WPM International Trading, Inc. vs. Labayen
WPM International Trading, Inc. vs. Labayen
WPM International Trading, Inc. vs. Labayen
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* SECOND DIVISION.
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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
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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
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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
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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):
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(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
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