NAMARCO vs. Associated Finance Co. Facts of the Case: 1.

On March 25, 1958, Associated, a domestic corporation, through its Presi dent, appellee Francisco Sycip entered into an agreement to exchange sugar with NAMARCO, represented by its then General Manager, Benjamin Estrella, whereby the former would deliver to the latter 100 pounds of Victorias refined sugar in exc hange for 7,732.71 bags of Busilak and 17, 285.08 piculs of Pasumil raw sugar belo nging to NAMARCO. 2. Pursuant thereto, on May 19, 1958, NAMARCO delivered to Associated 7,732 .71 bags of Busilak and 17,285.08 piculs of Pasumil domestic raw sugar. 3. Associated failed to deliver to NAMARCO the agreed 100 pounds of Victori a and/or National refined sugar agreed upon, the latter, on January 12, 1959, de manded in writing from Associate either (a) immediate delivery thereof before Ja nuary 20, or (b) payment of its equivalent cash value amounting to P372,639.80. 4. As Associated refused to deliver the raw sugar or pay for the refined su gar delivered to it, inspite of repeated demands therefore, NAMARCO instituted t he present action in the lower court to recover the sum of P403,514.28 in paymen t of the raw sugar received by defendants. Issue: Whether upon the facts found by the trial court, Francisco Sycip, may be held liable, jointly and severally with his co-defendant for the sums of money a djudged in favor of NAMARCO? The Court Held: The foregoing facts, fully established by the can lead to no oth er conclusion than that Sycip was guilty of fraud because through false represen tations he succeeded in inducing NAMARCO to enter into the aforesaid exchange ag reement, with full knowledge, on his part, of the fact that Associated whom he r epresented and over whose business and affairs he had absolute control, was in n o position to comply with the obligation it had assumed. The court feels perfectly justified in piercing the veil of corporate fiction and in holding Sycip personally liable jointly and severally with his co-defendant. It is settled that when the corporation is the mere alter ego of a person, the corporate fiction may be disregarded; the same being true when the corporation i s controlled and its affairs are so conducted as to make it merely an instrument ality, agency or conduit of another. Villa Rey Transit Inc. vs. Ferrer Facts of the Case: 1. Prior to 1959, Jose M. Villarama was an operator of a bus transportation , under the business name of Villa Rey Transit, pursuant to certificates of publ ic convenience granted him by the Public Service Commission (PSC, for short) in Cases Nos. 44213 and 104651, which authorized him to operate a total 32 units on various routes or lines from Pangasinan to Manila and vice-versa. 2. He soled the two certificates of public convenience to Pantranco, with t he condition, among others, that the seller (Villarama), shall not for a period o f 10 years from the date of the sale, apply for any TPU service identical or com peting with the buyer. Issue: Is the above clause binding not only on the corporation but also on Villa rama? The Court Held: The interference of Villarama in the complex affairs of the corp oration, particularly its finances, are much too inconsistent with the ends and purposes of the Corporation law, which, precisely, seeks to separate personal re sponsibilities from corporate undertakings.

Under the foregoing considerations, we are of the opinion and so hold, that the preponderance of evidence have shown that Villa Rey Transit, is an alter ego of Jose M. Villarama, and that the restrictive clause in the contract entered into by the latter and Pantranco is also enforceable and binding against the corporat ion. Paradise Sauna vs. Ng Facts of the Case: 1. Petitioner allegedly terminated the respondents appointment as manager-ad ministrator as a result of his alleged failure to comply with the terms and cond itions of his appointment. 2. Initially respondent Ng filed a case for specific performance and damage s with prayer for a writ of preliminary mandatory injunction and attorneys fees a gainst petitioner. 3. Private respondent amended his complaint to one for breach of contract w ith damages with the same prayer for a writ of preliminary injunction and attorn eys fees. 4. The amended complaint alleged that on 30 December 1975 petitioners agree d to lease in favor of the private respondent Paradise Sauna and that as lessee of said business respondent shall have full and sole control thereof. 5. The court ruled that the contract was a contract of lease. Issue: Is petitioner Uy severally liable with petitioner corporation?

The Court Held: There is proof obtaining in the case at bar as to the real nature of Exhibit A. Thus, being a party to a simulated contract of management, petitioner Uy cannot be permitted to escape liability under the said contract by using the corporate entity theory. This is one instance when the veil of corporate entity has to be pierced to avoid injustice and inequity. (example: The receipts for November an d December substitute the word commission for rental. The respondent explained the change by stating that petitioner Uy changed the receipt as he realized that su bleasing the premises to Ng was a violation of the contract with the owner and t he latter might discover the violation.)