Busorga Cases

8/13/2019 Busorga Cases

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Busorga cases

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. !"#$" Septe%be& !"' ""(

S)N *U)N STRUCTUR)+ )ND STEE+ F),RIC)TORS' INC.'petitione&'

-s.

COURT OF )PPE)+S' MOTORIC S)+ES CORPOR)TION'NENIT) +EE GRUEN,ERG' )C+ DEVE+OPMENT CORP. an/

*NM RE)+T0 )ND DEVE+OPMENT CORP.' &espon/ents.

P)NG)NI,)N' *.1

Ma2 co&po&ate t&easu&e&' b2 he&self an/ 3ithout an2 autho&i4ationf&o% he boa&/ of /i&ecto&s' -ali/l2 sell a pa&cel of lan/ o3ne/ b2 theco&po&ation5. Ma2 the -eil of co&po&ate fiction be pie&ce/ on the %e&e6&oun/ that al%ost all of the sha&es of stoc7 of the co&po&ation a&eo3ne/ b2 sai/ t&easu&e& an/ he& husban/5

The Case

These 8uestions a&e ans3e&e/ in the ne6ati-e b2 this Cou&t in&esol-in6 the Petition fo& Re-ie3 on Ce&tio&a&i befo&e us' assailin6the Ma&ch (' ""9 Decision of the Cou&t of )ppeals ! in C) GRCV No. #:(; 3hich' in tu&n' %o/ifie/ the *ul2 (' ""# Decision ofthe Re6ional T&ial Cou&t of Ma7ati' Met&o Manila' ,&anch :< < in Ci-ilCase No. ("=


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Plaintiff=appellant San *uan St&uctu&al an/ Steel Fab&icato&s' Inc.?sa%en/e/ co%plaint alle6e/ that on # Feb&ua&2 "("' plaintiff=appellant ente&e/ into an a6&ee%ent 3ith /efen/ant=appellee

Moto&ich Sales Co&po&ation fo& the t&ansfe& to it of a pa&cel of lan/i/entifie/ as +ot


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that the T&ansfe& of Ri6htsDee/ of )ssi6n%ent 3ill be si6ne/ onl2upon &eceipt of cash pa2%ent thus the2 a6&ee/ that if the pa2%entbe in chec7' the2 3ill %eet at a ban7 /esi6nate/ b2 plaintiff=appellant3he&e the2 3ill encash the chec7 an/ si6n the T&ansfe& ofRi6htsDee/. o3e-e&' plaintiff=appellant info&%e/ M&s. G&uenbe&6

of the alle6e/ a-ailabilit2 of the chec7' b2 phone' onl2 afte& ban7in6hou&s.

On the basis of the e-i/ence' the cou&t a 8uo &en/e&e/ the u/6%entappeale/ f&o%H' /is%issin6 plaintiff=appellant?s co%plaint' &ulin6 that1

The issue to be &esol-e/ is1 3hethe& plaintiff ha/ the &i6ht to co%pel/efen/ants to eecute a /ee/ of absolute sale in acco&/ance 3iththe a6&ee%ent of Feb&ua&2 #' "("1 an/ if so' 3hethe& plaintiff is

entitle/ to /a%a6e.

)s to the fi&st 8uestion' the&e is no e-i/ence to sho3 that /efen/antNenita +ee G&uenbe&6 3as in/ee/ autho&i4e/ b2 /efen/antco&po&ation. Moto&ich Sales' to /ispose of that p&ope&t2 co-e&e/ b2T.C.T. No. A


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IN >ITNESS >EREOF' the pa&ties ha-e he&eunto set thei& han/sthis #th /a2 of Feb&ua&2' "(" at G&eenhills' San *uan' Met&oManila' Philippines.

MOTORIC S)+ES CORPOR)TION S)N *U)N STRUCTUR)+ STEE+ F),RIC)TORS

TR)NSFEROR TR)NSFEREE

HSGD. HSGD.

,2. NENIT) +EE GRUEN,ERG ,21 )NDRES T. CO

T&easu&e& P&esi/ent

Si6ne/ In the p&esence of1

HSGD. HSGD.

LLLLLLLLLLLLL LLLLLLLLLLL :

In its &ecou&se befo&e the Cou&t of )ppeals' petitione& insiste/1

. )ppellant is entitle/ to co%pel the appellees to eecute aDee/ of )bsolute Sale in acco&/ance 3ith the )6&ee%ent ofFeb&ua&2 #' "("'

!. Plaint if f is entit le/ to /a%a6es. 9

)s state/ ea&lie&' the Cou&t of )ppeals /ebun7e/ petitione&?sa&6u%ents an/ affi&%e/ the Decision of the RTC 3ith the%o/ification that Respon/ent Nenita +ee G&uenbe&6 3as o&/e&e/ to&efun/ P;;';;; to petitione&' the a%ount &e%itte/ asJ/o3npa2%entJ o& Jea&nest %one2.J ence' this petition befo&e us. (

The Issues

,efo&e this Cou&t' petitione& &aises the follo3in6 issues1

I. >hethe& o& not the /oct&ine of pie&cin6 the -eil of co&po&atefiction is applicable in the instant case

II. >hethe& o& not the appellate cou&t %a2 consi/e& %atte&s3hich the pa&ties faile/ to &aise in the lo3e& cou&t

III. >hethe& o& not the&e is a -ali/ an/ enfo&ceable cont&actbet3een the petitione& an/ the &espon/ent co&po&ation


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IV. >hethe& o& not the Cou&t of )ppeals e&&e/ in hol/in6 thatthe&e is a -ali/ co&&ectionsubstitution of ans3e& in the t&ansc&ipt ofsteno6&aphic noteHs.

V. >hethe& o& not &espon/ents a&e liable fo& /a%a6es an/atto&ne2?s fees "

The Cou&t s2nthesi4e/ the fo&e6oin6 an/ 3ill thus /iscuss the%se&iati% as follo3s1

. >as the&e a -ali/ cont&act of sale bet3een petitione& an/Moto&ich5

!. Ma2 the /oct&ine of pie&cin6 the -eil of co&po&ate fiction beapplie/ to Moto&ich5

e /o not a6&ee.

T&ue' G&uenbe&6 an/ Co si6ne/ on Feb&ua&2 #' "("' the

)6&ee%ent' acco&/in6 to 3hich a lot o3ne/ b2 Moto&ich SalesCo&po&ation 3as pu&po&te/l2 sol/. Such cont&act' ho3e-e&' cannotbin/ Moto&ich' because it ne-e& autho&i4e/ o& &atifie/ such sale.

) co&po&ation is a u&i/ical pe&son sepa&ate an/ /istinct f&o% itsstoc7hol/e&s o& %e%be&s. )cco&/in6l2' the p&ope&t2 of theco&po&ation is not the p&ope&t2 of its stoc7hol/e&s o& %e%be&s an/%a2 not be sol/ b2 the stoc7hol/e&s o& %e%be&s 3ithout ep&essautho&i4ation f&o% the co&po&ation?s boa&/ of /i&ecto&s. ; Section !EREFORE' the petition is he&eb2 DENIED an/ the assaile/Decision is )FFIRMED.

SO ORDERED.


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SUPREME COURT

Manila

TIRD DIVISION

G.R. No. .@UI*)NO an/ R)0MOND P. VENTUR)' petitione&s'

-s.

UNIVERS)+ INTERN)TION)+ GROUP OF T)I>)N' UIGINTERN)TION)+ DEVE+OPMENT CORPOR)TION an/ SU,IC,)0 GO+F )ND COUNTR0 C+U,' Inc.' &espon/ents.

D E C I S I O N

P)NG)NI,)N' *.1

) stipulation autho&i4in6 a pa&t2 to et&au/iciall2 &escin/ a cont&actan/ to &eco-e& possession of the p&ope&t2 in case of cont&actualb&each is la3ful. ,ut 3hen a -ali/ obection is &aise/' a u/icial/ete&%ination of the issue is still necessa&2 befo&e a ta7eo-e& %a2be allo3e/. In the p&esent case' ho3e-e&' &espon/ents /o not /en2that the&e 3as such a b&each of the )6&ee%ent the2 %e&el2 a&6ue

that the stipulation allo3in6 a &escission an/ a &eco-e&2 ofpossession is -oi/. ence' the othe& pa&t2 %a2 -ali/l2 enfo&ce suchstipulation.

The Case

,efo&e us is a Petition un/e& Rule #$ of the Rules of Cou&t assailin6the Dece%be&


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JThe Inunction bon/ is fie/ at One Million Pesos AP';;;';;;.;;B incash o& su&et2 bon/ p&o-i/e/ b2 a su&et2 co%pan2 of &eputablesol-enc2.J

The secon/ RTC O&/e&' also /ate/ Octobe& EREFORE' an/ the fo&e6oin6 pH&e%ises consi/e&e/'Defen/ants )%en/e/ an/ Consoli/ate/ Motion To Dis%iss ishe&eb2 DENIED fo& lac7 of %e&it.

JThe Motion to Dis%iss file/ b2 Richa&/ *. Go&/on is H6&ante/ insofa&

as the suit a6ainst hi% is conce&ne/ in his p&i-ate o& pe&sonalcapacit2. e shall' ho3e-e&' &e%ain as /efen/ant in his officialcapacit2.J

The Facts

The un/ispute/ facts a&e su%%a&i4e/ b2 the Cou&t of )ppeals asfollo3s1(

JOn !$ Ma2 ""$' a +ease an/ De-elop%ent )6&ee%ent 3aseecute/ b2 &espon/ent UIG an/ petitione& S,M) un/e& 3hich&espon/ent UIG shall lease f&o% petitione& S,M) the ,inictican GolfCou&se an/ appu&tenant facilities the&eto to be t&ansfo&%e/ into a3o&l/ class (=hole 6olf cou&se' 6olf club&eso&t' co%%e&cial tou&is%an/ &esi/ential cente&. The cont&act in pe&tinent pa&t contains p&e=te&%ination clauses' 3hich p&o-i/e1

Section !!. Default

AaB The follo3in6 acts an/ o%issions shall constitute /efault b2Tenant Aeach an E-ent of DefaultB1

AiiB Tenant o& an2 of its Subsi/ia&ies shall co%%it a %ate&ial b&eacho& -iolation of an2 of the con/itions' co-enants o& a6&ee%ents he&ein%a/e b2 Tenant o& such Subsi/ia&2 Aothe& than those /esc&ibe/ inSections !!.! Ha Hl an/ such -iolation o& failu&e shall continue fo&thi&t2 A


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JOn # Feb&ua&2 ""9' Petitione& S,M) sent a lette& to p&i-ate&espon/ent UIG callin6 its attention to its alle6e/ se-e&al cont&actual-iolations in -ie3 of p&i-ate &espon/ent UIGs failu&e to /eli-e& its-a&ious cont&actual obli6ations' p&i%a&il2 its failu&e to co%plete the&ehabilitation of the Golf Cou&se in ti%e fo& the )PEC +ea/e&sSu%%it' an/ to pa2 accu%ulate/ lease &entals an/ utilities' an/ topost the &e8ui&e/ pe&fo&%ance bon/. Respon/ent UIG' in its lette& of9 Feb&ua&2 ""9' inte&pose/ as an ecuse the alle6e/ /efault of its%ain cont&acto& FF C&u4' &esultin6 in thei& filin6 of suit a6ainst thelatte&' an/ co%%itte/ itself to co%pl2 3ith its obli6ations 3ithin a fe3/a2s. P&i-ate &espon/ent UIG' ho3e-e&' faile/ to co%pl2 3ith itsun/e&ta7in6s. On 9 Ma&ch ""9' petitione& S,M) sent a lette& top&i-ate &espon/ent UIG /ecla&in6 the latte& in /efault of itscont&actual obli6ations to S,M) un/e& Section !!. of the +ease an/De-elop%ent )6&ee%ent an/ &e8ui&e/ it to sho3 cause 3h2petitione& S,M) shoul/ not p&e=te&%inate the a6&ee%ent. P&i-ate

&espon/ents pai/ the &ental a&&ea&a6es but the othe& obli6ations&e%aine/ unsatisfie/.

JOn ( Septe%be& ""9' a lette& of p&e=te&%ination 3as se&-e/ b2petitione& S,M) &e8ui&in6 p&i-ate &espon/ent UIG to -acate thep&e%ises. On ! Septe%be& ""9' petitione& se&-e/ the fo&%alnotice of closu&e of Subic ,a2 Golf Cou&se an/ too7 o-e& possessionof the subect p&e%ises. On e-en /ate' p&i-ate &espon/ent file/ aco%plaint a6ainst petitione& S,M) fo& Inunction an/ Da%a6es 3ithp&a2e& fo& a 3&it of te%po&a&2 &est&ainin6 o&/e& an/ 3&it of p&eli%ina&2

inunction. On < Octobe& ""9' &espon/ent cou&t issue/ the t3oassaile/ o&/e&s subect of the petition.J

Rulin6 of the Cou&t of )ppeals

The Cou&t of )ppeals uphel/ the capacit2 to sue of Respon/entUni-e&sal Inte&national G&oup of Tai3an AUIGB because petitione&s'

ha-in6 ente&e/ into a +ease De-elop%ent )6&ee%ent A+D)B 3ith it'3e&e estoppe/ f&o% 8uestionin6 its stan/in6. It also hel/ thatRespon/ents UIG Inte&national De-elop%ent Co&po&ation AUIGDCBan/ Subic ,a2 Golf an/ Count&2 Club' Inc.' AS,GCCIB 3e&e &ealpa&ties in inte&est because the2 ha/ %a/e substantial in-est%ents inthe -entu&e an/ ha/ been in possession of the p&ope&t2 3hen Subic,a2 Met&opolitan )utho&it2 AS,M)B &escin/e/ the +D).

+i7e3ise' it /ebun7e/ petitione&s sub%ission that Section ! of R)9!!9" 3as Ja blan7et p&osc&iption a6ainst the issuance of an2 an/ allinuncti-e &eliefHs a6ainst S,M).J It sai/ that J those actions 3hicha&e &e%o-e/ f&o% the state/ obecti-es of the co&po&ate entit2 cannot be place/ be2on/ the pale of p&ohibito&2 3&its.J;

>hile it conce/e/ that the la3 allo3e/ et&au/icial &escission of acont&act' it &ule/ that Jno &ationali4ation 3as possibleJ fo& theet&au/icial ta7in6 of possession. It &easone/ that Jno one %a2 ta7ethe la3 into his o3n han/s. To hol/ othe&3ise 3oul/ be p&o/ucti-e ofnothin6 but %ischief an/ chaos.J

It also &eecte/ petitione&s &eliance on Consin6 -. *a%an/&e' in3hich the Sup&e%e Cou&t allo3e/ a cont&actual stipulation 6i-in6 thelesso& the &i6ht to ta7e possession of the lease/ p&ope&t2 3ithoutnee/ of cou&t o&/e&. It eplaine/ that Consin6 3as a Ju/icial

abe&&ation' not co%%on but not un7no3n in the bo/2 of ou&u&isp&u/ence' 3hich la2s /o3n a &ulin6 cont&a&2 to the teachin6 ofthe 6&eate& %ass of cases.J!

Fu&the&%o&e' it hel/ that the issuance of the >&it of P&eli%ina&2Inunction /i/ not /ispose of the %ain issue. Conclu/in6' it obse&-e/that J3e cannot an/ shoul/ not sen/ the %essa6e to fo&ei6ne&s 3ho/o business he&e that 3e a&e a 6&oup of in6oists 3ho cannot loo7


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be2on/ ou& na&&o3 inte&ests an/ %ust loo7 at e-e&2 st&an6e& 3ith a3a&2 e2e an/ t&eat the% 3ith une-en han/s.J

Disa6&eein6 3ith the abo-e u/6%ent' petitione&s ele-ate/ the %atte&

to this Cou&t.hethe& o& not &espon/ent cou&t co%%itte/ a &e-e&sible e&&o& in&ulin6 that p&i-ate &espon/ents haH/ the capacit2 to sue an/ possess%ate&ial inte&est to institute an action a6ainst petitione&s.

IV.

J>hethe& o& not the &espon/ent cou&t co%%itte/ a &e-e&sible e&&o& b2sanctionin6 /epa&tu&e b2 the t&ial cou&t f&o% the accepte/ an/ usualcou&se of u/icial p&ocee/in6s b2 failin6 to %a7e an2 &ulin6 on theessential ele%ents of inuncti-e &elief consistin6 of1 AB a clea& an/un%ista7able &i6ht an/ A!B i&&epa&able /a%a6e on the pa&t of thep&i-ate &espon/ents.

V.

J>hethe& o& not &espon/ent cou&t co%%itte/ a &e-e&sible e&&o& in/epa&tin6 f&o% the accepte/ an/ usual cou&se of u/icial p&ocee/in6sb2 sanctionin6 the ille6al p&oce/u&e of ta7in6 possession of thesubect p&e%ises f&o% petitione& S,M) an/ t&ansfe&&in6 it into the


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han/s of the p&i-ate &espon/ents' althou6h the &i6hts of the latte&haH/ not 2et been clea&l2 establishe/.

VI.

J>hethe& o& not &espon/ent cou&t co%%itte/ a &e-e&sible e&&o& b2/epa&tin6 f&o% the accepte/ an/ usual cou&se of u/icial p&ocee/in6sb2 sustainin6 the 6&ant of inuncti-e &elief 3hich effecti-el2 p&eu/6e/the %e&its of the %ain case.

VII.

J>hethe& o& not &espon/ent cou&t co%%itte/ a &e-e&sible e&&o& b2/epa&tin6 f&o% the accepte/ an/ usual cou&se of u/icial p&ocee/in6sb2 sustainin6 the 6&ant of inuncti-e &elief in fa-o& of the p&i-ate&espon/ents althou6h the latte& H3e&e clea&l2 not entitle/ the&eto asthe2 ca%e befo&e the cou&ts 3ith unclean han/s.

VIII.

J>hethe& o& not in the e-ent of a no &e-e&sible e&&o& u/6%ent onthe 8uestione/ /ecision of the &espon/ent cou&t' this ono&ableDi-ision of the Sup&e%e Cou&t %i6ht %o/if2 o& e-en &e-e&se the/oct&ines an/ p&inciples of la3 lai/ /o3n b2 the Sup&e%e Cou&t inse-e&al lea/in6 cases' in -iolation of Section #' )&ticle VIII of the"(9 Philippine Constitution.

I.

J>hethe& o& not in the e-ent of a no &e-e&sible e&&o& u/6%ent' thisono&able Di-ision of the Sup&e%e Cou&t %i6ht un3ittin6l2 cause6&eat loss o& i&&epa&able /a%a6e to the 6o-e&n%ent because such a&ulin6 ten/He/ to sen/ a 3&on6 si6nal that Philippine Cou&ts H3oul/&e3a&/ &athe& than punish fo&ei6n in-esto&s 3ho %ise&abl2 faile/ toco%pl2 3ith thei& cont&actual co%%it%ents to /e-elop -ital6o-e&n%ent assets.J

Distillin6 the abo-e=8uote/ assi6n%ent of e&&o&s' 3e fin/ t3o %ainissues befo&e us1 AaB 3hethe& the /enial of petitione&s Motion toDis%iss 3as co&&ect' an/ AbB 3hethe& the issuance of the >&it ofP&eli%ina&2 Man/ato&2 an/ P&ohibito&2 Inunction 3as p&ope&.

Un/e& the fi&st issue' the Cou&t shall &esol-e AB 3hethe& Respon/entUIG has the capacit2 to sue' A!B 3hethe& Respon/ents UIGDC an/S,GCCI a&e &eal pa&ties in inte&est' an/ A&it ofP&eli%ina&2 Man/ato&2 an/ P&ohibito&2 Inunction.


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G&otahn GM, -. Isnani" an/ Co%%unication Mate&ials an/Desi6n -. C).!; In )nta% Consoli/ate/ -. C)'! the Cou&t also&eecte/ a si%ila& a&6u%ent an/ note/ that Jit is a co%%on plo2 of/efaultin6 local co%panies 3hich a&e sue/ b2 unlicense/ fo&ei6nco%panies not en6a6e/ in business in the Philippines to in-o7e lac7of capacit2 to sue.J

In this case' S,M) is estoppe/ f&o% 8uestionin6 the capacit2 to sueof UIG. In ente&in6 into the +D) 3ith UIG' S,M) effecti-el2&eco6ni4e/ its pe&sonalit2 an/ capacit2 to institute the suit befo&e thet&ial cou&t.

AbB Mate&ial Inte&est of

S,GCCI an/ UIGDC

Section !' Rule < of the ""9 Rules of Cou&t' /efines a &eal pa&t2 ininte&est in this %anne&1

JSec. !. Pa&ties in Inte&est. = ) &eal pa&t2 in inte&est is the pa&t2 3hostan/s to be benefite/ o& inu&e/ b2 the u/6%ent of the suit' o& thepa&t2 entitle/ to the a-ails of the suit. Unless othe&3ise autho&i4e/ b2la3 o& these Rules' e-e&2 action %ust be p&osecute/ o& /efen/e/ in

the na%e of the &eal pa&t2 in inte&est.J!!

S,M) conten/s that UIGDC is not a &eal pa&t2 in inte&est because it3as not p&i-2 to the +D) bet3een UIG an/ S,M). It fu&the& alle6esthat it /i/ not app&o-e the assi6n%ent to UIGDC of UIGs &i6htsthe&eun/e&. In li7e %anne&' S,GCCI ha/ no inte&est in the +D)because it onl2 /e&i-e/ its &i6hts f&o% the De-elop%ent )6&ee%ent itha/ ente&e/ into 3ith UIGDC.

>e a&e not pe&sua/e/. The C) %a/e a factual fin/in6 that UIGDCan/ S,GCCI 3e&e in possession of the p&ope&t2 3hen S,M) too7o-e&. Mo&eo-e&' it also foun/ that the2 ha/ al&ea/2 %a/e substantialin-est%ents in the p&oect. >e fin/ no &eason at this ti%e to ustif2 a/iffe&ent conclusion. In -ie3 of these ci&cu%stances' 3e a6&ee 3iththe C) that UIGDC an/ S,GCCI stan/ to be benefitte/ o& inu&e/ b2the p&esent suit an/ shoul/ be /ee%e/ &eal pa&ties in inte&est.!e a&e not pe&sua/e/. >e a6&ee 3ith the C) that the p&esentp&o-ision is not a blan7et p&ohibition of the issuance of an inuncti-e&elief a6ainst an2 S,M) action. Section ! of R) 9!!9 p&ohibits onl2such cou&t o&/e&s 3hich &est&ain the Ji%ple%entation of the p&oectsfo& the con-e&sion into alte&nati-e p&o/ucti-e uses of the %ilita&2&ese&-ations.J

The >&it issue/ in this case /i/ not &est&ain o& enoin thei%ple%entation of an2 of S,M)s con-e&sion p&oects. In fact' itallo3e/ UIG to p&ocee/ 3ith the /e-elop%ent of the 6olf cou&sepu&suant to the +D). It %e&el2 &est&aine/ S,M) f&o% ta7in6 o-e& the6olf cou&se. Clea&l2' the assaile/ RTC O&/e& /i/ not see7 to /ela2 o&ha%pe& the con-e&sion of the fo&%e& na-al base into ci-ilian uses.

Mo&eo-e&' the assaile/ >&it of P&eli%ina&2 Inunction 3as issue/ inconnection 3ith a /ispute pe&tainin6 to the co&&ect inte&p&etation ofthe +D). To /i-est the t&ial cou&t of that autho&it2 is to 6i-e S,M)unha%pe&e/ /isc&etion to /is&e6a&/ its cont&actual obli6ations un/e&the 6uise of i%ple%entin6 its p&oects. In/ee/' Section ! of R)9!!9 shoul/ not ba& u/icial sc&utin2 of i&&e6ula&ities alle6e/l2co%%itte/ b2 S,M).!:

AbB Ri6ht of Respon/ents to Inuncti-e Relief

) 3&it of %an/ato&2 inunction &e8ui&es the pe&fo&%ance of apa&ticula& act!9 an/ is 6&ante/ onl2 upon a sho3in6 of the follo3in6&e8uisites1

J. The in-asion of the &i6ht is %ate&ial an/ substantial

!. The &i6ht of a co%plainant is clea& an/ un%ista7able.


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In this case' the fi&st assaile/ RTC O&/e& /ate/ Octobe& NER to &eco-e& et&a=u/iciall2' ph2sical possession of the lan/'buil/in6 an/ othe& i%p&o-e%ents 3hich a&e subect of this cont&act'


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an/ to ta7e possession also et&a=u/iciall2 3hate-e& pe&sonalp&ope&ties %a2 be foun/ 3ithin the afo&esai/ p&e%ises f&o% the /ateof sai/ failu&e to ans3e& fo& 3hate-e& unfulfille/ %oneta&2 obli6ations,U0ER %a2 ha-e 3ith O>NER an/ this cont&act shall beconsi/e&e/ as 3ithout fo&ce an/ effect also f&o% sai/ /ate .J

,ecause Qulueta 3as a subse8uent Decision' it suppose/l2o-e&tu&ne/ the J/ia%et&icall2 oppose/J ea&lie& &ulin6 in Consin6 -.*a%an/&e'


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not e-en %a7e an2 obse&-ation that &espon/ents ha/ cont&o-e&te/S,M)s clai%.

Clea&l2' &espon/ents stan/ 3as not a -ali/ o& sufficient obection to

S,M)s ee&cise of its &i6ht. In/ee/' sustainin6 thei& clai% 3oul/un/ul2 /i%inish the fo&ce of such la3ful stipulation an/ allo3 pa&tiesto /is&e6a&/ it at 3ill 3ithout an2 -ali/ &eason. In this case'&espon/ents %ise&abl2 faile/ to 6i-e an2 se%blance of obection tothe %e&its of S,M)s alle6ations. Mo&eo-e&' 3e fin/ no a/e8uatesho3in6 of &esistance to S,M)s i%ple%entation of the subectstipulation.

Un/e& the ci&cu%stances' S,M) sho3e/ that it ha/ a &i6ht not onl2to &escin/ the cont&act' but also to ta7e o-e& the p&ope&t2. On the

othe& han/' &espon/ents ha-e not sho3n an2 Jclea& an/un%ista7able &i6htJ to &est&ain S,M) f&o% enfo&cin6 the cont&actualstipulation. In/ee/' the2 ha-e offe&e/ no obection to S,M)salle6ations of cont&actual b&each. >ithout p&eu/6in6 thei& &i6ht tooffe& cont&o-e&tin6 e-i/ence /u&in6 the t&ial on the %e&its' the Cou&thol/s that the2 faile/ to /o so in thei& application fo& a 3&it ofp&eli%ina&2 inunction.

Epilo6ue

The Cou&t of )ppeals ep&esse/ its app&ehension that a &ulin6a6ainst UIG 3oul/ sen/ a %essa6e to fo&ei6n in-esto&s that 3e Ja&ea 6&oup of in6oists.J >e /o not sha&e that -ie3. *in6ois% is not anissue he&e. Fa& f&o% it. In pa&tiall2 &e-e&sin6 the C)' this Cou&t is%e&el2 pe&fo&%in6 its %an/ate to /o ustice an/ to appl2 the la3 tothe facts of the case. It is %e&el2 affi&%in6 the %essa6e that in thiscount&2' the &ule of la3 p&e-ails an/ cont&acts f&eel2 ente&e/ into'3hethe& b2 fo&ei6n o& b2 local in-esto&s' %ust be co%plie/ 3ith.

In/ee/' &ule of la3 an/ faithfulness in the pe&fo&%ance of cont&actsa&e che&ishe/ -alues e-e&23he&e.

>EREFORE' the Petition is pa&tiall2 GR)NTED' an/ the assaile/

Decision of the Cou&t of )ppeals REVERSED an/ SET )SIDEinsofa& as it affi&%e/ the >&it of P&eli%ina&2 Inunction issue/ b2 thet&ial cou&t. The sai/ >&it is he&eb2 +IFTED an/ the caseREM)NDED to the RTC fo& t&ial on the %e&its. In the %eanti%e'&espon/ents shall' upon finalit2 of this Decision' 2iel/ thepossession' the ope&ation an/ the %ana6e%ent of the subectp&ope&t2 to S,M). No costs.

SO ORDERED.


SUPREME COURT

Manila

SECOND DIVISION

G.R. No. $;!(< )p&il :' !;;(

R0UICI 0)M)MOTO' petitione&'

-s.

NISINO +E)TER INDUSTRIES' INC. an/ IKUO NISINO'&espon/ents.


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D E C I S I O N

C)RPIO MOR)+ES' *.1

In "(a7o Ente&p&ises Manila'Inco&po&ate/ A>)KOB' a co&po&ation en6a6e/ p&incipall2 in leathe&tannin6' no3 7no3n as Nishino +eathe& In/ust&ies' Inc. AN+IIB' one ofhe&ein &espon/ents.

In "(9' 0a%a%oto an/ the othe& &espon/ent' I7uo NishinoANishinoB' also a *apanese national' fo&6e/ a Me%o&an/u% of

)6&ee%ent un/e& 3hich the2 a6&ee/ to ente& into a oint -entu&e3he&ein Nishino 3oul/ ac8ui&e such nu%be& of sha&es of stoc7e8ui-alent to 9; of the autho&i4e/ capital stoc7 of >)KO.

E-entuall2' Nishino an/ his b&othe& 0oshinobu Nishino A0oshinobuBac8ui&e/ %o&e than 9; of the autho&i4e/ capital stoc7 of >)KO'&e/ucin6 0a%a%otos in-est%ent the&ein to' b2 his clai%' ;'! lessthan ; acco&/in6 to Nishino.)KO 3as late& chan6e/ to' as &eflecte/ea&lie&' its cu&&ent na%e N+II.

Ne6otiations subse8uentl2 ensue/ in li6ht of a planne/ ta7eo-e& ofN+II b2 Nishino 3ho 3oul/ bu2=out the sha&es of stoc7 of 0a%a%oto.In the cou&se of the ne6otiations' 0oshinobu an/ Nishinos counsel

)tt2. E%%anuel G. Doce A)tt2. DoceB a/-ise/ 0a%a%oto b2 lette&/ate/ Octobe&


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unit

Fo&7lift

=

unit

D&u%s

=

# units

To66lin6 %achine

=

! units

Re6a&/in6 the abo-e %achines' 2ou %a2 ta7e the% out 3ith 2ou Afo&2ou& o3n use an/ saleB if 2ou 3ant' p&o-i/e/' the -alue of such%achines is /e/ucte/ f&o% 2ou& an/ >a7os capital cont&ibutions'3hich 3ill be pai/ to 2ou.

Kin/l2 let %e 7no3 of 2ou& co%%ents on all the abo-e' soonest.

$ AE%phasis an/ un/e&sco&in6 supplie/B

On the basis of such lette&' 0a%a%oto atte%pte/ to &eco-e& the%achine&ies an/ e8uip%ent 3hich 3e&e' b2 0a%a%otos a/%ission'pa&t of his in-est%ent in the co&po&ation': but he 3as f&ust&ate/ b2&espon/ents' /&a3in6 0a%a%oto to file on *anua&2 $' ""! befo&ethe Re6ional T&ial Cou&t ARTCB of Ma7ati a co%plaint9 a6ainst the%fo& &eple-in.

,&anch #$ of the Ma7ati RTC issue/ a 3&it of &eple-in afte&0a%a%oto file/ a bon/. (

In thei& )ns3e& 3ith Counte&clai%'" &espon/ents clai%e/ that the%achine&ies an/ e8uip%ent subect of &eple-in fo&% pa&t of

0a%a%otos capital cont&ibutions in consi/e&ation of his e8uit2 inN+II an/ shoul/ thus be t&eate/ as co&po&ate p&ope&t2 an/ that theabo-e=sai/ lette& of )tt2. Doce to 0a%a%oto 3as %e&el2 a p&oposal'Jcon/itione/ on H0a%a%otos sell=out to . . . Nishino of his enti&ee8uit2'J; 3hich p&oposal 3as 2et to be autho&i4e/ b2 thestoc7hol/e&s an/ ,oa&/ of Di&ecto&s of N+II.

,2 3a2 of Counte&clai%' &espon/ents' alle6in6 that the2 suffe&e//a%a6e /ue to the sei4u&e -ia the i%ple%entation of the 3&it of


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&eple-in o-e& the %achine&ies an/ e8uip%ent' p&a2e/ fo& the a3a&/to the% of %o&al an/ ee%pla&2 /a%a6es' atto&ne2s fees an/liti6ation epenses' an/ costs of suit.

The t&ial cou&t' b2 Decision of *une "' ""$' /eci/e/ the case infa-o& of 0a%a%oto' /isposin6 thus1

>EREFORE' u/6%ent is he&eb2 &en/e&e/1 AB /ecla&in6 plaintiffas the &i6htful o3ne& an/ possesso& of the %achine&ies in 8uestion'an/ %a7in6 the 3&it of sei4u&e pe&%anent A!B o&/e&in6 /efen/ants topa2 plaintiff atto&ne2s fees an/ epenses of liti6ation in the a%ountof Fift2 Thousan/ Pesos AP$;';;;.;;B' Philippine Cu&&enc2 A


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U&6in6 this Cou&t to pie&ce the -eil of co&po&ate fiction' 0a%a%otoa&6ues' -i41

Du&in6 the ne6otiations' the issue as to the o3ne&ship of the

Machine&Hies ne-e& ca%e up. Neithe& /i/ the issue on the p&ope&p&oce/u&e to be ta7en to eecute the co%plete ta7e=o-e& of theCo%pan2 co%e up since I7uo' 0oshinobu' an/ 0a%a%oto 3e&e theo3ne&s the&eof' the p&esence of othe& stoc7hol/e&s bein6 onl2 fo& thepu&pose of co%pl2in6 3ith the %ini%u% &e8ui&e%ents of the la3.

>hat cou&se of action the Co%pan2 /eci/es to /o o& not to /o/epen/s not on the Jothe& %e%be&s of the ,oa&/ of Di&ecto&sJ. It/epen/s on 3hat I7uo an/ 0oshinobu /eci/e. The Co%pan2 is but a%e&e inst&u%entalit2 of I7uo Han/ 0oshinobu.!#

The Co%pan2 ha&/l2 hol/s boa&/ %eetin6s. It has an inacti-eboa&/' the /i&ecto&s a&e /i&ecto&s in na%e onl2 an/ a&e the&e to /othe bi//in6 of the NishHinos' nothin6 %o&e. Its %inutes a&e pape&%inutes. !$

The fact that the pa&ties sta&te/ at a 9;=hile the -eil of sepa&ate co&po&ate pe&sonalit2 %a2 be pie&ce/

3hen the co&po&ation is %e&el2 an a/unct' a business con/uit' o&alte& e6o of a pe&son'!9 the %e&e o3ne&ship b2 a sin6le stoc7hol/e&of e-en all o& nea&l2 all of the capital stoc7s of a co&po&ation is not b2itself a sufficient 6&oun/ to /is&e6a&/ the sepa&ate co&po&atepe&sonalit2.!(

The ele%ents /ete&%inati-e of the applicabilit2 of the /oct&ine ofpie&cin6 the -eil of co&po&ate fiction follo31

J. Cont&ol' not %e&e %ao&it2 o& co%plete stoc7 cont&ol' butco%plete /o%ination' not onl2 of finances but of polic2 an/ businessp&actice in &espect to the t&ansaction attac7e/ so that the co&po&ateentit2 as to this t&ansaction ha/ at the ti%e no sepa&ate %in/' 3ill o&eistence of its o3n

!. Such cont&ol %ust ha-e been use/ b2 the /efen/ant to co%%itf&au/ o& 3&on6' to pe&petuate the -iolation of a statuto&2 o& othe&positi-e le6al /ut2' o& /ishonest an/ unust act in cont&a-ention of theplaintiffs le6al &i6hts an/


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co&po&ation ope&ate/ an/ the in/i-i/ual /efen/ants &elationship tothat ope&ation.J!" AItalics in the o&i6inal e%phasis an/ un/e&sco&in6supplie/B

In &elation to the secon/ ele%ent' to /is&e6a&/ the sepa&ate u&i/icalpe&sonalit2 of a co&po&ation' the 3&on6/oin6 o& unust act incont&a-ention of a plaintiffs le6al &i6hts %ust be clea&l2 an/con-incin6l2 establishe/ it cannot be p&esu%e/.ithout a/e%onst&ation that an2 of the e-ils sou6ht to be p&e-ente/ b2 the/oct&ine is p&esent' it /oes not appl2.

>hat 3as thus p&offe&e/ to 0a%a%oto 3as not a p&o%ise' but a%e&e offe&' subect to his acceptance. >ithout acceptance' a %e&eoffe& p&o/uces no obli6ation.


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the e-ent 3hich constitutes the con/ition.J In the case at ba&' the&e isno sho3in6 of co%pliance 3ith the con/ition fo& allo3in6 0a%a%ototo ta7e the %achine&ies an/ e8uip%ent' na%el2' his a6&ee%ent tothe /e/uction of thei& -alue f &o% his capital cont&ibution /ue hi% inthe bu2=out of his inte&ests in N+II. 0a%a%otos alle6ation that hea6&ee/ to the con/ition


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The assaile/ C) /ecision affi&%e/ the Ma&ch !' !;;9< an/ *une 9'!;;9# O&/e&s of the Re6ional T&ial Cou&t ARTCB of Manila' ,&anch!' in Ci-il Case No. ""="EREFORE' consistent 3ith Section $' Rule ( of the ""9 Rulesof Ci-il P&oce/u&e' an/ b2 p&epon/e&ance of e-i/ence' u/6%ent ishe&eb2 &en/e&e/ in fa-o& of the plaintiff' o&/e&in6 Ku7an' Inc.1

. to pa2 the su% of ONE MI++ION T>O UNDRED ONETOUS)ND SEVEN UNDRED T>ENT0 FOUR PESOSAP'!;'9!#.;;B 3ith le6al inte&est at ! pe& annu% f&o% Feb&ua&29' """ until full pa2%ent

!. to pa2 the su% of FIFT0 TOUS)ND PESOS AP$;';;;.;;B as%o&al /a%a6es

ENT0 TOUS)ND PESOS' AP!;';;;.;;B as&easonable atto&ne2s fees an/

#. to pa2 the su% of SEVEN TOUS)ND NINE UNDRED SIT0

PESOS an/ SI CENT)VOS AP9'":;.;:B as liti6ation epenses.

Fo& lac7 of factual foun/ation' the counte&clai% is DISMISSED.

IT IS SO ORDERED.9


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33/63

On *anua&2 !


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The p&eli%ina&2 8uestion that %ust be ans3e&e/ is 3hethe& o& notthe t&ial cou&t can' afte& a/u/6in6 Ku7an' Inc. liable fo& a su% of%one2 in a f inal an/ eecuto&2 u/6%ent' eecute such u/6%ent/ebt a6ainst the p&ope&t2 of KIC.

The pose& %ust be ans3e&e/ in the ne6ati-e.

In Ca&pio -. Do&oa'< the Cou&t &ule/ that the /eci/in6 cou&t hassupe&-iso&2 cont&ol o-e& the eecution of its u/6%ent1

) case in 3hich an eecution has been issue/ is &e6a&/e/ as stillpen/in6 so that all p&ocee/in6s on the eecution a&e p&ocee/in6s inthe suit. The&e is no 8uestion that the cou&t 3hich &en/e&e/ the

u/6%ent has a 6ene&al supe&-iso&2 cont&ol o-e& its p&ocess ofeecution' an/ this po3e& ca&&ies 3ith it the &i6ht to /ete&%ine e-e&28uestion of fact an/ la3 3hich %a2 be in-ol-e/ in the eecution.

>e &eite&ate/ the abo-e hol/in6 in *a-ie& -. Cou&t of )ppeals# inthis 3ise1 JThe sai/ b&anch has a 6ene&al supe&-iso&2 cont&ol o-e& itsp&ocesses in the eecution of its u/6%ent 3ith a &i6ht to /ete&%inee-e&2 8uestion of fact an/ la3 3hich %a2 be in-ol-e/ in theeecution.J

The cou&ts supe&-iso&2 cont&ol /oes not' ho3e-e&' eten/ as toautho&i4e the alte&ation o& a%en/%ent of a final an/ eecuto&2/ecision' sa-e fo& ce&tain &eco6ni4e/ eceptions' a%on6 3hich is theco&&ection of cle&ical e&&o&s. Else' the cou&t -iolates the p&inciple offinalit2 of u/6%ent an/ its i%%utabilit2' concepts 3hich the Cou&t' inTan -. Ti%bal'$ /efine/1

)s 3e hel/ in In/ust&ial Mana6e%ent Inte&national De-elop%entCo&po&ation -s. N+RC1

It is an ele%enta&2 p&inciple of p&oce/u&e that the &esolution of the

cou&t in a 6i-en issue as e%bo/ie/ in the /ispositi-e pa&t of a/ecision o& o&/e& is the cont&ollin6 facto& as to settle%ent of &i6hts ofthe pa&ties. Once a /ecision o& o&/e& beco%es final an/ eecuto&2' itis &e%o-e/ f&o% the po3e& o& u&is/iction of the cou&t 3hich &en/e&e/it to fu&the& alte& o& a%en/ it. It the&eb2 beco%es i%%utable an/unalte&able an/ an2 a%en/%ent o& alte&ation 3hich substantiall2affects a final an/ eecuto&2 u/6%ent is null an/ -oi/ fo& lac7 of

u&is/iction' inclu/in6 the enti&e p&ocee/in6s hel/ fo& that pu&pose.)n o&/e& of eecution 3hich -a&ies the teno& of the u/6%ent o&ecee/s the te&%s the&eof is a nullit2. AE%phasis supplie/.B

Republic -. Tan6o: epoun/e/ on the sa%e p&inciple an/ itseceptions1

Deepl2 in6&aine/ in ou& u&isp&u/ence is the p&inciple that a /ecisionthat has ac8ui&e/ finalit2 beco%es i%%utable an/ unalte&able. )ssuch' it %a2 no lon6e& be %o/ifie/ in an2 &espect e-en if the%o/ification is %eant to co&&ect e&&oneous conclusions of fact o& la3an/ 3hethe& it 3ill be %a/e b2 the cou&t that &en/e&e/ it o& b2 thehi6hest cou&t of the lan/.

The /oct&ine of finalit2 of u/6%ent is 6&oun/e/ on the fun/a%entalp&inciple of public polic2 an/ soun/ p&actice that' at the &is7 ofoccasional e&&o&' the u/6%ent of cou&ts an/ the a3a&/ of 8uasi=

u/icial a6encies %ust beco%e final on so%e /efinite /ate fie/ b2la3. The onl2 eceptions to the 6ene&al &ule a&e the co&&ection ofcle&ical e&&o&s' the so=calle/ nunc p&o tunc ent&ies 3hich cause nop&eu/ice to an2 pa&t2' -oi/ u/6%ents' an/ 3hene-e& ci&cu%stancest&anspi&e afte& the finalit2 of the /ecision 3hich &en/e& its eecution


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unust an/ ine8uitable. None of the eceptions obtains he&e to %e&itthe &e-ie3 sou6ht. AE%phasis a//e/.B

So' /i/ the RTC' in b&each of the /oct&ine of i%%utabilit2 an/

inalte&abilit2 of u/6%ent' o&/e& the eecution of its final /ecision in a%anne& as 3oul/ a%ount to its p&ohibite/ alte&ation o& %o/ification5

>e &epai& to the /ispositi-e po&tion of the final an/ eecuto&2 RTC/ecision. Pe&tinentl2' it p&o-i/es1

>EREFORE' consistent 3ith Section $' Rule ( of the ""9 Rulesof Ci-il P&oce/u&e' an/ b2 p&epon/e&ance of e-i/ence' u/6%ent ishe&eb2 &en/e&e/ in fa-o& of the plaintiff' o&/e&in6 Ku7an' Inc.1

. to pa2 the su% of ONE MI++ION T>O UNDRED ONETOUS)ND SEVEN UNDRED T>ENT0 FOUR PESOSAP'!;'9!#.;;B 3ith le6al inte&est at ! pe& annu% f&o% Feb&ua&29' """ until full pa2%ent

!. to pa2 the su% of FIFT0 TOUS)ND PESOS AP$;';;;.;;B as%o&al /a%a6es

ENT0 TOUS)ND PESOS AP!;';;;.;;B as&easonable atto&ne2s fees an/

#. to pa2 the su% of SEVEN TOUS)ND NINE UNDRED SIT0PESOS an/ SI CENT)VOS AP9'":;.;:B as liti6ation epenses.

AE%phasis supplie/.B

)s %a2 be note/' the abo-e /ecision' in une8ui-ocal te&%s' /i&ecte/Ku7an' Inc. to pa2 the afo&e%entione/ a3a&/s to Mo&ales. Thus'%a7in6 KIC' th&u the %e/iu% of a 3&it of eecution' ans3e&able fo&the abo-e u/6%ent liabilit2 is a clea& case of alte&in6 a /ecision' aninstance of 6&antin6 &elief not conte%plate/ in the /ecision sou6ht tobe eecute/. )n/ the chan6e /oes not fall un/e& an2 of the&eco6ni4e/ eceptions to the /oct&ine of finalit2 an/ i%%utabilit2 of

u/6%ent. It is a settle/ &ule that a 3&it of eecution %ust confo&% tothe fallo of the u/6%ent as an ine-itable co&olla&2' a 3&it be2on/ thete&%s of the u/6%ent is a nullit2.9

Thus' on this 6&oun/ alone' the instant petition can al&ea/2 be6&ante/. Nonetheless' an ea%ination of the othe& issues &aise/ b2KIC 3oul/ be p&ope&.

Secon/ Issue1 P&op&iet2 of the RTC

)ssu%in6 *u&is/iction o-e& KIC

The net issue tu&ns on the -ali/it2 of the eecution the t&ial cou&tautho&i4e/ a6ainst KIC an/ its p&ope&t2' 6i-en that it 3as neithe&%a/e a pa&t2 no& i%plea/e/ in Ci-il Case No. ""="


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)ffi/a-it of Thi&/=Pa&t2 Clai%( AbB the Co%%ent an/ Opposition toPlaintiffs O%nibus Motion" AcB the Motion fo& Reconsi/e&ation ofthe RTC O&/e& /ate/ Ma&ch !' !;;9!; an/ A/B the Motion fo&+ea-e to )/%it Repl2.! The C)' citin6 Section !;' Rule # of theRules of Cou&t' state/ that Jthe p&oce/u&al &ule on se&-ice ofsu%%ons can be 3ai-e/ b2 -olunta&2 sub%ission to the cou&ts

u&is/iction th&ou6h an2 fo&% of appea&ance b2 the pa&t2 o& itscounsel.J!!

>e cannot 6i-e i%p&i%atu& to the appellate cou&ts app&eciation ofthe th&ust of Sec. !;' Rule # of the Rules in conclu/in6 that the t&ialcou&t ac8ui&e/ u&is/iction o-e& KIC.

O&ion Secu&it2 Co&po&ation -. Kalfa% Ente&p&ises' Inc.!< eplains

ho3 cou&ts ac8ui&e u&is/iction o-e& the pa&ties in a ci-il case1

Cou&ts ac8ui&e u&is/iction o-e& the plaintiffs upon the f ilin6 of theco%plaint. On the othe& han/' u&is/iction o-e& the /efen/ants in aci-il case is ac8ui&e/ eithe& th&ou6h the se&-ice of su%%ons uponthe% o& th&ou6h thei& -olunta&2 appea&ance in cou&t an/ thei&sub%ission to its autho&it2. AE%phasis supplie/.B

In the fai&l2 &ecent Pal%a -. Gal-e4'!# the Cou&t &eite&ate/ its hol/in6

in O&ion Secu&it2 Co&po&ation' statin61 JHIn ci-il cases' the t&ial cou&tac8ui&es u&is/iction o-e& the pe&son of the /efen/ant eithe& b2 these&-ice of su%%ons o& b2 the latte&s -olunta&2 appea&ance an/sub%ission to the autho&it2 of the fo&%e&.J

The cou&ts u&is/iction o-e& a pa&t2=/efen/ant &esultin6 f&o% his-olunta&2 sub%ission to its autho&it2 is p&o-i/e/ un/e& Sec. !;' Rule# of the Rules' 3hich states1

Section !;. Volunta&2 appea&ance. The /efen/ants -olunta&2appea&ance in the actions shall be e8ui-alent to se&-ice of su%%ons.The inclusion in a %otion to /is%iss of othe& 6&oun/s asi/e f&o% lac7of u&is/iction o-e& the pe&son of the /efen/ant shall not be /ee%e/

a -olunta&2 appea&ance.

To be su&e' the C)s &ulin6 that an2 fo&% of appea&ance b2 the pa&t2o& its counsel is /ee%e/ as -olunta&2 appea&ance fin/s suppo&t inthe 7in/&e/ Republic -. Ke& Co.' +t/.!$ an/ De Mi/6el2 -.Fe&an/os.!:

Republic an/ De Mi/6el2' ho3e-e&' ha-e al&ea/2 been %o/ifie/ ifnot alto6ethe& supe&se/e/!9 b2 +a Na-al D&u6 Co&po&ation -. Cou&tof )ppeals'!( 3he&ein the Cou&t essentiall2 &ule/ an/ eluci/ate/ onthe cu&&ent -ie3 in ou& u&is/iction' to 3it1 JH) special appea&ancebefo&e the cou&tchallen6in6 its u&is/iction o-e& the pe&son th&ou6ha %otion to /is%iss e-en if the %o-ant in-o7es othe& 6&oun/sisnot tanta%ount to estoppel o& a 3ai-e& b2 the %o-ant of his obectionto u&is/iction o-e& his pe&son an/ such is not constituti-e of a-olunta&2 sub%ission to the u&is/iction of the cou&t.J!"

In the instant case' KIC 3as not %a/e a pa&t2=/efen/ant in Ci-ilCase No. ""="


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KIC coul/ not file befo&e the RTC a %otion to /is%iss an/ itsattach%ents in Ci-il Case No. ""="Un/e& the /oct&ine of Jpie&cin6 the -eil of co&po&ate fiction'J the cou&tloo7s at the co&po&ation as a %e&e collection of in/i-i/uals o& ana66&e6ation of pe&sons un/e&ta7in6 business as a 6&oup'/is&e6a&/in6 the sepa&ate u&i/ical pe&sonalit2 of the co&po&ation

unif2in6 the 6&oup. )nothe& fo&%ulation of this /oct&ine is that 3hent3o business ente&p&ises a&e o3ne/' con/ucte/ an/ cont&olle/ b2the sa%e pa&ties' both la3 an/ e8uit2 3ill' 3hen necessa&2 to p&otectthe &i6hts of thi&/ pa&ties' /is&e6a&/ the le6al fiction that t3oco&po&ations a&e /istinct entities an/ t&eat the% as i/entical o& as onean/ the sa%e.

>hethe& the sepa&ate pe&sonalit2 of the co&po&ation shoul/ bepie&ce/ hin6es on obtainin6 facts app&op&iatel2 plea/e/ o& p&o-e/.o3e-e&' an2 pie&cin6 of the co&po&ate -eil has to be /one 3ith

caution' albeit the Cou&t 3ill not hesitate to /is&e6a&/ the co&po&ate-eil 3hen it is %isuse/ o& 3hen necessa&2 in the inte&est of ustice. AE%phasis supplie/.B

The sa%e p&inciple 3as the subect an/ /iscusse/ in Ri-e&a -.Unite/ +abo&ato&ies' Inc.1

>hile a co&po&ation %a2 eist fo& an2 la3ful pu&pose' the la3 3ill&e6a&/ it as an association of pe&sons o&' in case of t3o co&po&ations'

%e&6e the% into one' 3hen its co&po&ate le6al entit2 is use/ as acloa7 fo& f&au/ o& ille6alit2. This is the /oct&ine of pie&cin6 the -eil ofco&po&ate fiction. The /oct&ine applies onl2 3hen such co&po&atefiction is use/ to /efeat public con-enience' ustif2 3&on6' p&otectf&au/' o& /efen/ c&i%e' o& 3hen it is %a/e as a shiel/ to confuse thele6iti%ate issues' o& 3he&e a co&po&ation is the %e&e alte& e6o o&business con/uit of a pe&son' o& 3he&e the co&po&ation is soo&6ani4e/ an/ cont&olle/ an/ its affai&s a&e so con/ucte/ as to %a7eit %e&el2 an inst&u%entalit2' a6enc2' con/uit o& a/unct of anothe&co&po&ation.


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To /is&e6a&/ the sepa&ate u&i/ical pe&sonalit2 of a co&po&ation' the3&on6/oin6 %ust be establishe/ clea&l2 an/ con-incin6l2. It cannotbe p&esu%e/.


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/istinct o& in/epen/ent p&ocee/in6. ) %otion in this sense is not3ithin this /iscussion e-en thou6h the &elief /e%an/e/ is/eno%inate/ an Jo&/e&.J

) %otion 6ene&all2 &elates to p&oce/u&e an/ is often &eso&te/ to ino&/e& to co&&ect e&&o&s 3hich ha-e c&ept in alon6 the line of thep&incipal actions p&o6&ess. Gene&all2' 3he&e the&e is a p&oce/u&al/efect in a p&ocee/in6 an/ no %etho/ un/e& statute o& &ule of cou&tb2 3hich it %a2 be calle/ to the attention of the cou&t' a %otion is anapp&op&iate &e%e/2. In %an2 u&is/ictions' the %otion has &eplace/the co%%on=la3 pleas testin6 the sufficienc2 of the plea/in6s' an/-a&ious co%%on=la3 3&its' such as 3&it of e&&o& co&a% nobis an/au/ita 8ue&ela. In so%e cases' a %otion %a2 be one of se-e&al&e%e/ies a-ailable. Fo& ea%ple' in so%e u&is/ictions' a %otion to-acate an o&/e& is a &e%e/2 alte&nati-e to an appeal the&ef&o%.

Statutes 6o-e&nin6 %otions a&e 6i-en a libe&al const&uction.


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co%%itte/ a6ainst anothe&' in /is&e6a&/ of its &i6hts. The 3&on6/oin6%ust be clea&l2 an/ con-incin6l2 establishe/ it cannot be p&esu%e/.Othe&3ise' an inustice that 3as ne-e& uninten/e/ %a2 &esult f&o%an e&&oneous application.

This Cou&t has pie&ce/ the co&po&ate -eil to 3a&/ off a u/6%entc&e/it' to a-oi/ inclusion of co&po&ate assets as pa&t of the estate ofthe /ece/ent' to escape liabilit2 a&isin6 f&o% a /ebt' o& to pe&petuatef&au/ an/o& confuse le6iti%ate issues eithe& to p&o%ote o& to shiel/unfai& obecti-es o& to co-e& up an othe&3ise blatant -iolation of thep&ohibition a6ainst fo&u%=shoppin6. Onl2 in these an/ si%ila&instances %a2 the -eil be pie&ce/ an/ /is&e6a&/e/. AE%phasissupplie/.B

In fine' to ustif2 the pie&cin6 of the -eil of co&po&ate fiction' it %ust besho3n b2 clea& an/ con-incin6 p&oof that the sepa&ate an/ /istinctpe&sonalit2 of the co&po&ation 3as pu&posefull2 e%plo2e/ to e-a/e ale6iti%ate an/ bin/in6 co%%it%ent an/ pe&petuate a f&au/ o& li7e3&on6/oin6s. To be su&e' the Cou&t has' on nu%e&ous occasions'hile it is t&ue that a co&po&ation has a sepa&ate an/ /istinctpe&sonalit2 f&o% its stoc7hol/e&' /i&ecto& an/ office&s' the la3ep&essl2 p&o-i/es fo& an eception. >hen Michael Chan' theMana6in6 Di&ecto& of /efen/ant Ku7an' Inc. A%ao&it2 stoc7hol/e& ofthe ne3l2 fo&%e/ co&po&ation HKICB confi&%e/ the a3a&/ to plaintiffto suppl2 an/ install inte&io& si6na6es in the Ente&p&ise Cente& heAMichael Chan' Mana6in6 Di&ecto& of /efen/ant Ku7an' Inc.B 7ne3that the&e 3as no sufficient co&po&ate fun/s to pa2 itsobli6ationaccount' thus i%pl2in6 ba/ faith on his pa&t an/ f&au/ in

cont&actin6 the obli6ation. Michael Chan neithe& &etu&ne/ the inte&io&si6na6es no& ten/e&e/ pa2%ent to the plaintiff. This ci&cu%stance%a2 3a&&ant the pie&cin6 of the -eil of co&po&ation fiction. a-in6been 6uilt2 of ba/ faith in the %ana6e%ent of co&po&ate %atte&s theco&po&ate t&ustee' /i&ecto& o& office& %a2 be hel/ pe&sonall2 liable.


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Since f&au/ is a state of %in/' it nee/ not be p&o-e/ b2 /i&ecte-i/ence but %a2 be infe&&e/ f&o% the ci&cu%stances of the case. H)n/ the ci&cu%stances a&e1 the si6natu&e of Michael Chan'Mana6in6 Di&ecto& of Ku7an' Inc. appea&in6 in the confi&%ation of thea3a&/ sent to the plaintiff si6natu&e of Chan Kai Kit' a ,&itishNational appea&in6 in the )&ticles of Inco&po&ation an/ si6natu&e of

Michael Chan also a ,&itish National appea&in6 in the )&ticles ofInco&po&ation Hof Ku7an Inte&national Co&p. 6i-e the i%p&ession thatthe2 a&e one an/ the sa%e pe&son' that Michael Chan an/ Chan KaiKit a&e both %ao&it2 stoc7hol/e&s of Ku7an Inte&national Co&p. an/Ku7an' Inc. hol/in6 #; of the stoc7s that Ku7an Inte&national Co&p.is p&acticall2 /oin6 the sa%e 7in/ of business as that of Ku7an'Inc.


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/ef&au/e/ Mo&ales. In fine' the&e is no sho3in6 that theinco&po&ation' an/ the sepa&ate an/ /istinct pe&sonalit2' of KIC 3asuse/ to /efeat Mo&ales &i6ht to &eco-e& f&o% Ku7an' Inc. *u/6in6f&o% the &eco&/s' no se&ious atte%pt 3as %a/e to le-2 on thep&ope&ties of Ku7an' Inc. Mo&ales coul/ not' thus' -ali/l2 a&6ue thatKu7an' Inc. t&ie/ to a-oi/ liabilit2 o& ha/ no p&ope&t2 a6ainst 3hich to

p&ocee/.

Mo&ales fu&the& conten/s that Ku7an' Inc.s closu&e is e-i/ence/ b2its failu&e to file its !;; Gene&al Info&%ation Sheet AGISB 3ith theSecu&ities an/ Echan6e Co%%ission. o3e-e&' such fact /oes notnecessa&il2 %ean that Ku7an' Inc. ha/ alto6ethe& cease/ ope&ations'as Mo&ales 3oul/ ha-e this Cou&t belie-e' fo& it is state/ on the faceof the GIS that it is onl2 upon a failu&e to file the co&po&ate GIS fo&fi-e A$B consecuti-e 2ea&s that non=ope&ation shall be p&esu%e/.

The fact that Ku7an' Inc. ente&e/ into a PhP


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establish that the sepa&ate an/ /istinct pe&sonalities of theco&po&ations a&e set up to ustif2 a 3&on6' p&otect f&au/' o& pe&pet&atea /eception. In the conc&ete an/ on the assu%ption that the RTC has-ali/l2 ac8ui&e/ u&is/iction o-e& the pa&t2 conce&ne/' Mo&ales ou6htto ha-e p&o-e/ b2 con-incin6 e-i/ence that Ku7an' Inc. 3ascollapse/ an/ the&eafte& KIC pu&posel2 fo&%e/ an/ ope&ate/ to

/ef&au/ hi%. Mo&ales has not to us /ischa&6e/ his bu&/en.

>EREFORE' the petition is he&eb2 GR)NTED. The C)s *anua&2!


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&espon/ents inte&pose/ a counte&clai% fo& unpai/ le6al se&-ices b2G&e6o&io Manuel in the a%ount of fift2 thousan/ pesos AP$;';;;B3hich 3as not pai/ b2 the inco&po&ato&s' /i&ecto&s an/ office&s of thepetitione&. The t&ial cou&t /eci/e/ the case on *une !:' "($' in fa-o&of petitione& in &e6a&/ to the petitione&?s clai% fo& %one2' but alsoallo3e/ the counte&=clai% of p&i-ate &espon/ents. ,oth pa&ties

appeale/. On )p&il $' ""' the Cou&t of )ppeals sustaine/ the t&ialcou&t?s /ecision. $ ence' the p&esent petition.

Fo& ou& &e-ie3 in pa&ticula& is the p&op&iet2 of the pe&%issi-ecounte&clai% 3hich p&i-ate &espon/ents file/ to6ethe& 3ith thei&ans3e& to petitione&?s co%plaint fo& a su% of %one2. P&i-ate&espon/ent G&e6o&io Manuel alle6e/ as an affi&%ati-e /efense that'3hile he 3as petitione&?s )ssistant +e6al Office&' he &ep&esente/%e%be&s of the F&ancisco fa%il2 in the intestate estate p&ocee/in6sof the late ,enita T&ini/a/. o3e-e&' e-en afte& the te&%ination of the

p&ocee/in6s' his se&-ices 3e&e not pai/. Sai/ fa%il2 %e%be&s' hesai/' 3e&e also inco&po&ato&s' /i&ecto&s an/ office&s of petitione&.ence to petitione&?s collection suit' he file/ a counte& pe&%issi-ecounte&clai% fo& the unpai/ atto&ne2?s fees. :

Fo& failu&e of petitione& to ans3e& the counte&clai%' the t&ial cou&t/ecla&e/ petitione& in /efault on this sco&e' an/ e-i/ence e=pa&te3as p&esente/ on the counte&clai%. The t&ial cou&t &ule/ in fa-o& ofp&i-ate &espon/ents an/ foun/ that G&e6o&io Manuel in/ee/&en/e&e/ le6al se&-ices to the F&ancisco fa%il2 in SpecialP&ocee/in6s Nu%be& 9(;< L JIn the Matte& of Intestate Estate of,enita T&ini/a/J. Sai/ cou&t also foun/ that his le6al se&-ices 3e&enot co%pensate/ /espite &epeate/ /e%an/s' an/ thus o&/e&e/petitione& to pa2 hi% the a%ount of fift2 thousan/ AP$;';;;.;;Bpesos. 9

Dissatisfie/ 3ith the t&ial cou&t?s o&/e&' petitione& ele-ate/ the %atte&to the Cou&t of )ppeals' posin6 the follo3in6 issues1

I.

>ETER OR NOT TE DECISION RENDERED ,0 TE +O>ERCOURT IS NU++ )ND VOID )S IT NEVER )C@UIRED*URISDICTION OVER TE PERSON OF TE DEFEND)NT.

II.

>ETER OR NOT P+)INTIFF=)PPE++)NT NOT ,EING ) RE)+P)RT0 IN TE )++EGED PERMISSIVE COUNTERC+)IMSOU+D ,E E+D +I),+E TO TE C+)IM OF DEFEND)NT=

)PPE++EES.

III.

>ETER OR NOT TERE IS F)I+URE ON TE P)RT OFP+)INTIFF=)PPE++)NT TO )NS>ER TE )++EGEDPERMISSIVE COUNTERC+)IM. (

Petitione& conten/e/ that the t&ial cou&t /i/ not ac8ui&e u&is/ictiono-e& it because no su%%ons 3as -ali/l2 se&-e/ on it to6ethe& 3iththe cop2 of the ans3e& containin6 the pe&%issi-e counte&clai%.Fu&the&' petitione& 8uestions the p&op&iet2 of its bein6 %a/e pa&t2 tothe case because it 3as not the &eal pa&t2 in inte&est but thein/i-i/ual %e%be&s of the F&ancisco fa%il2 conce&ne/ 3ith theintestate case.


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In its assaile/ /ecision no3 befo&e us fo& &e-ie3' &espon/ent Cou&t of)ppeals hel/ that a counte&clai% %ust be ans3e&e/ in ten A;B /a2s'pu&suant to Section #' Rule ' of the Rules of Cou&t an/ no3he&e/oes it state in the Rules that a pa&t2 still nee/e/ to be su%%one/ane3 if a counte&clai% 3as set up a6ainst hi%. Failu&e to se&-esu%%ons' sai/ &espon/ent cou&t' /i/ not effecti-el2 ne6ate t&ial

cou&t?s u&is/iction o-e& petitione& in the %atte& of the counte&clai%. Itli7e3ise pointe/ out that the&e 3as no &eason fo& petitione& to beecuse/ f&o% ans3e&in6 the counte&clai%. Cou&t &eco&/s sho3e/that its fo&%e& counsel' Nicano& G. )l-a&e4' &ecei-e/ the cop2 of theans3e& 3ith counte&clai% t3o A!B /a2s p&io& to his 3ith/&a3al ascounsel fo& petitione&. Mo&eo-e& 3hen petitione&?s ne3 counsel' *oseN. )8uino' ente&e/ his appea&ance' th&ee A


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TE COURT OF )PPE)+S ERRED IN )FFIRMING T)T TERE>)S *URISDICTION OVER PETITIONER >IT RESPECT TOTE COUNTERC+)IM. ith &e6a&/ to the pe&%issi-e counte&clai%' petitione& also insiststhat the&e 3as no p&ope& se&-ice of the ans3e& containin6 thepe&%issi-e counte&clai%. It clai%s that the counte&clai% is a sepa&atecase 3hich can onl2 be p&ope&l2 se&-e/ upon the opposin6 pa&t2th&ou6h su%%ons. Fu&the& petitione& states that b2 natu&e' ape&%issi-e counte&clai% is one 3hich /oes not a&ise out of no& isnecessa&il2 connecte/ 3ith the subect of the opposin6 pa&t2?s clai%.Petitione& a-e&s that since the&e 3as no se&-ice of su%%ons upon it3ith &e6a&/ to the counte&clai%' then the cou&t /i/ not ac8ui&e

u&is/iction o-e& petitione&. Since a counte&clai% is consi/e&e/ anaction in/epen/ent f&o% the ans3e&' acco&/in6 to petitione&' then ineffect the&e shoul/ be t3o si%ultaneous actions bet3een the sa%epa&ties1 each pa&t2 is at the sa%e ti%e both plaintiff an/ /efen/ant3ith &espect to the othe&' $ &e8ui&in6 in each case sepa&atesu%%onses.

In thei& Co%%ent' p&i-ate &espon/ents focus on the t3o 8uestions&aise/ b2 petitione&. The2 /efen/ the p&op&iet2 of pie&cin6 the -eil ofco&po&ate fiction' but /en2 the necessit2 of se&-in6 sepa&atesu%%onses on petitione& in &e6a&/ to thei& pe&%issi-e counte&clai%containe/ in the ans3e&.

P&i-ate &espon/ents %aintain both t&ial an/ appellate cou&ts foun/that &espon/ent G&e6o&io Manuel 3as e%plo2e/ as assistant le6aloffice& of petitione& co&po&ation' an/ that his se&-ices 3e&e solicite/b2 the inco&po&ato&s' /i&ecto&s an/ %e%be&s to han/le an/ &ep&esentthe% in Special P&ocee/in6s No. 9(;


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he ha/ 3ith/&a3n his appea&ance as counsel fo& the petitione&'p&i-ate &espon/ents asse&t that this contention is utte&l2 baseless.Reco&/s /isclose that the ans3e& 3as &ecei-e/ t3o A!B /a2s befo&ethe fo&%e& counsel fo& petitione& 3ith/&e3 his appea&ance' acco&/in6to p&i-ate &espon/ents. The2 %aintain that the p&esent petition is buta fo&% of /ilato&2 appeal' to set off petitione&?s obli6ations to the

&espon/ents b2 &unnin6 up %o&e inte&est it coul/ &eco-e& f&o% the%.P&i-ate &espon/ents the&efo&e clai% /a%a6es a6ainst petitione&. 9

To &esol-e the issues in this case' 3e %ust fi&st /ete&%ine thep&op&iet2 of pie&cin6 the -eil of co&po&ate fiction.

,asic in co&po&ation la3 is the p&inciple that a co&po&ation has asepa&ate pe&sonalit2 /istinct f&o% its stoc7hol/e&s an/ f&o% othe&co&po&ations to 3hich it %a2 be connecte/. ( o3e-e&' un/e& the/oct&ine of pie&cin6 the -eil of co&po&ate entit2' the co&po&ation?ssepa&ate u&i/ical pe&sonalit2 %a2 be /is&e6a&/e/' fo& ea%ple' 3henthe co&po&ate i/entit2 is use/ to /efeat public con-enience' ustif23&on6' p&otect f&au/' o& /efen/ c&i%e. )lso' 3he&e the co&po&ation isa %e&e alte& e6o o& business con/uit of a pe&son' o& 3he&e theco&po&ation is so o&6ani4e/ an/ cont&olle/ an/ its affai&s a&e socon/ucte/ as to %a7e it %e&el2 an inst&u%entalit2' a6enc2' con/uito& a/unct of anothe& co&po&ation' then its /istinct pe&sonalit2 %a2 bei6no&e/. " In these ci&cu%stances' the cou&ts 3ill t&eat theco&po&ation as a %e&e a66&upation of pe&sons an/ the liabilit2 3ill/i&ectl2 attach to the%. The le6al fiction of a sepa&ate co&po&atepe&sonalit2 in those cite/ instances' fo& &easons of public polic2 an/in the inte&est of ustice' 3ill be ustifiabl2 set asi/e.

In ou& -ie3' ho3e-e&' 6i-en the facts an/ ci&cu%stances of this case'the /oct&ine of pie&cin6 the co&po&ate -eil has no &ele-ant applicationhe&e. Respon/ent cou&t e&&e/ in pe&%ittin6 the t&ial cou&t?s &eso&t tothis /oct&ine. The &ationale behin/ pie&cin6 a co&po&ation?s i/entit2 ina 6i-en case is to &e%o-e the ba&&ie& bet3een the co&po&ation f&o%the pe&sons co%p&isin6 it to th3a&t the f&au/ulent an/ ille6al

sche%es of those 3ho use the co&po&ate pe&sonalit2 as a shiel/ fo&un/e&ta7in6 ce&tain p&osc&ibe/ acti-ities. o3e-e&' in the case at ba&'instea/ of hol/in6 ce&tain in/i-i/uals o& pe&sons &esponsible fo& analle6e/ co&po&ate act' the situation has been &e-e&se/. It is thepetitione& as a co&po&ation 3hich is bein6 o&/e&e/ to ans3e& fo& thepe&sonal liabilit2 of ce&tain in/i-i/ual /i&ecto&s' office&s an/

inco&po&ato&s conce&ne/. ence' it appea&s to us that the /oct&inehas been tu&ne/ upsi/e /o3n because of its e&&oneous in-ocation.Note that acco&/in6 to p&i-ate &espon/ent G&e6o&io Manuel hisse&-ices 3e&e solicite/ as counsel fo& %e%be&s of the F&anciscofa%il2 to &ep&esent the% in the intestate p&ocee/in6s o-e& ,enitaT&ini/a/?s estate. These estate p&ocee/in6s /i/ not in-ol-e an2business of petitione&.

Note also that he sou6ht to collect le6al fees not ust f&o% ce&tainF&ancisco fa%il2 %e%be&s but also f&o% petitione& co&po&ation on the

clai%s that its %ana6e%ent ha/ &e8ueste/ his se&-ices an/ heacce/e/ the&eto as an e%plo2ee of petitione& f&o% 3ho% it coul/ be/e/uce/ he 3as also &ecei-in6 a sala&2. is %o-e to &eco-e& unpai/le6al fees th&ou6h a counte&clai% a6ainst F&ancisco Moto&sCo&po&ation' to offset the unpai/ balance of the pu&chase an/ &epai&of a eep bo/2 coul/ onl2 &esult f&o% an ob-ious %isapp&ehensionthat petitione&?s co&po&ate assets coul/ be use/ to ans3e& fo& theliabilities of its in/i-i/ual /i&ecto&s' office&s' an/ inco&po&ato&s. Such&esult if pe&%itte/ coul/ easil2 p&eu/ice the co&po&ation' its o3nc&e/ito&s' an/ e-en othe& stoc7hol/e&s hence' clea&l2 ine8uitous topetitione&.

Fu&the&%o&e' consi/e&in6 the natu&e of the le6al se&-ices in-ol-e/'3hate-e& obli6ation sai/ inco&po&ato&s' /i&ecto&s an/ office&s of theco&po&ation ha/ incu&&e/' it 3as incu&&e/ in thei& pe&sonal capacit2.>hen /i&ecto&s an/ office&s of a co&po&ation a&e unable toco%pensate a pa&t2 fo& a pe&sonal obli6ation' it is fa&=fetche/ toalle6e that the co&po&ation is pe&petuatin6 f&au/ o& p&o%otin6inustice' an/ be the&eb2 hel/ liable the&efo& b2 pie&cin6 its co&po&ate-eil. >hile the&e a&e no ha&/ an/ fast &ules on /is&e6a&/in6 sepa&ateco&po&ate i/entit2' 3e %ust al3a2s be %in/ful of its function an/


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pu&pose. ) cou&t shoul/ be ca&eful in assessin6 the %ilieu 3he&e the/oct&ine of pie&cin6 the co&po&ate -eil %a2 be applie/. Othe&3ise aninustice' althou6h uninten/e/' %a2 &esult f&o% its e&&oneousapplication.

The pe&sonalit2 of the co&po&ation an/ those of its inco&po&ato&s'/i&ecto&s an/ office&s in thei& pe&sonal capacities ou6ht to be 7eptsepa&ate in this case. The clai% fo& le6al fees a6ainst the conce&ne/in/i-i/ual inco&po&ato&s' office&s an/ /i&ecto&s coul/ not be p&ope&l2/i&ecte/ a6ainst the co&po&ation 3ithout -iolatin6 basic p&inciples6o-e&nin6 co&po&ations. Mo&eo-e&' e-e&2 action L inclu/in6 acounte&clai% L %ust be p&osecute/ o& /efen/e/ in the na%e of the&eal pa&t2 in inte&est. !; It is plainl2 an e&&o& to la2 the clai% fo& le6alfees of p&i-ate &espon/ent G&e6o&io Manuel at the /oo& of petitione&AFMCB &athe& than in/i-i/ual %e%be&s of the F&ancisco fa%il2.

o3e-e&' 3ith &e6a&/ to the p&oce/u&al issue &aise/ b2 petitione&?salle6ation' that it nee/e/ to be su%%one/ ane3 in o&/e& fo& the cou&tto ac8ui&e u&is/iction o-e& it' 3e a6&ee 3ith &espon/ent cou&t?s -ie3to the cont&a&2. Section #' Rule of the Rules of Cou&t p&o-i/es thata counte&clai% o& c&oss=clai% %ust be ans3e&e/ 3ithin ten A;B /a2sf&o% se&-ice. Nothin6 in the Rules of Cou&t sa2s that su%%onsshoul/ fi&st be se&-e/ on the /efen/ant befo&e an ans3e& tocounte&clai% %ust be %a/e. The pu&pose of a su%%ons is to enablethe cou&t to ac8ui&e u&is/iction o-e& the pe&son of the /efen/ant.

)lthou6h a counte&clai% is t&eate/ as an enti&el2 /istinct an/in/epen/ent action' the /efen/ant in the counte&clai%' bein6 the

plaintiff in the o&i6inal co%plaint' has al&ea/2 sub%itte/ to theu&is/iction of the cou&t. Follo3in6 Rule "' Section < of the ""9Rules of Ci-il P&oce/u&e' ! if a /efen/ant Ahe&ein petitione&B fails toans3e& the counte&clai%' then upon %otion of plaintiff' the /efen/ant%a2 be /ecla&e/ in /efault. This is 3hat happene/ to petitione& inthis case' an/ this Cou&t fin/s no p&oce/u&al e&&o& in the /ispositionof the appellate cou&t on this pa&ticula& issue. Mo&eo-e&' as note/ b2the &espon/ent cou&t' 3hen petitione& file/ its %otion see7in6 to setasi/e the o&/e& of /efault' in effect it sub%itte/ itself to the

u&is/iction of the cou&t. )s 3ell sai/ b2 &espon/ent cou&t1

Fu&the& on the lac7 of u&is/iction as &aise/ b2 plaintiff=appellantH'Hthe &eco&/s sho3 that upon its &e8uest' plaintiff=appellant 3as6&ante/ ti%e to file a %otion fo& &econsi/e&ation of the /ispute//ecision. Plaintiff=appellant /i/ file its %otion fo& &econsi/e&ation to

set asi/e the o&/e& of /efault an/ the u/6%ent &en/e&e/ on thecounte&clai%.

Thus' e-en if the cou&t ac8ui&e/ no u&is/iction o-e& plaintiff=appellanton the counte&clai%' as it -i6o&ousl2 insists' plaintiff=appellant isconsi/e&e/ to ha-e sub%itte/ to the cou&t?s u&is/iction 3hen it file/the %otion fo& &econsi/e&ation see7in6 &elief f&o% the cou&t. ASo&iano-s. Palacio' ! SCR) ##9B. ) pa&t2 is estoppe/ f&o% assailin6 the

u&is/iction of a cou&t afte& -olunta&il2 sub%ittin6 hi%self to itsu&is/iction. ATeones -s. Gi&onella' $" SCR) ;;B. Estoppel is a ba&a6ainst an2 clai%s of lac7 of u&is/iction. A,alais -s. ,alais' $"SCR) EREFORE' the petition is he&eb2 GR)NTED an/ the assaile//ecision is he&eb2 REVERSED insofa& onl2 as it hel/ F&anciscoMoto&s Co&po&ation liable fo& the le6al obli6ation o3in6 to p&i-ate&espon/ent G&e6o&io Manuel but this /ecision is 3ithout p&eu/ice tohis filin6 the p&ope& suit a6ainst the conce&ne/ %e%be&s of theF&ancisco fa%il2 in thei& pe&sonal capacit2. No p&onounce%ent as tocosts.3phi.nt

SO ORDERED.


SUPREME COURT


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Manila

FIRST DIVISION

G.R. No. #""# *anua&2 9' !;;$

FI+IPIN)S ,RO)DC)STING NET>ORK' INC.' petitione&'

-s.

)GO MEDIC)+ )ND EDUC)TION)+ CENTER=,ICO+ CRISTI)NCO++EGE OF MEDICINE' A)MEC=,CCMB an/ )NGE+IT) F. )GO'&espon/ents.

D E C I S I O N

C)RPIO' *.1

The Case

This petition fo& &e-ie3 assails the # *anua&2 """ Decision! an/!: *anua&2 !;;; Resolution of the Cou&t of )ppeals in C)=G.R. CVNo. #;$. The Cou&t of )ppeals affi&%e/ 3ith %o/ification the #Dece%be& ""! Decision< of the Re6ional T&ial Cou&t of +e6a4piCit2' ,&anch ;' in Ci-il Case No. (!


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Secon/1 Ea&lie& )MEC stu/ents in Ph2sical The&ap2 ha/ co%plaine/that the cou&se is not &eco6ni4e/ b2 DECS.

Thi&/1 Stu/ents a&e &e8ui&e/ to ta7e an/ pa2 fo& the subect e-en ifthe subect /oes not ha-e an inst&ucto& = such 6&ee/ fo& %one2 onthe pa&t of )MECs a/%inist&ation. Ta7e the subect )nato%21stu/ents 3oul/ pa2 fo& the subect upon en&ol%ent because it isoffe&e/ b2 the school. o3e-e& the&e 3oul/ be no inst&ucto& fo& suchsubect. Stu/ents 3oul/ be info&%e/ that cou&se 3oul/ be %o-e/ toa late& /ate because the school is still sea&chin6 fo& the app&op&iateinst&ucto&.

It is a public 7no3le/6e that the )6o Me/ical an/ E/ucational Cente&has su&-i-e/ an/ has been su&-i-in6 fo& the past fe3 2ea&s since itsinception because of fun/s suppo&t f&o% fo&ei6n foun/ations. If 2ou3ill ta7e a loo7 at the )MEC p&e%ises 2oull fin/ out that the na%esof the buil/in6s the&e a&e fo&ei6n soun/in6s. The&e is a McDonal/all. >h2 not *ose Ri4al o& ,onifacio all5 That is a -e&2 conc&etean/ un/eniable e-i/ence that the suppo&t of fo&ei6n foun/ations fo&

)MEC is substantial' isnt it5 >ith the &epo&t 3hich is the basis of theepose in DQRC to/a2' it 3oul/ be -e&2 eas2 fo& /et&acto&s an/ene%ies of the )6o fa%il2 to stop the flo3 of suppo&t of fo&ei6nfoun/ations 3ho assist the %e/ical school on the basis of the latte&spu&pose. ,ut if the pu&pose of the institution A)MECB is to /ecei-estu/ents at c&oss pu&pose 3ith its &eason fo& bein6 it is possible fo&these fo&ei6n foun/ations to lift o& suspen/ thei& /onationste%po&a&il2.(

On the othe& han/' the a/%inist&ato&s of )MEC=,CCM' )MECScience i6h School an/ the )MEC=Institute of Mass

Co%%unication in thei& effo&t to %ini%i4e epenses in te&%s of sala&2a&e abso&bin6 o& continues to accept J&eectsJ. Fo& ea%ple ho3%an2 teache&s in )MEC a&e fo&%e& teache&s of )8uinas Uni-e&sit2but 3e&e &e%o-e/ because of i%%o&alit25 Does it %ean that thep&esent a/%inist&ation of )MEC ha-e the total /efinite %o&alfoun/ation f&o% catholic a/%inist&ato& of )8uinas Uni-e&sit2. I 3illp&o-e to 2ou %2 f&ien/s' that )MEC is a /u%pin6 6&oun/' 6a&ba6e'not %e&el2 of %o&al an/ ph2sical %isfits. P&obabl2 the2 onl2 8ualif2 inte&%s of intellect. The Dean of Stu/ent )ffai&s of )MEC is *ustita+ola' as the fa%il2 na%e i%plies. She is too ol/ to 3o&7' bein6 an ol/3o%an. Is the )MEC a/%inist&ation eploitin6 the -e&2 Hente&p&isin6o& co%p&o%isin6 an/ un/e%an/in6 +ola5 Coul/ it be that )MEC is

ust patientl2 %a7in6 use of Dean *ustita +ola 3e&e if she is -e&2 ol/.)s in at%osphe&ic situation 4e&o -isibilit2 the plane cannot lan/'%eanin6 she is -e&2 ol/' lo3 pa2 follo3s. ,2 the 3a2' Dean *ustita+ola is also the chai&%an of the co%%ittee on schola&ship in )MEC.She ha/ &eti&e/ f&o% ,icol Uni-e&sit2 a lon6 ti%e a6o but )MEC haspatientl2 %a/e use of he&.

ME+ RIM)1

M2 f&ien/s base/ on the epose' )MEC is a /u%pin6 6&oun/ fo&%o&al an/ ph2sicall2 %isfit people. >hat /oes this %ean5 I%%o&alan/ ph2sicall2 %isfits as teache&s.


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>EREFORE' p&e%ises consi/e&e/' this cou&t fin/s fo& the plaintiff.Consi/e&in6 the /e6&ee of /a%a6es cause/ b2 the cont&o-e&sialutte&ances' 3hich a&e not foun/ b2 this cou&t to be &eall2 -e&2 se&iousan/ /a%a6in6' an/ the&e bein6 no sho3in6 that in/ee/ the

en&oll%ent of plaintiff school /&oppe/' /efen/ants e&%o6enes J*unJ)le6&e' *&. an/ Filipinas ,&oa/castin6 Net3o&7 Ao3ne& of the &a/iostation DQRCB' a&e he&eb2 ointl2 an/ se-e&all2 o&/e&e/ to pa2plaintiff )6o Me/ical an/ E/ucational Cente&=,icol Ch&istian Colle6eof Me/icine A)MEC=,CCMB the a%ount of P


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The Cou&t of )ppeals hel/ that F,NI faile/ to ee&cise /ue /ili6encein the selection an/ supe&-ision of its e%plo2ees fo& allo3in6 Ri%aan/ )le6&e to %a7e the &a/io b&oa/casts 3ithout the p&ope& K,Pacc&e/itation. The Cou&t of )ppeals /enie/ )6os clai% fo& /a%a6es

an/ atto&ne2s fees because the libelous &e%a&7s 3e&e /i&ecte/a6ainst )MEC' an/ not a6ainst he&. The Cou&t of )ppeals a/u/6e/F,NI' Ri%a an/ )le6&e soli/a&il2 liable to pa2 )MEC %o&al/a%a6es' atto&ne2s fees an/ costs of suit.a3phi.nt

Issues

F,NI &aises the follo3in6 issues fo& &esolution1

I. >ETER TE ,RO)DC)STS )RE +I,E+OUS

II. >ETER )MEC IS ENTIT+ED TO MOR)+ D)M)GES

III. >ETER TE )>)RD OF )TTORNE0S FEES IS PROPERan/

IV. >ETER F,NI IS SO+ID)RI+0 +I),+E >IT RIM) )ND)+EGRE FOR P)0MENT OF MOR)+ D)M)GES' )TTORNE0SFEES )ND COSTS OF SUIT.

The Cou&ts Rulin6

>e /en2 the petition.

This is a ci-il action fo& /a%a6es as a &esult of the alle6e/l2/efa%ato&2 &e%a&7s of Ri%a an/ )le6&e a6ainst )MEC.9 >hile)MEC /i/ not point out clea&l2 the le6al basis fo& its co%plaint' a&ea/in6 of the co%plaint &e-eals that )MECs cause of action isbase/ on )&ticles


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)MEC stu/ents 3ho 6&a/uate J3ill be liabilities &athe& than assetsJ ofthe societ2 a&e libelous pe& se. Ta7en as a 3hole' the b&oa/castssu66est that )MEC is a %one2=%a7in6 institution 3he&e ph2sicall2an/ %o&all2 unfit teache&s aboun/.

o3e-e&' F,NI conten/s that the b&oa/casts a&e not %alicious. F,NIclai%s that Ri%a an/ )le6&e 3e&e plainl2 i%pelle/ b2 thei& ci-ic /ut2to ai& the stu/ents 6&ipes. F,NI alle6es that the&e is no e-i/ence thatill 3ill o& spite %oti-ate/ Ri%a an/ )le6&e in %a7in6 the b&oa/casts.F,NI fu&the& points out that Ri%a an/ )le6&e ee&te/ effo&ts to obtain

)MECs si/e an/ 6a-e )6o the oppo&tunit2 to /efen/ )MEC an/ itsa/%inist&ato&s. F,NI conclu/es that since the&e is no %alice' the&e isno libel.

F,NIs contentions a&e untenable.

E-e&2 /efa%ato&2 i%putation is p&esu%e/ %alicious.!$ Ri%a an/)le6&e faile/ to sho3 a/e8uatel2 thei& 6oo/ intention an/ ustifiable%oti-e in ai&in6 the suppose/ 6&ipes of the stu/ents. )s hosts of a/ocu%enta&2 o& public affai&s p&o6&a%' Ri%a an/ )le6&e shoul/ ha-ep&esente/ the public issues Jf&ee f&o% inaccu&ate an/ %islea/in6info&%ation.J!: ea&in6 the stu/ents alle6e/ co%plaints a %onthbefo&e the epos'!9 the2 ha/ sufficient ti%e to -e&if2 thei& sou&cesan/ info&%ation. o3e-e&' Ri%a an/ )le6&e ha&/l2 %a/e a tho&ou6hin-esti6ation of the stu/ents alle6e/ 6&ipes. Neithe& /i/ the2 in8ui&e

about no& confi&% the pu&po&te/ i&&e6ula&ities in )MEC f&o% theDepa&t%ent of E/ucation' Cultu&e an/ Spo&ts. )le6&e testifie/ that he%e&el2 3ent to )MEC to -e&if2 his &epo&t f&o% an alle6e/ )MECofficial 3ho &efuse/ to /isclose an2 info&%ation. )le6&e si%pl2 &elie/on the 3o&/s of the stu/ents Jbecause the2 3e&e %an2 an/ notbecause the&e is p&oof that 3hat the2 a&e sa2in6 is t&ue.J!( Thisplainl2 sho3s Ri%a an/ )le6&es &ec7less /is&e6a&/ of 3hethe& thei&&epo&t 3as t&ue o& not.

Cont&a&2 to F,NIs clai%' the b&oa/casts 3e&e not Jthe &esult ofst&ai6ht &epo&tin6.J Si6nificantl2' so%e cou&ts in the Unite/ Statesappl2 the p&i-ile6e of Jneut&al &epo&ta6eJ in libel cases in-ol-in6%atte&s of public inte&est o& public fi6u&es. Un/e& this p&i-ile6e' a&epublishe& 3ho accu&atel2 an/ /isinte&este/l2 &epo&ts ce&tain/efa%ato&2 state%ents %a/e a6ainst public fi6u&es is shiel/e/ f&o%

liabilit2' &e6a&/less of the &epublishe&s subecti-e a3a&eness of thet&uth o& falsit2 of the accusation.!" Ri%a an/ )le6&e cannot in-o7ethe p&i-ile6e of neut&al &epo&ta6e because unfoun/e/ co%%entsaboun/ in the b&oa/casts. Mo&eo-e&' the&e is no eistin6 cont&o-e&s2in-ol-in6 )MEC 3hen the b&oa/casts 3e&e %a/e. The p&i-ile6e ofneut&al &epo&ta6e applies 3he&e the /efa%e/ pe&son is a publicfi6u&e 3ho is in-ol-e/ in an eistin6 cont&o-e&s2' an/ a pa&t2 to thatcont&o-e&s2 %a7es the /efa%ato&2 state%ent.


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eithe& be a false alle6ation of fact o& a co%%ent base/ on a falsesupposition. If the co%%ent is an ep&ession of opinion' base/ onestablishe/ facts' then it is i%%ate&ial that the opinion happens to be%ista7en' as lon6 as it %i6ht &easonabl2 be infe&&e/ f&o% the facts.

T&ue' )MEC is a p&i-ate lea&nin6 institution 3hose business ofe/ucatin6 stu/ents is J6enuinel2 i%bue/ 3ith public inte&est.J The3elfa&e of the 2outh in 6ene&al an/ )MECs stu/ents in pa&ticula& is a%atte& 3hich the public has the &i6ht to 7no3. Thus' si%ila& to thene3spape& a&ticles in ,o&al' the subect b&oa/casts /ealt 3ith%atte&s of public inte&est. o3e-e&' unli7e in ,o&al' the 8uestione/b&oa/casts a&e not base/ on establishe/ facts. The &eco&/ suppo&tsthe follo3in6 fin/in6s of the t&ial cou&t1

)lthou6h /efen/ants clai% that the2 3e&e %oti-ate/ b2consistent &epo&ts of stu/ents an/ pa&ents a6ainst plaintiff' 2et'/efen/ants ha-e not p&esente/ in cou&t' no& e-en 6a-e na%e of asin6le stu/ent 3ho %a/e the co%plaint to the%' %uch less p&esent3&itten co%plaint o& petition to that effect. To accept this /efense of/efen/ants is too /an6e&ous because it coul/ easil2 6i-e license tothe %e/ia to %ali6n people an/ establish%ents base/ on fli%s2ecuses that the&e 3e&e &epo&ts to the% althou6h the2 coul/ notsatisfacto&il2 establish it. Such lait2 3oul/ encou&a6e ca&eless an/i&&esponsible b&oa/castin6 3hich is ini%ical to public inte&ests.

Secon/l2' the&e is &eason to belie-e that /efen/ant &a/iob&oa/caste&s' cont&a&2 to the %an/ates of thei& /uties' /i/ not -e&if2an/ anal24e the t&uth of the &epo&ts befo&e the2 ai&e/ it' in o&/e& top&o-e that the2 a&e in 6oo/ faith.

)le6&e conten/e/ that plaintiff school ha/ no pe&%it an/ is notacc&e/ite/ to offe& Ph2sical The&ap2 cou&ses. 0et' plaintiff p&o/uce/

a ce&tificate co%in6 f&o% DECS that as of Sept. !!' "(9 o& %o&ethan ! 2ea&s befo&e the cont&o-e&sial b&oa/cast' acc&e/itation to offe&Ph2sical The&ap2 cou&se ha/ al&ea/2 been 6i-en the plaintiff' 3hichce&tificate is si6ne/ b2 no less than the Sec&eta&2 of E/ucation an/Cultu&e he&self' +ou&/es R. @uisu%bin6 AEh. C=&ebuttalB.Defen/ants coul/ ha-e easil2 7no3n this 3e&e the2 ca&eful enou6h

to -e&if2. )n/ 2et' /efen/ants 3e&e -e&2 cate6o&ical an/ soun/e/ toopositi-e 3hen the2 %a/e the e&&oneous &epo&t that plaintiff ha/ nope&%it to offe& Ph2sical The&ap2 cou&ses 3hich the2 3e&e offe&in6.

The alle6ation that plaintiff 3as 6ettin6 t&e%en/ous ai/s f&o% fo&ei6nfoun/ations li7e Mc/onal/ Foun/ation p&o-e not to be t&ue also. Thet&uth is the&e is no Mc/onal/ Foun/ation eistin6. )lthou6h a bi6buil/in6 of plaintiff school 3as 6i-en the na%e Mc/onal/ buil/in6'that 3as onl2 in o&/e& to hono& the fi&st %issiona&2 in ,icol ofplaintiffs &eli6ion' as eplaine/ b2 D&. +ita )6o. Cont&a&2 to the clai%

of /efen/ants o-e& the ai&' not a sin6le centa-o appea&s to be&ecei-e/ b2 plaintiff school f&o% the afo&e%entione/ McDonal/Foun/ation 3hich /oes not eist.

Defen/ants /i/ not e-en also bothe& to p&o-e thei& clai%' thou6h/enie/ b2 D&a. )6o' that 3hen %e/ical stu/ents fail in one subect'the2 a&e %a/e to &epeat all the othe& subectHs' e-en those the2ha-e al&ea/2 passe/' no& thei& clai% that the school cha&6eslabo&ato&2 fees e-en if the&e a&e no labo&ato&ies in the school. Noe-i/ence 3as p&esente/ to p&o-e the bases fo& these clai%s' at leastin o&/e& to 6i-e se%blance of 6oo/ faith.

)s fo& the alle6ation that plaintiff is the /u%pin6 6&oun/ fo& %isfits'an/ i%%o&al teache&s' /efen/antHs sin6le/ out Dean *ustita +ola3ho is sai/ to be so ol/' 3ith 4e&o -isibilit2 al&ea/2. Dean +olatestifie/ in cou&t last *an. !' ""' an/ 3as foun/ to be 9$ 2ea&sol/. E-en ol/e& people p&o-e to be effecti-e teache&s li7eSup&e%e Cou&t *ustices 3ho a&e still -e&2 %uch in /e%an/ as la3p&ofesso&s in thei& late 2ea&s. Counsel fo& /efen/ants is past 9$ but


56/63

is foun/ b2 this cou&t to be still -e&2 sha&p an/ effecti-e.lW--phi.netSo is plaintiffs counsel.

D&. +ola 3as obse&-e/ b2 this cou&t not to be ph2sicall2 /ec&epit 2et'

no& %entall2 infi&%e/' but is still ale&t an/ /ocile.

The contention that plaintiffs 6&a/uates beco%e liabilities &athe& thanassets of ou& societ2 is a %e&e conclusion. ,ein6 f&o% the placehi%self' this cou&t is a3a&e that %ao&it2 of the %e/ical 6&a/uates ofplaintiffs pass the boa&/ ea%ination easil2 an/ beco%e p&ospe&ousan/ &esponsible p&ofessionals.


57/63

/ete&%inin6 3hethe& a pe&son 3ho 3illfull2 causes loss o& inu&2 toanothe& has acte/ in a %anne& cont&a&2 to %o&als o& 6oo/ custo%sun/e& )&ticle !hethe& )MEC is entitle/ to %o&al /a%a6es

F,NI conten/s that )MEC is not entitle/ to %o&al /a%a6es becauseit is a co&po&ation.


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HIt is an accepte/ /oct&ine that the a3a&/ the&eof as an ite% of/a%a6es is the eception &athe& than the &ule' an/ counsels feesa&e not to be a3a&/e/ e-e&2 ti%e a pa&t2 3ins a suit. The po3e& ofthe cou&t to a3a&/ atto&ne2s fees un/e& )&ticle !!;( of the Ci-il

Co/e /e%an/s factual' le6al an/ e8uitable ustification' 3ithout3hich the a3a&/ is a conclusion 3ithout a p&e%ise' its basis bein6i%p&ope&l2 left to speculation an/ conectu&e. In all e-ents' the cou&t%ust eplicitl2 state in the tet of the /ecision' an/ not onl2 in the/ec&etal po&tion the&eof' the le6al &eason fo& the a3a&/ of atto&ne2sfees.$ AE%phasis supplie/B

>hile it %entione/ about the a3a&/ of atto&ne2s fees b2 statin6 thatit Jlies 3ithin the /isc&etion of the cou&t an/ /epen/s upon theci&cu%stances of each case'J the Cou&t of )ppeals faile/ to point outan2 ci&cu%stance to ustif2 the a3a&/.

IV.

>hethe& F,NI is soli/a&il2 liable 3ith Ri%a an/ )le6&e fo& %o&al/a%a6es' atto&ne2s fees an/ costs of suit

F,NI conten/s that it is not soli/a&il2 liable 3ith Ri%a an/ )le6&e fo&the pa2%ent of /a%a6es an/ atto&ne2s fees because it ee&cise//ue /ili6ence in the selection an/ supe&-ision of its e%plo2ees'pa&ticula&l2 Ri%a an/ )le6&e. F,NI %aintains that its b&oa/caste&s'inclu/in6 Ri%a an/ )le6&e' un/e&6o a J-e&2 &e6i%ente/ p&ocessJbefo&e the2 a&e allo3e/ to 6o on ai&. JThose 3ho appl2 fo&b&oa/caste& a&e subecte/ to inte&-ie3s' ea%inations an/ anapp&enticeship p&o6&a%.J

F,NI fu&the& a&6ues that )le6&es a6e an/ lac7 of t&ainin6 a&ei&&ele-ant to his co%petence as a b&oa/caste&. F,NI points out thatthe J%ino& /eficiencies in the K,P acc&e/itation of Ri%a an/ )le6&e/o not in an2 3a2 p&o-e that F,NI /i/ not ee&cise the /ili6ence of a6oo/ fathe& of a fa%il2 in selectin6 an/ supe&-isin6 the%.J Ri%asacc&e/itation lapse/ /ue to his non=pa2%ent of the K,P annual fees

3hile )le6&es acc&e/itation ca&/ 3as /ela2e/ alle6e/l2 fo& &easonsatt&ibutable to the K,P Manila Office. F,NI clai%s that %e%be&shipin the K,P is %e&el2 -olunta&2 an/ not &e8ui&e/ b2 an2 la3 o&6o-e&n%ent &e6ulation.

F,NIs a&6u%ents /o not pe&sua/e us.

The basis of the p&esent action is a to&t. *oint to&t feaso&s a&e ointl2an/ se-e&all2 liable fo& the to&t 3hich the2 co%%it.$! *oint to&t

feaso&s a&e all the pe&sons 3ho co%%an/' insti6ate' p&o%ote'encou&a6e' a/-ise' countenance' coope&ate in' ai/ o& abet theco%%ission of a to&t' o& 3ho app&o-e of it afte& it is /one' if /one fo&thei& benefit.$< Thus' )MEC co&&ectl2 ancho&e/ its cause of actiona6ainst F,NI on )&ticles !9: an/ !(; of the Ci-ilCo/e.aXWphi.net

)s ope&ato& of DQRC=)M an/ e%plo2e& of Ri%a an/ )le6&e' F,NI issoli/

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