are

accorded the highest degree of respect, if not finality. When
adopted and confirmed by the CA, these findings are final
and conclusive and may not be reviewed on appeal,7 save in
some recognized exceptions8 among others, when the
judgment is based on misapprehension of facts.

We have reviewed the records and found that the

application of the principle of piercing the veil of corporate
fiction is unwarranted in the present case.
On the Application of the Principle
of Piercing the Veil of Corporate Fiction
The rule is settled that a corporation has a personality
separate and distinct from the persons acting for and in its
_______________
7 Garong v. People, 538 Phil. 296, 306; 508 SCRA 446, 455 (2006).
8 See Samaniego-Celada v. Abena, 579 Phil. 60, 66; 556 SCRA 569, 576
(2008):
xxxx
(1) when the conclusion is a finding grounded entirely on speculation,
surmises and conjectures;
(2) when the inference made is manifestly mistaken, absurd or
impossible;
(3) where there is a grave abuse of discretion;
(4) when the judgment is based on a misapprehension of facts;
(5) when the findings of fact are conflicting;
(6) when the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both
appellant and appellee;
(7) when the findings are contrary to those of the trial court;
(8) when the findings of fact are conclusions without citation of specific
evidence on which they are based;
(9) when the facts set forth in the petition as well as in the petitioners’
main and reply briefs are not disputed by the respondents; and
(10) when the findings of fact of the Court of Appeals are premised on
the supposed absence of evidence and contradicted by the evidence on
record.
307
VOL. 735, SEPTEMBER 17, 2014 307

behalf and, in general, from the people comprising it.9

Following this principle, the obligations incurred by the
corporate officers, or other persons acting as corporate
agents, are the direct accountabilities of the corporation
they represent, and not theirs. Thus, a director, officer or
employee of a corporation is generally not held personally
liable for obligations incurred by the corporation;10 it is
only in exceptional circumstances that solidary liability
will attach to them.
Incidentally, the doctrine of piercing the corporate veil

applies only in three (3) basic instances, namely: a) when
the separate and distinct corporate personality defeats
public convenience, as when the corporate fiction is used as
a vehicle for the evasion of an existing obligation; b) in
fraud cases, or when the corporate entity is used to justify
a wrong, protect a fraud, or defend a crime; or c) is used in
alter ego cases, i.e., where a corporation is
essentially a farce, since it is a mere alter ego or
business conduit of a person, or where the
corporation is so organized and controlled and its
affairs so conducted as to make it merely an
instrumentality, agency, conduit or adjunct of
another corporation.11
Piercing the corporate veil based on the alter ego theory
requires the concurrence of three elements, namely:
(1) Control, not mere majority or complete stock
control, but complete domination, not only of finances but
of policy and business practice in respect to the transaction
attacked so that the corporate entity as to this transaction
had at the time no separate mind, will or existence of its
own;
(2) Such control must have been used by the defendant
to commit fraud or wrong, to perpetuate the violation of a
statu-
_______________
9 Supra note 6 at p. 757.

10 Id.
11 Prisma Construction and Development Corporation v. Menchavez,
G.R. No. 160545, March 9, 2010, 614 SCRA 590, 603.
308

tory or other positive legal duty, or dishonest and unjust

act in contravention of plaintiff’s legal right; and
(3) The aforesaid control and breach of duty must have
proximately caused the injury or unjust loss complained of.
The absence of any of these elements prevents piercing
the corporate veil.12

In the present case, the attendant circumstances do not
establish that WPM is a mere alter ego of Manlapaz.
Aside from the fact that Manlapaz was the principal

stockholder of WPM, records do not show that WPM was
organized and controlled, and its affairs conducted in a
manner that made it merely an instrumentality, agency,
conduit or adjunct of Manlapaz. As held in Martinez v.
Court of Appeals,13 the mere ownership by a single
stockholder of even all or nearly all of the capital stocks of
a corporation is not by itself a sufficient ground to
disregard the separate corporate personality. To disregard
the separate juridical personality of a corporation, the
wrongdoing must be clearly and convincingly established.14

Likewise, the records of the case do not support the
lower courts’ finding that Manlapaz had control or
domination over WPM or its finances. That Manlapaz
concurrently held the positions of president, chairman and
treasurer, or that the Manlapaz’s residence is the
registered principal office of WPM, are insufficient
considerations to prove that he had exercised absolute
control over WPM.
In this connection, we stress that the control necessary
to invoke the instrumentality or alter ego rule is not
majority or
_______________
12 Philippine National Bank v. Hydro Resources Contractors

Corporation, G.R. Nos. 167530, 167561 and 167603, March 13, 2013, 693
SCRA 294, 308-310.
13 481 Phil. 450, 453; 438 SCRA 130, 150 (2004).
14 Marubeni Corporation v. Lirag, 415 Phil. 29, 39; 362 SCRA 620, 630
(2001).
309
VOL. 735, SEPTEMBER 17, 2014 309

even complete stock control but such domination of

finances, policies and practices that the controlled
corporation has, so to speak, no separate mind, will or
existence of its own, and is but a conduit for its principal.
The control must be shown to have been exercised at the
time the acts complained of took place. Moreover, the
control and breach of duty must proximately cause the
injury or unjust loss for which the complaint is made.
Here, the respondent failed to prove that Manlapaz,
acting as president, had absolute control over WPM. Even
granting that he exercised a certain degree of control over

the finances, policies and practices of WPM, in view of his
position as president, chairman and treasurer of the
corporation, such control does not necessarily warrant
piercing the veil of corporate fiction since there was not a
single proof that WPM was formed to defraud CLN or the
respondent, or that Manlapaz was guilty of bad faith or
fraud.
On the contrary, the evidence establishes that CLN and
the respondent knew and acted on the knowledge that they
were dealing with WPM for the renovation of the latter’s
restaurant, and not with Manlapaz. That WPM later
reneged on its monetary obligation to CLN, resulting to the
filing of a civil case for sum of money against the
respondent, does not automatically indicate fraud, in the
absence of any proof to support it.
This Court also observed that the CA failed to
demonstrate how the separate and distinct personality of
WPM was used by Manlapaz to defeat the respondent’s
right for reimbursement. Neither was there any showing
that WPM attempted to avoid liability or had no property
against which to proceed.
Since no harm could be said to have been proximately
caused by Manlapaz for which the latter could be held
solidarily liable with WPM, and considering that there was
no proof that WPM had insufficient funds, there was no
sufficient justification for the RTC and the CA to have
ruled that Manlapaz should be held jointly and severally
liable to the
310

respondent for the amount she paid to CLN. Hence, only

WPM is liable to indemnify the respondent.
Finally, we emphasize that the piercing of the veil of
corporate fiction is frowned upon and thus, must be done
with caution.15 It can only be done if it has been clearly
established that the separate and distinct personality of
the corporation is used to justify a wrong, protect fraud, or
perpetrate a deception. The court must be certain that the
corporate fiction was misused to such an extent that
injustice, fraud, or crime was committed against another,
in disregard of its rights; it cannot be presumed.

On the Award of Moral Damages
On the award of moral damages, we find the same in

order in view of WPM’s unjustified refusal to pay a just
debt. Under Article 2220 of the New Civil Code,16 moral
damages may be awarded in cases of a breach of contract
where the defendant acted fraudulently or in bad faith or
was guilty of gross negligence amounting to bad faith.
In the present case, when payment for the balance of the
renovation cost was demanded, WPM, instead of complying
with its obligation, denied having authorized the
respondent to contract in its behalf and accordingly refused
to pay. Such cold refusal to pay a just debt amounts to a
breach of contract in bad faith, as contemplated by Article
2220. Hence, the CA’s order to pay moral damages was in
order.
_______________
15 Heirs of Fe Tan Uy v. International Exchange Bank, G.R. Nos.

166282-83, February 13, 2013, 690 SCRA 519, 528.
16 Article 2220. Willful injury to property may be a legal ground for
awarding moral damages if the court should find that, under the
circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad
faith.
311
VOL. 735, SEPTEMBER 17, 2014 311

WHEREFORE, in light of the foregoing, the decision

dated September 28, 2007 of the Court of Appeals in C.A.-
G.R. CV No. 68289 is MODIFIED and that petitioner
Warlito P. Manlapaz is ABSOLVED from any liability
under the renovation agreement.
SO ORDERED.
Carpio (Chairperson), Del Castillo, Villarama, Jr.**

and Leonen, JJ., concur.
Judgment modified, petitioner Warlito P. Manlapaz

absolved from liability.
Notes.—A settled formulation of the doctrine of piercing

the corporate veil is that when two business enterprises are
owned, conducted and controlled by the same parties, both
law and equity will, when necessary to protect the rights of
third parties, disregard the legal fiction that these two
entities are distinct and treat them as identical or as one

and the same. (Prince Transport, Inc. vs. Garcia, 639 SCRA
312 [2011])
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. (Prince Transport, Inc. vs.
Garcia, 672 SCRA 136 [2012])
——o0o——
_______________
* * Designated as acting member, in lieu of Associate Justice Jose C.

Mendoza, per Special Order No. 1767 dated August 27, 2014.
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3/7/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 735

September 17, 2014.*

Remedial Law; Civil Procedure; Appeals; Corporations; The

298 SUPREME COURT REPORTS ANNOTATED

ego of another is purely one of fact.—We note, at the outset, that

not held personally liable for obligations incurred by the

VOL. 735, SEPTEMBER 17, 2014 299

Same; Same; Alter-Ego Theory; Piercing the corporate veil

conducted in a manner that made it merely an instrumentality,

300 SUPREME COURT REPORTS ANNOTATED

acted fraudulently or in bad faith or was guilty of gross negligence

PETITION for review on certiorari of the decision and

VOL. 735, SEPTEMBER 17, 2014 301

respondent. However, out of the P432,876.02 renovation

1 Under Rule 45 of the Rules of Court; Rollo, pp. 29-38.

302 SUPREME COURT REPORTS ANNOTATED

only the amount of P320,000.00 was paid to CLN, leaving a

In her prayer, the respondent sought indemnification in

VOL. 735, SEPTEMBER 17, 2014 303

P100,000.00 as moral damages and P20,000.00 as

304 SUPREME COURT REPORTS ANNOTATED

The petitioners appealed the RTC decision with the CA.

VOL. 735, SEPTEMBER 17, 2014 305

veil of corporate fiction. They argue that the legal fiction of

shield to avoid liability or to commit a fraud. Since the

306 SUPREME COURT REPORTS ANNOTATED

Generally, factual findings of the lower courts are

We have reviewed the records and found that the

VOL. 735, SEPTEMBER 17, 2014 307

behalf and, in general, from the people comprising it.9

Incidentally, the doctrine of piercing the corporate veil

9 Supra note 6 at p. 757.

308 SUPREME COURT REPORTS ANNOTATED

tory or other positive legal duty, or dishonest and unjust

Aside from the fact that Manlapaz was the principal

12 Philippine National Bank v. Hydro Resources Contractors

VOL. 735, SEPTEMBER 17, 2014 309

even complete stock control but such domination of

granting that he exercised a certain degree of control over

310 SUPREME COURT REPORTS ANNOTATED

respondent for the amount she paid to CLN. Hence, only

On the award of moral damages, we find the same in

15 Heirs of Fe Tan Uy v. International Exchange Bank, G.R. Nos.

VOL. 735, SEPTEMBER 17, 2014 311

WHEREFORE, in light of the foregoing, the decision

Carpio (Chairperson), Del Castillo, Villarama, Jr.**

Judgment modified, petitioner Warlito P. Manlapaz

Notes.—A settled formulation of the doctrine of piercing

entities are distinct and treat them as identical or as one

* * Designated as acting member, in lieu of Associate Justice Jose C.

© Copyright 2021 Central Book Supply, Inc. All rights reserved.

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