Case No. 1: A.

Doctrine of Separate and Legal Personality

Palay, INC vs Jacobo C. Clave; GR No. L-56076; September 21, 1983

Ponente: Melencio-Herrera.:

Facts: A contract to sell was executed between the petitioner Palay inc. through
its President Albert Onstoff and Nazario Dumpit for a parcel of land payable with
down payment and monthly installment until fully paid. Therein contains a
stipulation on paragraph 6 that in case of default in payment on its monthly
installment after the lapse of 90 days from the expiration of the grace period of
one month, there would be an automatic extra judicial rescission without the need
for notice and would also result to the forfeiture of all installment paid. Hereafter
Dumpit faild to pay the installments for almost 6 years. Dumpit wrote to the
petitioner of his intention to settle his overdue account, including the interest. The
petitioner reply that the contract to sell has long been rescinded and even resold
because of the automatic extra judicial rescission contained on paragraph 6 of
the contract. Consequently a complaint was filed by Dumpit with the NHA for the
reconveyance of the land or refund. NHA finds that the rescission was void for
lack of notarial or judicial demand and directing the petitioner along with its
president to refund to Dumpit the installments paid, in a solid and joint capacity.
On appeal to the Presidential Executive Assistant Clave affirmed the decision.

Issue: WON or not the corporate veil of Palay, Inc should be pierced .

Ruling: No. The Supreme Court held that in this case, there was no finding of
fraud on the petitioners part, the reliance to the stipulation to the contract of sale
particularly on sec 6 that the property can be sold and be rescinded are simply
erroneous.
A corporation is given a distinct and separate personality from its stockholder,
being a different entity by operation of law. As a general rule the corporation may
not be liable to answer for the acts or liabilities of a stockholder. However the veil
of the corporation may only be pieced when it is used as a shield to further and
end subversive of justice; or to purposed that could not have been intended by
law that created; or defeat public convenience, justify wrong, protect fraud or
defend crime of to perpetuate fraud or confuse legitimate issue; or to circumvent
law or perpetuate fraud. Such is not the case at bar.

Case No. 2: A. Doctrine of Separate and Legal Personality

Adelio C. Cruz vs Quiterio L. Dalisay; Adm. Matter No R-181; July 31, 1987

Ponente: Fernan, J.:

Facts: Senior Deputy Sheriff of Manila Dalisay was charged with malfeasance in
office, corrupt practices and serious irregularities by Adelio Cruz.

A notice of garnishment was served by the respondent sheriff to Philtrust Bank of

Pasay branch when the judgement on the labor case filed against Qualitrans
Limousine Service Inc. to pay the dismissed employee full back wages. The
sheriff upon the advised of the counsel for plain tiff that the owner of the company
was Cruz.

Issue: WON Cruz, even if being an owner/ president of the limousine company
should not be treated as a judgment debtor to the labor case, that being the
owner of the company piercing the corporate veil should be availed thereof.

Ruling : It is a well settled doctrine that both in law and in equity that as a legal
entity, a corporation has a personality distinct and separate from its individual
stockholders or members. The mere fact that one is president of a corporation
does not render the property he owns or possesses the property of the
corporation since the president, as an individual, and the corporation are
separate.

Thus it was found that Sheriff Dalisay to be NEGLIGENT in the enforcement of

the writ of execution in his act of piercing the corporate veil.

Case No. 3: A. Doctrine of Separate and Legal Personality

Jose Remo Jr vs Intermediate Appellate Court.; GR No. L-67626; April 18,

1989

Ponente: Gancayco, J,:

Facts: Petitioner Jose Remo is included with the Board of Directors for Akron
which approved a resolution together with the president of the company Coprada,
to purchase truck and sought to purchase it in installment from Marcha Transport
Company. Akron was several time in default in its installments and eventually
failed to pay. Prior to the change of name Remo sold his shares to Coprada.
Despite of Akron having a separate entity through the operation of law Remo was
included in the case piercing the corporate veil.

Issue: WON the court was correct in, including Remo as one of the respondent to
the case even if he is a person distinct from the person of the corporation?

Ruling: No, Remo Jr. should not be held personally liable together with Akron
Transport International.

The environmental facts of this case shows that there is no cogent basis to pierce
the corporate veil of Akron and hold petitioner personally liable.

Although when the resolution was made for the purchase of the truck and that
Remo Jr. was still part of the board at that time, it was not done to defraud
anyone. Further more the word WE in the said promissory note which refer to
the corporation with Coprada, represented with the presentation of the note and
not her stockholder and his directors.

Also to pierce the corporate veil the fraud must be clearly established and with
convincing evidence. The petition was granted because the corporation is a
separate entity from its directors and owners.