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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
September-2001 Jurisprudence                 

  • G.R. No. 137538 September 3, 2001 - OFFICE OF THE OMBUDSMAN v. HON. FRANCISCO B. IBAY

  • A.M. No. MTJ-00-1249 September 4, 2001 - PHIL. GERIATRICS FOUNDATION, ET AL. v. LYDIA QUERUBIN LAYOSA

  • A.M. No. P-00-1373 September 4, 2001 - ELIZABETH A. TIONGCO v. ROGELIO S. MOLINA, ET AL.

  • A.M. No. P-01-1501 September 4, 2001 - JOSEPHINE D. SARMIENTO v. ALBERT S. SALAMAT

  • A.M. No. P-01-1502 September 4, 2001 - CRESENCIO N. BONGALOS v. JOSE R. MONUNGOLH and VICTORIA D. JAMITO

  • A.M. No. P-99-1357 September 4, 2001 - SHERWIN M. BALOLOY v. JOSE B. FLORES

  • A.M. No. RTJ-01-1651 September 4, 2001 - PROSECUTOR LEO C. TABAO v. JUDGE FRISCO T. LILAGAN

  • G.R. No. 125359 September 4, 2001 - ROBERTO S. BENEDICTO and HECTOR T. RIVERA v. THE COURT OF APPEALS

  • G.R. No. 126859 September 4, 2001 - YOUSEF AL-GHOUL, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 127181 September 4, 2001 - LAND BANK OF THE PHIL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 132709 September 4, 2001 - CAMILO L. SABIO, ET AL. v. INTERNATIONAL CORPORATE BANK, ET AL.

  • G.R. No. 134490 September 4, 2001 - PEOPLE OF THE PHILIPPINES v. JOEL BRAGAT

  • G.R. Nos. 135356-58 September 4, 2001 - PEOPLE OF THE PHIL. v. MELECIO SAGARINO

  • G.R. No. 138923 September 4, 2001 - PEOPLE OF THE PHIL. v. ANITA AYOLA, ET AL.

  • A.M. No. MTJ-01-1344 September 5, 2001 - LYDIO ARCILLA, ET AL. v. LUCIO PALAYPAYON, ET AL.

  • G.R. No. 128145 September 5, 2001 - J.C. LOPEZ & ASSOCIATES v. COMMISSION ON AUDIT, ET AL.

  • G.R. No. 133886 September 5, 2001 - PEOPLE OF THE PHILIPPINES v. OSCAR PARBA

  • G.R. No. 134101 September 5, 2001 - PEOPLE OF THE PHIL. v. FELINO O. LLANITA

  • G.R. No. 136054 September 5, 2001 - SEVERINA SAN MIGUEL v. COURT OF APPEALS, ET AL.

  • G.R. No. 132714 September 6, 2001 - PEOPLE OF THE PHIL. v. RENATO LALINGJAMAN

  • G.R. Nos. 139064-66 September 6, 2001 - PEOPLE OF THE PHIL. v. ALBERTO ARCE

  • G.R. No. 140529 September 6, 2001 - JOSE P. LOPEZ v. OFFICE OF THE OMBUDSMAN, ET AL.

  • G.R. No. 141400 September 6, 2001 - PEOPLE OF THE PHIL. v. EVANGELINE GANENAS

  • Admin. Case. No. 4863 September 7, 2001 - URBAN BANK v. ATTY. MAGDALENO M. PEÑA

  • G.R. No. 114858-59 September 7, 2001 - COLUMBUS PHILIPPINES BUS CORPORATION v. NATIONAL LABOR RELATIONS COMMISSION

  • G.R. No. 126352 September 7, 2001 - GSIS v. COURT OF APPEALS, ET AL.

  • G.R. No. 127261 September 7, 2001 - VISAYAN SURETY & INSURANCE CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 129644 September 7, 2001 - CHINA BANKING CORP. v. COURT OF APPEALS, ET AL.

  • G.R. No. 131805 September 7, 2001 - PEOPLE OF THE PHIL. v. GREGORIO HERMOSA, ET AL.

  • G.R. No. 132064 September 7, 2001 - PEOPLE OF THE PHIL. v. ISAGANI BAYENG, ET AL.

  • G.R. No. 132320 September 7, 2001 - PEOPLE OF THE PHIL. v. CONRADO OJERIO

  • G.R. Nos. 135402-03 September 7, 2001 - PEOPLE OF THE PHIL. v. IAN GONZAGA

  • G.R. No. 136779 September 7, 2001 - PEOPLE OF THE PHIL. v. ARNEL ASUNCION

  • G.R. No. 142065 September 7, 2001 - LENIDO LUMANOG v. HON. JAIME N. SALAZAR

  • G.R. No. 142875 September 7, 2001 - EDGAR AGUSTILO v. COURT OF APPEALS, ET AL.

  • G.R. No. 144877 September 7, 2001 - DEVELOPMENT BANK OF THE PHIL. v. VERONICA AGUIRRE, ET AL.

  • A.M. No. P-01-1506 September 10, 2001 - GEORGE S. BICBIC v. DHALIA E. BORROMEO

  • G.R. Nos. 104769 & 135016 September 10, 2001 - AFP MUTUAL BENEFIT ASSO. v. COURT OF APPEALS, ET AL.

  • G.R. No. 118943 September 10, 2001 - MARIO HORNALES v. NLRC, ET AL.

  • G.R. No. 130362 September 10, 2001 - INT’L FLAVORS & FRAGRANCES (PHIL.) v. MERLIN J. ARGOS, ET AL.

  • G.R. No. 138485 September 10, 2001 - DR. v. COMMISSIONER OF INTERNAL REVENUE

  • G.R. No. 141970 September 10, 2001 - METROPOLITAN BANK v. FLORO T. ALEJO

  • G.R. No. 145588 September 10, 2001 - ESPERIDION LOPEZ, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 140398 September 11, 2001 - FRANCISCO DELA MERCED, ET AL. v. GSIS, ET AL.

  • G.R. No. 121877 September 12, 2001 - PEOPLE OF THE PHIL v. ERLINDA GONZALES

  • G.R. Nos. 138431-36 September 12, 2001 - PEOPLE OF THE PHIL. v. DIOSCORA M. ARABIA, ET AL.

  • G.R. No. 140903 September 12, 2001 - HENRY SY v. COMMISSION ON SETTLEMENT OF LAND PROBLEMS, ET AL.

  • A.M. No. 00-1-4-03-SC September 13, 2001 - RE: REQUEST FOR LIVE RADIO-TV COVERAGE OF THE TRIAL IN THE SANDIGANBAYAN OF THE PLUNDER CASES AGAINST FORMER PRESIDENT JOSEPH E. ESTRADA v. JOSEPH E. ESTRADA and INTEGRATED BAR OF THE PHILIPPINES

  • A.M. No. 00-4-188-RTC September 13, 2001 - REQUEST OF MR. OSCAR T. LLAMAS FOR RE-ASSIGNMENT OSCAR T. LLAMAS v. EMMANUEL LACANDOLA AND ET. AL.

  • G.R. No. 120009 September 13, 2001 - DOLE PHILIPPINES v. NATIONAL LABOR RELATIONS COMMISSION

  • G.R. No. 122095 September 13, 2001 - PEOPLE OF THE PHILIPPINES v. DOMINGO DAWISAN

  • G.R. No. 127913 September 13, 2001 - RCBC v. METRO CONTAINER CORP.

  • G.R. No. 132354 September 13, 2001 - PEOPLE OF THE PHIL. v. DEOMEDES IGLESIA

  • G.R. Nos. 136840-42 September 13, 2001 - PEOPLE OF THE PHIL. v. ROMEO NAVARETTE

  • G.R. No. 137250-51 September 13, 2001 - PABLO MARGAREJO v. HON. ADELARDO ESCOSES

  • G.R. No. 138972-73 September 13, 2001 - PEOPLE OF THE PHIL. v. EUGENIO B. MARQUEZ, ET AL.

  • G.R. No. 140512 September 13, 2001 - PEOPLE OF THE PHIL. v. PETER PELERAS, ET AL.

  • G.R. No. 142043 September 13, 2001 - PEOPLE OF THE PHIL. v. NELSON BITUON

  • G.R. No. 142430 September 13, 2001 - PEOPLE OF THE PHIL. v. RONNIE QUINICIO, ET AL.

  • G.R. No. 142444 September 13, 2001 - OFELIA D. ARTUZ v. COURT OF APPEALS, ET AL.

  • G.R. No. 142649 September 13, 2001 - ANTONIO C. SAN LUIS v. COURT OF APPEALS

  • G.R. No. 143702 September 13, 2001 - PEOPLE OF THE PHIL. v. ZALDY MENDOZA

  • G.R. No. 129212 September 14, 2001 - PEOPLE OF THE PHILIPPINES v. MARIO LACUESTA, ET AL.

  • A.M. No. RTJ-00-1575 September 17, 2001 - ISAGANI RIZON v. JUDGE OSCAR E. ZERNA

  • A.M. No. RTJ 99-1498 September 17, 2001 - VICENTE P. LIM v. JUDGE JACINTA B. TAMBAGO, ET AL.

  • G.R. No. 111584 September 17, 2001 - PRODUCERS BANK OF THE PHILIPPINES v. COURT OF APPEALS and SPOUSES SALVADOR Y. CHUA and EMILIA U. CHUA

  • G.R. No. 135644 September 17, 2001 - GOVERNMENT SERVICE INSURANCE SYSTEM v. SPOUSES GONZALO and MATILDE LABUNG-DEANG

  • G.R. No. 135912 September 17, 2001 - ODIN SECURITY AGENCY v. SANDIGANBAYAN, ET AL.

  • G.R. No. 138219 September 17, 2001 - GERARDO V. TAMBAOAN, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 138943-44 September 17, 2001 - PEOPLE OF THE PHIL. v. HENRY ALMAZAN

  • G.R. No. 141209 September 17, 2001 - ANTONIA HUFANA, ET AL. v. WILLIAM ONG GENATO

  • A. C. No. 5043 September 19, 2001 - ABEDIN L. OSOP v. ATTY. V. EMMANUEL C. FONTANILLA

  • G.R. No. 135936 September 19, 2001 - THE PEOPLE OF THE PHILIPPINES v. GUALBERTO MIRADOR alias "GOLING"

  • G.R. No. 144400 September 19, 2001 - DOMINGO O. IGNACIO v. COCA-COLA BOTTLERS PHILS.

  • A.M. No. MTJ-01-1369 September 20, 2001 - GUILLERMA D. CABAÑERO v. JUDGE ANTONIO K. CAÑON

  • A.M. No. MTJ-01-1371 September 20, 2001 - ATTY. NESCITO C. HILARIO v. JUDGE ROMEO A. QUILANTANG

  • A.M. No. RTJ-99-1472 September 20, 2001 - SPOUSES HERMINIO, ET Al. v. HON. DEMETRIO D. CALIMAG

  • A.M. No. P-01-1483 September 20, 2001 - EDNA FE F. AQUINO v. ISABELO LAVADIA

  • G.R. No. 116938 September 20, 2001 - LEONILA GARCIA-RUEDA v. REMEDIOS A. AMOR, ET AL.

  • G.R. No. 127405 September 20, 2001 - MARJORIE TOCAO and WILLIAM T. BELO v. COURT OF APPEALS and NENITA A. ANAY

  • G.R. No. 130399 September 20, 2001 - PUBLIC UTILITIES DEPARTMENT v. HON. TEOFISTO T. GUINGONA

  • G.R. Nos. 135068-72 September 20, 2001 - PEOPLE OF THE PHIL. v. MAXIMO RAMOS

  • G.R. No. 137674 September 20, 2001 - WILLIAM GO KIM HUY v. SANTIAGO GO KIM HUY, ET AL.

  • G.R. No. 139410 September 20, 2001 - PEOPLE OF THE PHILIPPINES v. SILVERIO AGUERO

  • G.R. No. 140898 September 20, 2001 - THE PEOPLE OF THE PHILIPPINES v. JOSE ISHIKAWA AMBA

  • A.M. No. P-99-1289 September 21, 2001 - JUDGE NAPOLEON S. DIAMANTE v. ANTHONY A. ALAMBRA

  • G.R. Nos. 119609-10 September 21, 2001 - PCGG v. HONORABLE SANDIGANBAYAN (Third Division), ET AL.

  • G.R. No. 128876 September 21, 2001 - PEOPLE OF THE PHILIPPINES v. MANOLITO FELIZAR y CAPULI

  • G.R. No. 132384 September 21, 2001 - PEOPLE OF THE PHILIPPINES v. MARLON GADIA

  • G.R. No. 134596 September 21, 2001 - RAYMUND ARDONIO v. THE PEOPLE OF THE PHILIPPINES

  • G.R. No. 142889 September 21, 2001 - EXECUTIVE LABOR ARBITER RICARDO N. OLAIREZ v. OMBUDSMAN ANIANO A. DESIERTO

  • G.R. No. 145416 September 21, 2001 - GOLDEN HORIZON REALTY CORPORATION v. SY CHUAN

  • A.M. No. 99-6-79-MTC September 24, 2001 - REPORT ON THE JUDICIAL AUDIT CONDUCTED IN THE MUNICIPAL TRIAL COURT

  • A.M. No. P-01-1512 September 24, 2001 - TERESITA H. ZIPAGAN v. JOVENCIO N. TATTAO

  • G.R. Nos. 132442-44 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. BERNARDINO ARANZADO

  • G.R. Nos. 135524-25 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. MANOLITO AGUSTIN

  • G.R. No. 141897 September 24, 2001 - METRO CONSTRUCTION v. CHATHAM PROPERTIES

  • G.R. No. 144404 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. LEODEGARIO BASCUGUIN Y AGQUIZ

  • G.R. Nos. 127759-60 September 25, 2001 - PEOPLE OF THE PHIL. v. PO3 NOEL FELICIANO

  • G.R. Nos. 134527-28 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. SERAPIO REY alias APIONG

  • G.R. Nos. 136867-68 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. RODRIGO GALVEZ y JEREZ

  • G.R. No. 137612 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. FRANCISCO ANTINERO BERIARMENTE

  • A.C. No. 4497 September 26, 2001 - MR. and MRS. VENUSTIANO G. SABURNIDO v. ATTY. FLORANTE E. MADROÑO

  • A.C. No. 4990 September 26, 2001 - ELENA ZARATE-BUSTAMANTE and LEONORA SAVET CATABIAN v. ATTY. FLORENTINO G. LIBATIQUE

  • G.R. No. 122824 September 26, 2001 - AURORA F. IGNACIO v. VALERIANO BASILIO,

  • G.R. No. 123058 September 26, 2001 - PEOPLE OF THE PHIL. v. ALFREDO NAPUD, JR.

  • G.R. No. 129107 September 26, 2001 - ALFONSO L. IRINGAN v. HON. COURT OF APPEALS , ET AL.

  • G.R. Nos. 129530-31 September 26, 2001 - PEOPLE OF THE PHILIPPINES v. WILFREDO OLARTE

  • G.R. Nos. 138308-10 September 26, 2001 - THE PEOPLE OF THE PHILIPPINES v. PABLO SANTOS

  • G.R. No. 142564 September 26, 2001 - PEOPLE OF THE PHILIPPINES v. HILGEM NERIO y GIGANTO

  • G.R. Nos. 143108-09 September 26, 2001 - REPUBLIC OF THE PHILIPPINES. v. COURT OF APPEALS

  • Adm. Case. No. 5505 September 27, 2001 - SEVERINO RAMOS v. ATTY. ELLIS JACOBA and ATTY. OLIVIA VELASCO JACOBA

  • G.R. No. 131864-65 September 27, 2001 - PEOPLE OF THE PHILIPPINES v. SHERJOHN ARONDAIN and JOSE PRECIOSO

  • G.R. Nos. 134963-64 September 27, 2001 - ALFREDO LONG and FELIX ALMERIA v. LYDIA BASA

  • G.R. No. 137676 September 27, 2001 - PEOPLE OF THE PHILIPPINES v. ATTY. ROBERTO DIONISIO

  • G.R. No. 144035 September 27, 2001 - PEOPLE OF THE PHIL. v. VICENTE M. BASQUEZ

  • A.M. No. P-00-1391 September 28, 2001 - LIBRADA D. TORRES v. NELSON C. CABESUELA

  • G.R. No. 122425 September 28, 2001 - FLORDELIZA H. CABUHAT v. THE HONORABLE COURT OF APPEALS

  • G.R. No. 124535 September 28, 2001 - THE RURAL BANK OF LIPA CITY, ET AL. v. HONORABLE COURT OF APPEALS, ET AL.

  • G.R. No. 125154 September 28, 2001 - DIGNA VERGEL v. COURT OF APPEALS and DOROTEA-TAMISIN GONZALES

  • G.R. No. 125442 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. FERNANDO ARELLANO y ROBLES

  • G.R. No. 127232 September 28, 2001 - GOLDENROD v. HONORABLE COURT OF APPEALS and PATHFINDER HOLDINGS (PHILIPPINES)

  • G.R. No. 127241 September 28, 2001 - LA CONSOLACION COLLEGE, ET AL. v. NLRC , ET AL.

  • G.R. No. 134128 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. GERARDO DE LAS ERAS y ZAFRA

  • G.R. No. 134928 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. FILOMENO BARNUEVO. ET AL.

  • G.R. Nos. 140789-92 September 28, 2001 - THE PEOPLE OF THE PHILIPPINES v. ALIPIO CARBONELL and DIONISIO CARBONELL

  • G.R. No. 145371 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. BEN AQUINO and ROMEO AQUINO

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    G.R. No. 127181   September 4, 2001 - LAND BANK OF THE PHIL. v. COURT OF APPEALS, ET AL.

     
    PHILIPPINE SUPREME COURT DECISIONS

    SECOND DIVISION

    [G.R. No. 127181. September 4, 2001.]

    LAND BANK OF THE PHILIPPINES, Petitioner, v. THE COURT OF APPEALS, ECO MANAGEMENT CORPORATION and EMMANUEL C. OÑATE, Respondents.

    D E C I S I O N


    QUISUMBING, J.:


    This petition for review on certiorari seeks to reverse and set aside the decision 1 promulgated on June 17, 1996 in CA-GR No. CV-43239 of public respondent and its resolution 2 dated November 29, 1996 denying petitioner’s motion for reconsideration. 3

    The facts of this case as found by the Court of Appeals and which we find supported by the records are as follows:chanrob1es virtual 1aw library

    On various dates in September, October, and November, 1980, appellant Land Bank of the Philippines (LBP) extended a series of credit accommodations to appellee ECO, using the trust funds of the Philippine Virginia Tobacco Administration (PVTA) in the aggregate amount of P26,109,000.00. The proceeds of the credit accommodations were received on behalf of ECO by appellee Oñate.chanrob1es virtua1 1aw 1ibrary

    On the respective maturity dates of the loans, ECO failed to pay the same. Oral and written demands were made, but ECO was unable to pay. ECO claims that the company was in financial difficulty for it was unable to collect its investments with companies which were affected by the financial crisis brought about by the Dewey Dee scandal.

    x       x       x


    On October 20, 1981, ECO proposed and submitted to LBP a "Plan of Payment" whereby the former would set up a financing company which would absorb the loan obligations. It was proposed that LBP would participate in the scheme through the conversion of P9,000,000.00 which was part of the total loan, into equity.chanrob1es virtua1 1aw 1ibrary

    On March 4, 1982, LBP informed ECO of the action taken by the former’s Trust Committee concerning the "Plan of Payment" which reads in part, as follows:chanrob1es virtual 1aw library

    x       x       x


    Please be informed that the Bank’s Trust Committee has deliberated on the plan of payment during its meetings on November 6, 1981 and February 23, 1982. The Committee arrived at a decision that you may proceed with your Plan of Payment provided Land Bank shall not participate in the undertaking in any manner whatsoever.

    In view thereof, may we advise you to make necessary revision in the proposed Plan of Payment and submit the same to us as soon as possible. (Records, p. 428)

    On May 5, 1982, ECO submitted to LBP a "Revised Plan of Payment" deleting the latter’s participation in the proposed financing company. The Trust Committee deliberated on the "Revised Plan of Payment" and resolved to reject it. LBP then sent a letter to the PVTA for the latter’s comments. The letter stated that if LBP did not hear from PVTA within five (5) days from the latter’s receipt of the letter, such silence would be construed to be an approval of LBP’s intention to file suit against ECO and its corporate officers. PVTA did not respond to the letter.chanrob1es virtua1 1aw 1ibrary

    On June 28, 1982, Landbank filed a complaint for Collection of Sum of Money against ECO and Emmanuel C. Oñate before the Regional Trial Court of Manila, Branch 50.

    After trial on the merits, a judgment was rendered in favor of LBP; however, appellee Oñate was absolved from personal liability for insufficiency of evidence.

    Dissatisfied, both parties filed their respective Motions for Reconsideration. LBP claimed that there was an error in computation in the amounts to be paid. LBP also questioned the dismissal of the case with regard to Oñate.

    On the other hand, ECO questioned its being held liable for the amount of the loan. Upon order of the court, both parties submitted Supplemental Motions for Reconsideration and their respective Oppositions to each other’s Motions.chanrob1es virtua1 1aw 1ibrary

    On February 3, 1993, the trial court rendered an Amended Decision, the dispositive portion of which reads as follows:chanrob1es virtual 1aw library

    ACCORDINGLY, the Decision, dated December 3, 1990, is hereby modified to read as follows:chanrob1es virtual 1aw library

    WHEREFORE, judgment is rendered ordering defendant Eco Management Corporation to pay plaintiff Land Bank of the Philippines:chanrob1es virtual 1aw library

    A. The sum of P26,109,000.00 representing the total amount of the ten (10) loan accommodations plus 16% interest per annum computed from the dates of their respective maturities until fully paid, broken down as follows:chanrob1es virtual 1aw library

    1. the principal amount of P4,000,000.00 with interest at 16% computed from September 18, 1981;

    2. the principal amount of P5,000,000.00 with interest at 16% computed from September 21, 1981;

    3. the principal amount of P1,000,000.00 with interest rate at 16% computed from September 28, 1981;chanrob1es virtua1 1aw 1ibrary

    4. the principal amount of P1,000,000.00 with interest at 15% computed from October 5, 1981;

    5. the principal amount of P2,000,000.00 with interest rate at of 16% computed from October 8, 1981;

    6. the principal amount of P2,000,000.00 with interest rate at of 16% from October 23, 1981;

    7. the principal amount of P814,000.00 with interest rate at of 16% computed from November 1, 1981;

    8. the principal amount of P2,295,000.00 with interest rate at of 16% computed from November 6, 1981;

    9. the principal amount of P3,000,000.00 with interest rate at of 16% computed from November 7, 1981;

    10. the principal amount of P5,000,000.00 with interest rate at 16% computed from November 9, 1981;

    B. The sum of P260,000.00 as attorney’s fees; and

    C. The costs of the suit.chanrob1es virtua1 1aw 1ibrary

    The case as against defendant Emmanuel Oñate is dismissed for insufficiency of evidence.

    SO ORDERED. (Records, p. 608) 4

    The Court of Appeals affirmed in toto the amended decision of the trial court. 5

    On June 9, 1996, petitioner filed a motion for reconsideration, which was denied in a resolution dated November 29, 1996. Hence, this present petition, assigning the following errors allegedly committed by the Court of Appeals:chanrob1es virtual 1aw library

    A


    THE COURT OF APPEALS GRAVELY ERRED IN NOT RULING THAT BASED ON THE FACTS AS ESTABLISHED BY EVIDENCE, THERE EXISTS A SUBSTANTIAL AND JUSTIFIABLE GROUND UPON WHICH THE LEGAL NOTION OF THE CORPORATE FICTION OF RESPONDENT ECO MANAGEMENT CORPORATION MAY BE PIERCED.chanrob1es virtua1 1aw 1ibrary

    B


    THE COURT OF APPEALS GRAVELY ERRED IN NOT A[T]TACHING LIABILITY TO RESPONDENT EMMANUEL C. OÑATE JOINTLY AND SEVERALLY WITH RESPONDENT ECO MANAGEMENT CORPORATION FOR THE PRINCIPAL SUM OF P26 M PLUS INTEREST THEREON.

    C


    THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING OF THE LOWER COURT THE SAME NOT BEING SUPPORTED BY THE EVIDENCE AND APPLICABLE LAWS AND JURISPRUDENCE. 6

    The primary issues for resolution here are (1) whether or not the corporate veil of ECO Management Corporation should be pierced; and (2) whether or not Emmanuel C. Oñate should be held jointly and severally liable with ECO Management Corporation for the loans incurred from Land Bank.

    Petitioner contends that the personalities of Emmanuel Oñate and of ECO Management Corporation should be treated as one, for the particular purpose of holding respondent Oñate liable for the loans incurred by corporate respondent ECO from Land Bank. According to petitioner, the said corporation was formed ostensibly to allow Oñate to acquire loans from Land Bank which he used for his personal advantage.

    Petitioner submits the following arguments to support its stand: (1) Respondent Oñate owns the majority of the interest holdings in respondent corporation, specifically during the crucial time when appellees applied for and obtained the loan from LANDBANK, sometime in September to November, 1980. (2) The acronym ECO stands for the initials of Emmanuel C. Oñate, which is the logical, sensible and concrete explanation for the name ECO, in the absence of evidence to the contrary. (3) Respondent Oñate has always referred to himself as the debtor, not merely as an officer or a representative of respondent corporation. (4) Respondent Oñate personally paid P1 Million taken from trust accounts in his name. (5) Respondent Oñate made a personal offering to pay his personal obligation. (6) Respondent Oñate controlled respondent corporation by simultaneously holding two (2) corporate positions, viz., as Chairman and as treasurer, beginning from the time of respondent corporation’s incorporation and continuously thereafter without benefit of election. (7) Respondent corporation had not held any meeting of the stockholders or of the Board of Directors, as shown by the fact that no proceeding of such corporate activities was filed with or borne by the record of the Securities and Exchange Commission (SEC). The only corporate records respondent corporation filed with the SEC were the following: Articles of Incorporation, Treasurer’s Affidavit, Undertaking to Change Corporate Name, Statement of Assets and Liabilities. 7

    Private respondents, in turn, contend that Oñate’s only participation in the transaction between petitioner and respondent ECO was his execution of the loan agreements and promissory notes as Chairman of the corporation’s Board of Directors. There was nothing in the loan agreement nor in the promissory notes which would indicate that Oñate was binding himself jointly and severally with ECO. Respondents likewise deny that ECO stands for Emmanuel C. Oñate. Respondents also note that Oñate is no longer a majority stockholder of ECO and that the payment by a third person of the debt of another is allowed under the Civil Code. They also alleged that there was no fraud and/or bad faith in the transactions between them and Land Bank. Hence, private respondents conclude, there is no legal ground to pierce the veil of respondent corporation’s personality. 8

    At the outset, we find the matters raised by petitioner in his argumentation are mainly questions of fact which are not proper in a petition of this nature. 9 Petitioner is basically questioning the evaluation made by the Court of Appeals of the evidence submitted at the trial. The Court of Appeals had found that petitioner’s evidence was not sufficient to justify the piercing of ECO’s corporate personality. 10 Petitioner contended otherwise. It is basic that where what is being questioned is the sufficiency of evidence, it is a question of fact. 11 Nevertheless, even if we regard these matters as tendering an issue of law, we still find no reason to reverse the findings of the Court of Appeals.

    A corporation, upon coming into existence, is invested by law with a personality separate and distinct from those persons composing it as well as from any other legal entity to which it may be related. 12 By this attribute, a stockholder may not, generally, be made to answer for acts or liabilities of the said corporation, and vice versa. 13 This separate and distinct personality is, however, merely a fiction created by law for convenience and to promote the ends of justice. 14 For this reason, it may not be used or invoked for ends subversive to the policy and purpose behind its creation 15 or which could not have been intended by law to which it owes its being. 16 This is particularly true when the fiction is used to defeat public convenience, justify wrong, protect fraud, defend crime, 17 confuse legitimate legal or judicial issues, 18 perpetrate deception or otherwise circumvent the law. 19 This is likewise true where the corporate entity is being used as an alter ego, adjunct, or business conduit for the sole benefit of the stockholders or of another corporate entity. 20 In all these cases, the notion of corporate entity will be pierced or disregarded with reference to the particular transaction involved. 21

    The burden is on petitioner to prove that the corporation and its stockholders are, in fact, using the personality of the corporation as a means to perpetrate fraud and/or escape a liability and responsibility demanded by law. In order to disregard the separate juridical personality of a corporation, the wrongdoing must be clearly and convincingly established. 22 In the absence of any malice or bad faith, a stockholder or an officer of a corporation cannot be made personally liable for corporate liabilities. 23

    The mere fact that Oñate owned the majority of the shares of ECO is not a ground to conclude that Oñate and ECO is one and the same. Mere ownership by a single stockholder of all or nearly all of the capital stock of a corporation is not by itself sufficient reason for disregarding the fiction of separate corporate personalities. 24 Neither is the fact that the name "ECO" represents the first three letters of Oñate’s name sufficient reason to pierce the veil. Even if it did, it does not mean that the said corporation is merely a dummy of Oñate. A corporation may assume any name provided it is lawful. There is nothing illegal in a corporation acquiring the name or as in this case, the initials of one of its shareholders.chanrob1es virtua1 1aw 1ibrary

    That respondent corporation in this case was being used as a mere alter ego of Oñate to obtain the loans had not been shown. Bad faith or fraud on the part of ECO and Oñate was not also shown. As the Court of Appeals observed, if shareholders of ECO meant to defraud petitioner, then they could have just easily absconded instead of going out of their way to propose "Plans of Payment." 25 Likewise, Oñate volunteered to pay a portion of the corporation’s debt. 26 This offer demonstrated good faith on his part to ease the debt of the corporation of which he was a part. It is understandable that a shareholder would want to help his corporation and in the process, assure that his stakes in the said corporation are secured. In this case, it was established that the P1 Million did not come solely from Oñate. It was taken from a trust account which was owned by Oñate and other investors. 27 It was likewise proved that the P1 Million was a loan granted by Oñate and his co-depositors to alleviate the plight of ECO. 28 This circumstance should not be construed as an admission that he was really the debtor and not ECO.

    In sum, we agree with the Court of Appeals’ conclusion that the evidence presented by the petitioner does not suffice to hold respondent Oñate personally liable for the debt of co-respondent ECO. No reversible error could be attributed to respondent court’s decision and resolution which petitioner assails.chanrob1es virtua1 1aw 1ibrary

    WHEREFORE, the petition is DENIED for lack of merit. The decision and resolution of the Court of Appeals in CA-G.R. CV No. 43239 are AFFIRMED. Costs against petitioner.

    SO ORDERED.

    Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.

    Endnotes:



    1. CA Rollo, pp. 163-170.

    2. Id. at 198.

    3. Id. at 172-186.

    4. Id. at 163-166.

    5. Id. at 170.

    6. Rollo, p. 25.

    7. Id. at 26-28.

    8. Id. at 197-204.

    9. Herrera, Remedial Law, Volume VII, pp. 520-521, citing FNCB Finance v. Estavillo, G.R No. 93394, 192 SCRA 514, 517 (1990); and Universal Motors v. Court of Appeals, G.R No. 47432, 205 SCRA 448, 455 (1992).

    10. CA Rollo, p. 167.

    11. Herrera, Id. at 521, citing 2 Moran p. 473 1979 ed; Cheeseman v. IAC, G.R. No. 74833, 193 SCRA 93, 100-101 (1991); Paterno v. Paterno, G.R. No. 63680, 183 SCRA 630, 636-637 (1990).

    12. Yutivo Sons Hardware Company v. Court of Tax Appeals, 1 SCRA 160, 165 (1961); Francisco Motors Corporation v. CA, 309 SCRA 72, 82 (1999).

    13. NAMARCO v. Associated Finance Company, 19 SCRA 962, 965 (1967).

    14. Azcor Manufacturing Inc. v. NLRC, 303 SCRA 26, 35 (1999).

    15. Emilio Cano Enterprises Inc., v. CIR, 121 Phil. 276, 278-279 (1965).

    16. McConnel v. Court of Appeals, 1 SCRA 722, 725 (1961).

    17. Supra, note 10 at 165.

    18. R.F. Sugay & Co. v. Reyes, 120 Phil. 1497, 1502 (1964).

    19. Gregorio Araneta, Inc. v. Paz Tuason de Paterno, 49 O.G. 45, 56 (1953).

    20. Comm. Internal Revenue v. Norton Harrison Corp., 120 Phil. 684, 690-691 (1964).

    21. Koppel, Inc. v. Yatco, 77 Phil. 496, 505 (1946).

    22. Complex Electronics Employees Association v. National Labor Relations Commission, 310 SCRA 403, 418 (1999).

    23. Id. at 421.

    24. Traders Royal Bank v. Court of Appeals, 269 SCRA 15, 29-30 (1997).

    25. CA decision, p. 7; Rollo, p. 52.

    26. One million pesos.

    27. TSN, April 3, 1984, pp. 61-62; Records, pp. 206-207.

    28. Records, p. 454, Exhibit "K" .

    G.R. No. 127181   September 4, 2001 - LAND BANK OF THE PHIL. v. COURT OF APPEALS, ET AL.


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