Facts:

The case concerns a petition for review on certiorari filed by the Bank of Commerce (petitioner) against Marilyn P. Nite (respondent). It stems from a ruling by the Court of Appeals dated November 22, 2013, which upheld previous decisions by the Makati Regional Trial Court (RTC) on the matter. The RTC had acquitted Nite of charges related to her alleged violations of Section 19 of Batas Pambansa Bilang 178 and estafa in Criminal Case Nos. 94-5267 and 94-5268, while imposing a civil liability against her for the amount of PHP 162 million, which was considered the obligation of her corporate entity, Bancapital Development Corporation (Bancap).

Nite was charged along with Nunelon Bradley and Victoria Magalona-Escalambre for engaging in the business of selling treasury bills (T-bills) amounting to PHP 250 million, without the requisite registration as brokers or dealers. The Information stated that this transaction occurred on April 25, 1994, in Makati, Metro Manila. Concurrently,

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Facts:

Background of the Case

• The case involves a petition for review on certiorari by Bank of Commerce (petitioner) against Marilyn P. Nite (respondent), arising from criminal and civil proceedings.
• The proceedings arose from two separate criminal cases:
• Criminal Case No. 94-5267—allegation of violation of Section 19 of Batas Pambansa Bilang 178 for selling treasury bills without proper registration.
• Criminal Case No. 94-5268—allegation of estafa for fraudulently inducing the Bank of Commerce (Bancom) to purchase treasury bills that were not actually in possession of Bancapital Development Corporation (Bancap).

Factual Allegations in the Criminal Cases

• In Criminal Case No. 94-5267:
• Respondent Nite, along with others, was charged with having engaged in the business of selling treasury bills worth Php250 million by Bancap without being duly accredited as a broker, dealer, or salesman.
• The charge centered on the operation of Bancap as a secondary dealer and not as a primary dealer, raising issues on regulatory compliance.
• In Criminal Case No. 94-5268:
• The prosecution alleged that Nite, through fraudulent misrepresentations, misled Bancom into believing that Bancap possessed and could deliver treasury bills worth Php250 million.
• Bancom made payment of Php243,215,972.52, but only received substitute treasury bills amounting to approximately Php88 million, resulting in an alleged loss of Php162 million due to non-delivery of the remaining bills.
• The transaction narrative emphasized that there was no proof of physical possession of the treasury bills by Bancap, and that Bancom was aware, at least to some extent, of the operational setup.

Trial Court Proceedings and Decisions

• The Regional Trial Court of Makati City, Branch 150, conducted a joint trial for both criminal cases:
• In Criminal Case No. 94-5267, the trial court acquitted Nite of violating Section 19 of BP Blg. 178, finding that Bancap acted as a secondary dealer.
• In Criminal Case No. 94-5268, while Nite was acquitted of estafa on the ground that the element of deceit was lacking, she was held civilly liable for the undelivered treasury bills amounting to Php162 million.
• Post-trial Developments:
• Nite filed a partial motion for reconsideration whereby the civil liability portion of the decision was initially modified.
• The prosecution subsequently moved for reconsideration, arguing that the trial court erred in not piercing the corporate veil of Bancap to impose personal liability on Nite.
• The trial court, in its 5 January 2004 Omnibus Order, denied the prosecution’s motion for reconsideration based on lack of merit.

Court of Appeals Proceedings

• Bancom sought relief from the Court of Appeals (CA-G.R. CV No. 81500), challenging both the trial court’s order and the subsequent reconsideration orders.
• The Court of Appeals:
• In its Decision dated 22 November 2013, affirmed the trial court’s Order of 4 April 2003 and the Omnibus Order of 5 January 2004 without deviation.
• Found that Bancom’s attempt to impose corporate obligations on Nite personally was misplaced since the contractual claim was inherently against Bancap.
• Upheld that the transaction was an ordinary sale between the parties, and that Nite’s participation did not provide grounds for piercing the corporate veil.
• Bancom’s motion for reconsideration before the Court of Appeals was denied in the Resolution of 28 February 2014.

Petition for Review

• Bancom elevated issues to the Supreme Court by filing a petition for review, challenging the ruling regarding the allocation of civil liability solely to Bancap rather than Nite personally.
• The principal arguments revolved around alleged misuse of the corporate structure to evade obligations and the proposition that Nite’s active role should warrant personal liability.

Issue:

• Whether the Court of Appeals erred in holding that the civil liability for the non-delivery of treasury bills was attributable solely to Bancapital Development Corporation (Bancap) and not to respondent Nite personally, despite her active role in the transaction.
• Whether the lower courts erred in not piercing the corporate veil of Bancap to hold Nite personally liable, given the allegations that she used the corporation as a tool to commit fraudulent and patently unlawful acts against Bancom.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)