VELARDE - v - LOPEZ
Facts:
4. Lopez Inc filed a complaint for collection of
sum of money with damages at RTC Pasig against Velarde.
1. Eugenio Lopez Jr (then President of Lopez, Inc
– Respondent) as LENDER, and Mel Velarde – Petitioner (then General Manager of
Sky Vision Corporation, a subsidiary of Lopez, Inc) as BORROWER, forged a
notarized loan agreement covering P10 M.
2. The agreement expressly provided for the
manner of payment and the circumstances constituting default which would give
the lender the right to declare the loan together with accrued interest
immediately due and payable.
3. Velarde failed to pay the installments and
proposed a settlement of the loan. Lopez, Inc then advised Velarde that he may
use his retirement benefits in Sky Vision in partial settlement of his loan
after he settles his accountabilities and gives his written instructions to Sky
Vision. Velarde protested the computation of his accountabilities.
5. Velarde alleged that the loan agreement did
not reflect his true agreement with Lopez Inc –
a.
That it’s a cover
document to evidence the reward to him of P10M for his loyalty and excellent
performance as General Manager of Sky Vision
b. That the payment was in the form of continued
service
c.
That when he was
compelled by Lopez Inc to retire, the form of payment agreed was rendered
impossible, prompting the late Lopez, Jr. to agree that his retirement benefits
from Sky Vision would instead be applied to the loan
6. By way of compulsory counterclaim, Velarde
claimed that he was entitled to retirement benefits from Sky Vision, etc,
prayed for dismissal of the complaint, that the veil of corporate fiction must
be pierced to hold Lopez Inc liable for his counterclaims.
7. RTC Pasig – Did not dismiss the counterclaim; there
is identity of interest between Lopez Inc and Sky Vision to merit the piercing
of the veil of corporate fiction.
8. CA – Dismissed the counterclaim
a.
Lopez Inc is not the real party-in-interest on
the counterclaim
b. failure to show the presence of any of the
circumstances to justify the application of the principle of piercing the veil
of corporate fiction.
Issue: WON the veil of corporate fiction must be
pierced to hold Lopez Inc liable for Velarde’s counterclaims
Held:
Denied.
-
The filing of
counterclaims against Lopez Inc is improper, it not being the real
party-in-interest which must be Velarde’s employer Sky Vision, Lopez Inc’s
subsidiary.
-
A subsidiary has
an independent and separate juridical personality, distinct from that of its
parent company, hence, any claim or suit against the latter does not bind the
former and vice versa.
-
Piercing the veil
of corporate fiction is warranted only in cases when the separate legal entity
is used to defeat public convenience, justify wrong, protect fraud, or defend
crime, such that in the case of two corporations, the law will regard the corporations
as merged into one.
-
The rationale
behind piercing a corporations identity is to remove the barrier between the
corporation from the persons comprising it to thwart the fraudulent and illegal
schemes of those who use the corporate personality as a shield for undertaking
certain proscribed activities.
-
In applying the
doctrine of piercing the veil of corporate fiction, the following requisites
must be established:
(1) control, not merely majority or
complete stock control;
(2) such control must have been used
by the defendant to commit fraud or wrong, to perpetuate the violation of a
statutory or other positive legal duty, or dishonest acts in contravention of
plaintiffs legal rights; and
(3) the aforesaid control and breach
of duty must proximately cause the injury or unjust loss complained of
-
Nowhere in the
pleadings and other records of the case can it be gathered that respondent has
complete control over Sky Vision, not only of finances but of policy and
business practice in respect to the transaction attacked, so that Sky Vision
had at the time of the transaction no separate mind, will or existence of its
own.
-
The existence of
interlocking directors, corporate officers and shareholders is not enough
justification to pierce the veil of corporate fiction in the absence of fraud
or other public policy considerations.
-
Sky Visions
involvement in the transaction subject of the case sprang only after a proposal
was apparently proffered by petitioner that his retirement benefits from Sky
Vision be used in partial payment of his loan from respondent.
-
The July 15, 1998
letter of Rommel Duran, Vice-President and General Manager of Lopez Inc, to Velarde
is clear that, to effect a set-off, it is a condition sine qua non that the
approval thereof by Sky/Central must be obtained, and that petitioner liquidate
his advances from Sky Vision.
-
These conditions
hardly manifest that respondent possessed that degree of control over Sky
Vision as to make the latter its mere instrumentality, agency or adjunct.
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