CASE DIGEST : POE-LLAMANZARES VS COMELEC

G.R. No. 221697, March 08, 2016

MARY GRACE NATIVIDAD S. POE-LLAMANZARES, Petitioner, v. COMMISSION ON ELECTIONS AND ESTRELLA C. ELAMPARO, Respondents.

G.R. NOS. 221698-700
MARY GRACE NATIVIDAD S. POE-LLAMANZARES, Petitioner, v. COMMISSION ON ELECTIONS, FRANCISCO S. TATAD, ANTONIO P. CONTRERAS AND AMADO D. VALDEZ, Respondents.

FACTS : Mary Grace Natividad S. Poe-Llamanzares (petitioner) was found abandoned as a newborn infant in the Parish Church of Jaro, Iloilo by a certain Edgardo Militar (Edgardo) on 3 September 1968. Parental care and custody over petitioner was passed on by Edgardo to his relatives, Emiliano Militar (Emiliano) and his wife. When petitioner was five (5) years old, celebrity spouses Ronald Allan Kelley Poe (a.k.a. Fenando Poe, Jr.) and Jesusa Sonora Poe (a.k.a. Susan Roces) filed a petition for her adoption with the Municipal Trial Court (MTC) of San Juan City. Having reached the age of eighteen (18) years in 1986, petitioner registered as a voter with the local COMELEC Office in San Juan City. On 4 April 1988, petitioner applied for and was issued Philippine Passport. On 27 July 1991, petitioner married Teodoro Misael Daniel V. Llamanzares (Llamanzares), a citizen of both the Philippines and the U.S., at Sanctuario de San Jose Parish in San Juan City. Desirous of being with her husband who was then based in the U.S., the couple flew back to the U.S. two days after the wedding ceremony or on 29 July 1991. On 8 April 2004, the petitioner came back to the Philippines together with Hanna to support her father's candidacy for President in the May 2004 elections. She returned to the U.S. with her two daughters on 8 July 2004. After a few months, specifically on 13 December 2004, petitioner rushed back to the Philippines upon learning of her father's deteriorating medical condition. Her father slipped into a coma and eventually expired. The petitioner stayed in the country until 3 February 2005 to take care of her father's funeral arrangements as well as to assist in the settlement of his estate. The couple began preparing for their resettlement including notification of their children's schools that they will be transferring to Philippine schools for the next semester. coordination with property movers for the relocation of their household goods, furniture and cars from the U.S. to the Philippines; and inquiry with Philippine authorities as to the proper procedure to be followed in bringing their pet dog into the country. As early as 2004, the petitioner already quit her job in the U.S. In late March 2006, petitioner's husband officially informed the U.S. Postal Service of the family's change and abandonment of their address in the U.S. On 7 July 2006, petitioner took her Oath of Allegiance to the Republic of the Philippines pursuant to Republic Act (R.A.) No. 9225 or the Citizenship Retention and Re-acquisition Act of 2003. Again, petitioner registered as a voter of Barangay Santa Lucia, San Juan City on 31 August 2006.40 She also secured from the DFA a new Philippine Passport bearing the No. XX4731999. On 6 October 2010, President Benigno S. Aquino III appointed petitioner as Chairperson of the Movie and Television Review and Classification Board (MTRCB). On 12 July 2011, the petitioner executed before the Vice Consul of the U.S. Embassy in Manila an "Oath/Affirmation of Renunciation of Nationality of the United States.". On 9 December 2011, the U.S. Vice Consul issued to petitioner a "Certificate of Loss of Nationality of the United States" effective 21 October 2010. On 15 October 2015, petitioner filed her COC for the Presidency for the May 2016 Elections. Petitioner's filing of her COC for President in the upcoming elections triggered the filing of several COMELEC cases against her which were the subject of these consolidated cases.Petitioner's claim that she will have been a resident for ten (10) years and eleven (11) months on the day before the 2016 elections.

ISSUE : 1) WON GRACE POE IS A NATURAL BORN CITIZEN OF THE PHILIPPINES

2) WON GRACE POE SATISFY THE RESIDENCY REQUIREMENTS AS MANDATED BY THE CONSTITUTION

HELD : 

(THE 4 REASON WHY THE SC RULED IN FAVOR OF GPOE ON CITIZENSHIP)

1-A) At the outset, it must be noted that presumptions regarding paternity is neither unknown nor unaccepted in Philippine Law. The Family Code of the Philippines has a whole chapter on Paternity and Filiation. That said, there is more than sufficient evider1ce that petitioner has Filipino parents and is therefore a natural-born Filipino. The Solicitor General offered official statistics from the Philippine Statistics Authority (PSA)111 that from 1965 to 1975, the total number of foreigners born in the Philippines was 15,986 while the total number of Filipinos born in the country was 10,558,278. The statistical probability that any child born in the Philippines in that decade is natural-born Filipino was 99.83%. Other circumstantial evidence of the nationality of petitioner's parents are the fact that she was abandoned as an infant in a Roman Catholic Church in Iloilo City.1âwphi1 She also has typical Filipino features: height, flat nasal bridge, straight black hair, almond shaped eyes and an oval face.

1-B) As a matter of law, foundlings are as a class, natural-born citizens. While the 1935 Constitution's enumeration is silent as to foundlings, there is no restrictive language which would definitely exclude foundlings either. Because of silence and ambiguity in the enumeration with respect to foundlings, there is a need to examine the intent of the framers. All exhort the State to render social justice. Of special consideration are several provisions in the present charter: Article II, Section 11 which provides that the "State values the dignity of every human person and guarantees full respect for human rights," Article XIII, Section 1 which mandates Congress to "give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities x x x" and Article XV, Section 3 which requires the State to defend the "right of children to assistance, including proper care and nutrition, and special protection from all forms of neglect, abuse, cruelty, exploitation, and other conditions prejudicial to their development." Certainly, these provisions contradict an intent to discriminate against foundlings on account of their unfortunate status.

1-C)Recent legislation is more direct. R.A. No. 8043 entitled "An Act Establishing the Rules to Govern the Inter-Country Adoption of Filipino Children and For Other Purposes" (otherwise known as the "Inter-Country Adoption Act of 1995"), R.A. No. 8552, entitled "An Act Establishing the Rules and Policies on the Adoption of Filipino Children and For Other Purposes" (otherwise known as the Domestic Adoption Act of 1998) and this Court's A.M. No. 02-6-02-SC or the "Rule on Adoption," all expressly refer to "Filipino children" and include foundlings as among Filipino children who may be adopted.

1-D) Foundlings are likewise citizens under international law. Under the 1987 Constitution, an international law can become part of the sphere of domestic law either by transformation or incorporation. The transformation method requires that an international law be transformed into a domestic law through a constitutional mechanism such as local legislation

        D.1) Universal Declaration of Human Rights ("UDHR") has been interpreted by this Court as part of the generally accepted principles of international law and binding on the State.

          D.2) The Philippines has also ratified the UN Convention on the Rights of the Child (UNCRC)

       D.3) n 1986, the country also ratified the 1966 International Covenant on Civil and Political Rights (ICCPR).

The common thread of the UDHR, UNCRC and ICCPR is to obligate the Philippines to grant nationality from birth and ensure that no child is stateless. This grant of nationality must be at the time of birth, and it cannot be accomplished by the application of our present naturalization laws, Commonwealth Act No. 473, as amended, and R.A. No. 9139, both of which require the applicant to be at least eighteen (18) years old. That the Philippines is not a party to the 1930 Hague Convention nor to the 1961 Convention on the Reduction of Statelessness does not mean that their principles are not binding. While the Philippines is not a party to the 1930 Hague Convention, it is a signatory to the Universal Declaration on Human Rights. this Court noted that the Philippines had not signed or ratified the "International Convention for the Protection of All Persons from Enforced Disappearance." Yet, we ruled that the proscription against enforced disappearances in the said convention was nonetheless binding as a "generally accepted principle of international law." Another case where the number of ratifying countries was not determinative is Mijares v. Ranada, where only four countries had "either ratified or acceded to" the 1966 "Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters" when the case was decided in 2005. In sum, all of the international law conventions and instruments on the matter of nationality of foundlings were designed to address the plight of a defenseless class which suffers from a misfortune not of their own making. We cannot be restrictive as to their application if we are a country which calls itself civilized and a member of the community of nations

2) (RESIDENCY) The Constitution requires presidential candidates to have ten (10) years' residence in the Philippines before the day of the elections. When petitioner immigrated to the U.S. in 1991, she lost her original domicile, which is the Philippines. Petitioner presented voluminous evidence showing that she and her family abandoned their U.S. domicile and relocated to the Philippines for good. The foregoing evidence were undisputed and the facts were even listed by the COMELEC, particularly in its Resolution in the Tatad, Contreras and Valdez cases. the Court had no choice but to hold that residence could be counted only from acquisition of a permanent resident visa or from reacquisition of Philippine citizenship. In contrast, the evidence of petitioner is overwhelming and taken together leads to no other conclusion that she decided to permanently abandon her U.S. residence (selling the house, taking the children from U.S. schools, getting quotes from the freight company, notifying the U.S. Post Office of the abandonment of their address in the U.S., donating excess items to the Salvation Army, her husband resigning from U.S. employment right after selling the U.S. house) and permanently relocate to the Philippines and actually re-established her residence here on 24 May 2005 (securing T.I.N, enrolling her children in Philippine schools, buying property here, constructing a residence here, returning to the Philippines after all trips abroad, her husband getting employed here). Indeed, coupled with her eventual application to reacquire Philippine citizenship and her family's actual continuous stay in the Philippines over the years, it is clear that when petitioner returned on 24 May 2005 it was for good.It was grave abuse of discretion for the COMELEC to treat the 2012 COC as a binding and conclusive admission against petitioner. It could be given in evidence against her, yes, but it was by no means conclusive. There is precedent after all where a candidate's mistake as to period of residence made in a COC was overcome by evidence. For another, it could not be said that petitioner was attempting to hide anything. As already stated, a petition for quo warranto had been filed against her with the SET as early as August 2015. The event from which the COMELEC pegged the commencement of residence, petitioner's repatriation in July 2006 under R.A. No. 9225, was an established fact to repeat, for purposes of her senatorial candidacy. In sum, the COMELEC, with the same posture of infallibilism, virtually ignored a good number of evidenced dates all of which can evince animus manendi to the Philippines and animus non revertedi to the United States of America. In light of all these, it was arbitrary for the COMELEC to satisfy its intention to let the case fall under the exclusive ground of false representation, to consider no other date than that mentioned by petitioner in her COC for Senator.

All put together, in the matter of the citizenship and residence of petitioner for her candidacy as President of the Republic, the questioned Resolutions of the COMELEC in Division and En Banc are, one and all, deadly diseased with grave abuse of discretion from root to fruits.

CASE DIGEST : MANILA BANKERS LIFE INSURANCE VS ABAN

G.R. No. 175666, July 29, 2013

MANILA BANKERS LIFE INSURANCE CORPORATION, Petitioner, v. CRESENCIA P. ABAN,Respondent

FACTS : On July 3, 1993, Delia Sotero (Sotero) took out a life insurance policy from Manila Bankers Life Insurance Corporation. Petitioner issued Insurance Policy No. 747411 (the policy), with a face value of P100,000.00, in Sotero's favor on August 30, 1993, after the requisite medical examination and payment of the insurance premium. On April 10, 1996, when the insurance policy had been in force for more than two years and seven months, Sotero died. Respondent filed a claim for the insurance proceeds on July 9, 1996. Petitioner conducted an investigation into the claim. petitioner denied respondent's claim on April 16, 1997 and refunded the premiums paid on the policy. On April 24, 1997, petitioner filed a civil case for rescission and/or annulment of the policy. The main thesis of the Complaint was that the policy was obtained by fraud, concealment and/or misrepresentation under the Insurance Code. Respondent filed a Motion to Dismiss claiming that petitioner's cause of action was barred by prescription pursuant to Section 48 of the Insurance Code.On December 9, 1997, the trial court issued an Order granting respondent's Motion to Dismiss. Petitioner interposed an appeal with the CA. The CA sustained the trial court. Hence this petition.

ISSUE : WON THE COURT OF APPEALS ERRED IN SUSTAINING THE APPLICATION OF THE INCONTESTABILITY PROVISION IN THE INSURANCE CODE BY THE TRIAL COURT

HELD : Section 48 serves a noble purpose, as it regulates the actions of both the insurer and the insured. Under the provision, an insurer is given two years - from the effectivity of a life insurance contract and while the insured is alive - to discover or prove that the policy is void ab initio or is rescindible by reason of the fraudulent concealment or misrepresentation of the insured or his agent. After the two-year period lapses, or when the insured dies within the period, the insurer must make good on the policy, even though the policy was obtained by fraud, concealment, or misrepresentation. Section 48 regulates both the actions of the insurers and prospective takers of life insurance. It gives insurers enough time to inquire whether the policy was obtained by fraud, concealment, or misrepresentation; on the other hand, it forewarns scheming individuals that their attempts at insurance fraud would be timely uncovered - thus deterring them from venturing into such nefarious enterprise. At the same time, legitimate policy holders are absolutely protected from unwarranted denial of their claims or delay in the collection of insurance proceeds occasioned by allegations of fraud, concealment, or misrepresentation by insurers, claims which may no longer be set up after the two-year period expires as ordained under the law.

CASE DIGEST : SUN LIFE CANADA VS. SIBYA

G.R. No. 211212, June 08, 2016

SUN LIFE OF CANADA (PHILIPPINES), INC., Petitioner, v. MA. DAISY'S. SIBYA, JESUS MANUEL S. SIBYA III, JAIME LUIS S. SIBYA, AND THE ESTATE OF THE DECEASED ATTY. JESUS SIBYA, JR., Respondents.

FACTS : On January 10, 2001, Atty. Jesus Sibya, Jr. (Atty. Jesus Jr.) applied for life insurance with Sun Life. In his Application for Insurance, he indicated that he had sought advice for kidney problems. On February 5, 2001, Sun Life approved Atty. Jesus Jr.'s application and issued Insurance Policy No. 031097335. On May 11, 2001, Atty. Jesus Jr. died as a result of a gunshot wound in San Joaquin, Iloilo. As such, Ma. Daisy filed a Claimant's Statement with Sun Life to seek the death benefits indicated in his insurance policy. In a letter dated August 27, 2001, however, Sun Life denied the claim on the ground that the details on Atty. Jesus Jr.'s medical history were not disclosed in his application. The respondents reiterated their claim against Sun Life thru a letter dated September 17, 2001. Sun Life, however, refused to heed the respondents' requests and instead filed a Complaint for Rescission before the RTC and prayed for judicial confirmation of Atty. Jesus Jr.'s rescission of insurance policy. In its Complaint, Sun Life alleged that Atty. Jesus Jr. did not disclose in his insurance application his previous medical treatment at the National Kidney Transplant Institute in May and August of 1994. For their defense, the respondents claimed that Atty. Jesus Jr. did not commit misrepresentation in his application for insurance. The RTC held that Atty. Jesus Jr. did not commit material concealment and misrepresentation when he applied for life insurance with Sun Life. Aggrieved, Sun Life elevated the case to the CA. The CA affirmed the decision of the RTC. Hence this petition.

ISSUE : Whether or not the CA erred when it affirmed the RTC decision finding that there was no concealment or misrepresentation when Atty. Jesus Jr. submitted his insurance application with Sun Life.

HELD : In Manila Bankers Life Insurance Corporation v. Aban,22 the Court held that if the insured dies within the two-year contestability period, the insurer is bound to make good its obligation under the policy, regardless of the presence or lack of concealment or misrepresentation. Section 48 serves a noble purpose, as it regulates the actions of both the insurer and the insured. Under the provision, an insurer is given two years - from the effectivity of a life insurance contract and while the insured is alive - to discover or prove that the policy is void ab initio or is rescindible by reason of the fraudulent concealment or misrepresentation of the insured or his agent. After the two-year period lapses, or when the insured dies within the period, the insurer must make good on the policy, even though the policy was obtained by fraud, concealment, or misrepresentation. This is not to say that insurance fraud must be rewarded, but that insurers who recklessly and indiscriminately solicit and obtain business must be penalized, for such recklessness and lack of discrimination ultimately work to the detriment of bona fide takers of insurance and the public in general. In the present case, Sun Life issued Atty. Jesus Jr.'s policy on February 5, 2001. Thus, it has two years from its issuance, to investigate and verify whether the policy was obtained by fraud, concealment, or misrepresentation. Upon the death of Atty. Jesus Jr., however, on May 11, 2001, or a mere three months from the issuance of the policy, Sun Life loses its right to rescind the policy.

CASE DIGEST : GUILLERMO VS USON

G.R. No. 198967, March 07, 2016

JOSE EMMANUEL P. GUILLERMO, Petitioner, v. CRISANTO P. USON, Respondent.

FACTS: On March 11, 1996, respondent Crisanto P. Uson (Uson) began his employment with Royal Class Venture Phils., Inc. (Royal Class Venture) as an accounting clerk. Eventually, he was promoted to the position of accounting supervisor, with a salary of Php13,000.00 a month, until he was allegedly dismissed from employment on December 20, 2000. On March 2, 2001, Uson filed with the Sub-Regional Arbitration. Royal Class Venture did not make an appearance in the case despite its receipt of summons. On October 22, 2001, Labor Arbiter Jose G. De Vera rendered a Decision in favor of the complainant Uson and ordering therein respondent Royal Class Venture to reinstate him to his former position and pay his backwages, 13th month pay as well as moral and exemplary damages and attorney's fees. Royal Class Venture, as the losing party, did not file an appeal of the decision. On May 17, 2002, an Alias Writ of Execution. But with the judgment still unsatisfied, a Second Alias Writ of Execution. Again, it was reported in the Sheriff's Return that the Second Alias Writ of Execution dated September 11, 2002 remained "unsatisfied." Thus, on November 14, 2002, Uson filed a Motion for Alias Writ of Execution and to Hold Directors and Officers of Respondent Liable for Satisfaction of the Decision. On December 26, 2002, Labor Arbiter Irenarco R. Rimando issued an Order. The order held that officers of a corporation are jointly and severally liable for the obligations of the corporation to the employees. 

Guillermo who appears to be the owner of the said corporation which was alleged to be resolved, filed, by way of special appearance, a Motion for Reconsideration/To Set Aside the Order of December 26, 2002. The same, however, was not granted as, this time. On January 5, 2004, Guillermo filed a Motion for Reconsideration of the above Order, but the same was promptly denied by the Labor Arbiter in an Order dated January 7, 2004. Guillermo elevated the matter to the NLRC by filing a Memorandum of Appeal with Prayer for a (Writ of) Preliminary Injunction dated June 10, 2004. the NLRC dismissed Guillermo's appeal and denied his prayers for injunction. On August 20, 2010, Guillermo filed a Petition for Certiorari. On June 8, 2011, the Court of Appeals rendered its assailed Decision which denied Guillermo's petition and upheld all the findings of the NLRC. Hence, the instant petition.

ISSUE : WON the piercing the veil of corporate fiction proper in the case

HELD: The veil of corporate fiction can be pierced, and responsible corporate directors and officers or even a separate but related corporation, may be impleaded and held answerable solidarily in a labor case, even after final judgment and on execution, so long as it is established that such persons have deliberately used the corporate vehicle to unjustly evade the judgment obligation, or have resorted to fraud, bad faith or malice in doing so. 

A finding of personal and solidary liability against a corporate officer like Guillermo must be rooted on a satisfactory showing of fraud, bad faith or malice, or the presence of any of the justifications for disregarding the corporate fiction. 

It is our finding that such evidence exists in the record. In the case at bar involves an apparent family corporation. As in those two cases, the records of the present case bear allegations and evidence that Guillermo, the officer being held liable, is the person responsible in the actual running of the company and for the malicious and illegal dismissal of the complainant; he, likewise, was shown to have a role in dissolving the original obligor company in an obvious "scheme to avoid liability" which jurisprudence has always looked upon with a suspicious eye in order to protect the rights of labor. Then, it is also clearly reflected in the records that it was Guillermo himself, as President and General Manager of the company, who received the summons to the case, and who also subsequently and without justifiable cause refused to receive all notices and orders of the Labor Arbiter that followed. Finally, the records likewise bear that Guillermo dissolved Royal Class Venture and helped incorporate a new firm, located in the same address as the former, wherein he is again a stockl1older. The foregoing clearly indicate a pattern or scheme to avoid the obligations to Uson and frustrate the execution of the judgment award, which this Court, in the interest of justice, will not countenance.

CASE DIGEST : PRINCE TRANSPORT INC VS GARCIA

G.R. No. 167291 January 12, 2011

PRINCE TRANSPORT, INC. and MR. RENATO CLAROS, Petitioners, vs

DIOSDADO GARCIA, LUISITO GARCIA, RODANTE ROMERO, REX BARTOLOME, FELICIANO GASCO, JR., DANILO ROJO, EDGAR SANFUEGO, AMADO GALANTO, EUTIQUIO LUGTU, JOEL GRAMATICA, MIEL CERVANTES, TERESITA CABANES, ROE DELA CRUZ, RICHELO BALIDOY, VILMA PORRAS, MIGUELITO SALCEDO, CRISTINA GARCIA, MARIO NAZARENO, DINDO TORRES, ESMAEL RAMBOYONG, ROBETO*MANO, ROGELIO BAGAWISAN, ARIEL SNACHEZ, ESTAQULO VILLAREAL, NELSON MONTERO, GLORIA ORANTE, HARRY TOCA, PABLITO MACASAET and RONALD GARCITA, Respondents.

FACTS: Respondents were hired either as drivers, conductors, mechanics or inspectors, except for respondent Diosdado Garcia (Garcia), who was assigned as Operations Manager. in addition to their regular monthly income, respondents also received commissions equivalent to 8 to 10% of their wages; sometime in October 1997, the said commissions were reduced to 7 to 9%; this led respondents and other employees of PTI to hold a series of meetings to discuss the protection of their interests as employees; these meetings led petitioner Renato Claros, who is the president of PTI, to suspect that respondents are about to form a union; in order to block the continued formation of the union, PTI caused the transfer of all union members and sympathizers to one of its sub-companies, Lubas Transport (Lubas)

Petitioners, on the other hand, denied the material allegations of the complaints contending that herein respondents were no longer their employees, since they all transferred to Lubas at their own request; petitioners have nothing to do with the management and operations of Lubas as well as the control and supervision of the latter's employees; Subsequently, the complaints filed by respondents were consolidated. On October 25, 2000, the Labor Arbiter rendered a Decision. The Labor Arbiter ruled that petitioners are not guilty of unfair labor practice. Respondents filed a Partial Appeal with the NLRC. NLRC modified the decision of the labor arbiter. Respondents filed a Motion for Reconsideration, but the NLRC denied it in its Resolution. Respondents then filed a special civil action for certiorari with the CA assailing the Decision and Resolution of the NLRC. On December 20, 2004, the CA rendered the herein assailed Decision which granted respondents' petition. The CA ruled that petitioners are guilty of unfair labor practice; that Lubas is a mere instrumentality, agent conduit or adjunct of PTI. Petitioners filed a Motion for Reconsideration, but the CA denied it via its Resolution. Hence, the instant petition for review on certiorari.

ISSUE : WON THE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT PETITIONERS PRINCE TRANSPORT, INC. AND MR. RENATO CLAROS AND LUBAS TRANSPORT ARE ONE AND THE SAME CORPORATION AND THUS, LIABLE IN SOLIDUM TO RESPONDENTS

HELD: The Court agrees with the CA that Lubas is a mere agent, conduit or adjunct of PTI. 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. In the present case, it may be true that Lubas is a single proprietorship and not a corporation. However, petitioners attempt to isolate themselves from and hide behind the supposed separate and distinct personality of Lubas so as to evade their liabilities is precisely what the classical doctrine of piercing the veil of corporate entity seeks to prevent and remedy. What is telling is the fact that in a memorandum issued by PTI, dated January 22, 1998, petitioner company admitted that Lubas is one of its sub-companies. Moreover, petitioners failed to refute the contention of respondents that despite the latters transfer to Lubas of their daily time records, reports, daily income remittances of conductors, schedule of drivers and conductors were all made, performed, filed and kept at the office of PTI. In fact, respondents identification cards bear the name of PTI. It may not be amiss to point out at this juncture that in two separate illegal dismissal cases involving different groups of employees transferred by PTI to other companies, the Labor Arbiter handling the cases found that these companies and PTI are one and the same entity; thus, making them solidarily liable for the payment of backwages and other money claims awarded to the complainants therein.

CASE DIGEST : VIOLAGO VS. BF FINANCE CORPORATION

G.R. No. 158262 July 21, 2008

SPS. PEDRO AND FLORENCIA VIOLAGO, Petitioners, vs BA FINANCE CORPORATION and AVELINO VIOLAGO, Respondents

FACTS: Sometime in 1983, Avelino Violago, President of Violago Motor Sales Corporation (VMSC), offered to sell a car to his cousin, Pedro F. Violago, and the latters wife, Florencia. Avelino explained that he needed to sell a vehicle to increase the sales quota of VMSC, and that the spouses would just have to pay a down payment of PhP 60,500 while the balance would be financed by respondent BA Finance. On August 4, 1983, the spouses and Avelino signed a promissory note under which they bound themselves to pay jointly and severally to the order of VMSC the amount of PhP 209,601 in 36 monthly installments of PhP 5,822.25 a month, the first installment to be due and payable on September 16, 1983. Avelino prepared a Disclosure Statement of Loan/Credit Transportation which showed the net purchase price of the vehicle, down payment, balance, and finance charges. The sales invoice was filed with the Land Transportation Office (LTO)-Baliwag Branch, which issued Certificate of Registration No. 0137032 in the name of Pedro on August 8, 1983. The spouses were unaware that the same car had already been sold in 1982 to Esmeraldo Violago, another cousin of Avelino, and registered in Esmeraldos name by the LTO-San Rafael Branch. Despite the spouses demand for the car and Avelinos repeated assurances, there was no delivery of the vehicle. Since VMSC failed to deliver the car, Pedro did not pay any monthly amortization to BA Finance. On March 1, 1984, BA Finance filed with the Regional Trial Court (RTC), Branch 116 in Pasay City a complaint for Replevin with Damages against the spouses.prayed for the delivery of the vehicle in favor of BA Finance or, if delivery cannot be effected, for the payment of PhP 199,049.41 plus penalty at the rate of 3% per month from February 15, 1984 until fully paid. 

On August 21, 1989, the spouses Violago filed a Motion for Reconsideration and Motion to Quash Writ of Execution on the basis of lack of a valid service of summons on them, among other reasons. The RTC denied the motions; hence, the spouses filed a petition for certiorari under Rule 65 before the CA, docketed as CA G.R. No. 2002-SP. On May 31, 1991, the CA nullified the RTCs order. This CA decision became final and executory. 

On January 28, 1992, the spouses filed their Answer before the RTC. The RTC rendered a Decision on March 5, 1994, finding for BA Finance but against the Violago spouses. The RTC, however, declared that they are entitled to be indemnified by Avelino. Petitioners-spouses and Avelino appealed to the CA. The appellate court ruled that the promissory note was a negotiable instrument and that BA Finance was a holder in due course, applying Secs. 8, 24, and 52 of the NIL. The spouses Violago sought but were denied reconsideration by the CA per its Resolution of May 15, 2003.

ISSUE : 1) WHETHER OR NOT THE HOLDER OF AN INVALID NEGOTIABLE PROMISSORY NOTE MAY BE CONSIDERED A HOLDER IN DUE COURSE

2) WHETHER OR NOT THE VEIL OF CORPORATE ENTITY MAY BE INVOKED AND SUSTAINED DESPITE THE FRAUD AND DECEPTION OF AVELINO

HELD : 1) In this case, the CA is correct in finding that BA Finance meets all the foregoing requisites:

In the present recourse, on its face, (a) the Promissory Note, Exhibit A, is complete and regular; (b) the Promissory Note was endorsed by the VMSC in favor of the Appellee; (c) the Appellee, when it accepted the Note, acted in good faith and for value; (d) the Appellee was never informed, before and at the time the Promissory Note was endorsed to the Appellee, that the vehicle sold to the Defendants-Appellants was not delivered to the latter and that VMSC had already previously sold the vehicle to Esmeraldo Violago. The indorsement by VMSC to BA Finance appears likewise to be valid and regular. In the hands of one other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable.A holder in due course, however, holds the instrument free from any defect of title of prior parties and from defenses available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof. Since BA Finance is a holder in due course, petitioners cannot raise the defense of non-delivery of the object and nullity of the sale against the corporation. The NIL considers every negotiable instrument prima facie to have been issued for a valuable consideration. Thus, petitioners are liable to respondent corporation for the payment of the amount stated in the instrument.

2) VMSC is a family-owned corporation of which Avelino was president. Avelino committed fraud in selling the vehicle to petitioners, a vehicle that was previously sold to Avelinos other cousin, Esmeraldo. Nowhere in the pleadings did Avelino refute the fact that the vehicle in this case was already previously sold to Esmeraldo; he merely insisted that he cannot be held liable because he was not a party to the transaction. The fact that Avelino and Pedro are cousins, and that Avelino claimed to have a need to increase the sales quota, was likely among the factors which motivated the spouses to buy the car. Avelino, knowing fully well that the vehicle was already sold, and with abuse of his relationship with the spouses, still proceeded with the sale and collected the down payment from petitioners. The trial court found that the vehicle was not delivered to the spouses. Avelino clearly defrauded petitioners. His actions were the proximate cause of petitioners loss. He cannot now hide behind the separate corporate personality of VMSC to escape from liability for the amount adjudged by the trial court in favor of petitioners.

CASE DIGEST : VICMAR DEV. CORP VS ELACOSA

G.R. No. 202215, December 09, 2015

VICMAR DEVELOPMENT CORPORATION AND/OR ROBERT KUA, OWNER, AND ENGR. JUANITO C. PAGCALIWAGAN,¹ MANAGER, Petitioners, v. CAMILO ELARCOSA, MARLON BANDA, DANTE L. BALAMAD, RODRIGO COLANSE,² CHIQUITO PACALDO, ROBINSON PANAGA, JUNIE ABUGHO, SBLVERIO NARISMA, ARMANDO GONZALES, TEOFILO ELBINA, FRANCISCO BAGUIO, GELVEN RHYAN RAMOS, JULITO SIMAN, RECARIDO⁴ PANES, JESUS TINSAY, AGAPITO CANAS, JR., OLIVER LOBAYNON, SIMEON BAGUIO, JOSEPH SALCEDO, DONIL INDINO, WILFREDO GULBEN, JESRILE⁵ TANIO, RENANTE PAMON, RICHIE⁶ GULBEN, DANIEL ELLO, REXY DOFELIZ, RONALD NOVAL, NORBERTO BELARGA, ALLAN BAGUIO, ROBERTO PAGUICAN, ROMEO⁷ PATOY, ROLANDO TACBOBO, WILFREDO LADRA, RUBEN PANES, RUEL CABANDAY, AND JUNARD⁸ABUGHO, Respondent.

FACTS : Respondents alleged that Vicmar, a domestic corporation engaged in manufacturing of plywood for export and for local sale. They averred that Vicmar has two branches, Top Forest Developers, Incorporated (TFDI) and Greenwood International Industries, Incorporated (GUI) located in the same compound where Vicmar operated. According to respondents, Vicmar employed some of them as early as 1990 and since their engagement they had been performing the heaviest and dirtiest tasks in the plant operations. Respondents declared that Vicmar paid them minimum wage and a small amount for overtime but it did not give them benefits as required by law, such as Philhealth, Social Security System, 13th month pay, holiday pay, rest day and night shift differential. They added that Vicmar employed more than 200 regular employees and more than 400 "extra" workers. Respondents claimed that they were illegally dismissed after "vicmar learned that they instituted the subject Complaint through the simple expedience of not being scheduled for work. Even those persons associated with them were dismissed. They also asserted that Vicmar did not comply with the twin notice requirement in dismissing employees

Respondents contended that while Vicmar, TFDI and Gin were separately registered with the SEC. they were involved in the same business, located in the same compound, owned by one person, had one resident manager, and one and the same administrative department, personnel and finance sections. They claimed that the employees of these companies were identified as employees of Vicmar even if they were assigned in TFDI or GIII

ISSUE: WON Vicmar TFDI and Gin can be consdiered as one entity

HELD: The Court also gives merit to the finding of the CA that Vicmar is the employer of respondents despite the allegations that a number of them were assigned to the branches of Vicmar. Petitioners failed to refute the contention that Vicmar and its branches have the same owner and management - which included one resident manager, one administrative department, one and the same personnel and finance sections. Notably, all respondents were employed by the same plant manager, who signed their identification cards some of whom were under Vicmar, and the others under TFDI.

Where it appears that business enterprises are owned, conducted and controlled by the same parties, law and equity will disregard the legal fiction that these corporations are distinct entities and shall treat them as one. This is in order to protect the rights of third persons, as in this case, to safeguard the rights of respondents