Case Digest (G.R. No. 164815) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
On January 23, 1985, Francisco Motors Corporation (petitioner) filed Civil Case No. 9542 before Branch 135 of the Regional Trial Court of Makati seeking recovery of ₱3,412.06 as balance for a jeep body purchase, ₱20,454.80 as unpaid repair costs, and ₱6,000 for litigation expenses and attorney’s fees against spouses Gregorio and Librada Manuel (respondents). In their answer, the Manuels interposed a permissive counterclaim for ₱50,000 as unpaid legal fees allegedly owed by petitioner’s incorporators, directors and officers—members of the Francisco family—for services rendered by Gregorio Manuel in Special Proceedings No. 7803 involving the intestate estate of their mother, Benita Trinidad. The trial court declared petitioner in default for failure to answer the counterclaim, admitted ex parte evidence, and awarded Gregorio Manuel the ₱50,000. Both parties appealed, and on April 15, 1991, the Court of Appeals affirmed the RTC decision. Petitioner then filed a petition for review Case Digest (G.R. No. 164815) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Origin of the dispute
- On January 23, 1985, Francisco Motors Corporation (FMC) filed Civil Case No. 9542 before Branch 135, Regional Trial Court (RTC) of Makati, Metro Manila, seeking:
- Spouses Gregorio and Librada Manuel (private respondents) answered and interposed a *permissive counterclaim* for ₱50,000.00, alleging Gregorio Manuel had rendered unpaid legal services to members of the Francisco family (who were incorporators, directors and officers of FMC) in intestate‐estate proceedings of the late Benita Trinidad.
- Proceedings in the trial court and Court of Appeals
- On June 26, 1985, the RTC:
- Awarded FMC its claimed amounts;
- Declared FMC in default for failing to answer the counterclaim and admitted ex parte evidence, then granted the ₱50,000.00 counterclaim in favor of the Manuels.
- FMC appealed. On April 15, 1991, the Court of Appeals (CA G.R. CV No. 10014):
- Affirmed the RTC decision in its entirety;
- Held that no separate summons was required for the counterclaim, that FMC had submitted to jurisdiction (even filing a motion for reconsideration), and that the corporate veil could be pierced on equitable grounds to charge FMC with the unpaid attorney’s fees.
- Petition for review on certiorari
- FMC filed a Rule 45 petition before the Supreme Court, assigning errors:
- Erroneous application of the doctrine of piercing the veil of corporate entity;
- Lack of jurisdiction over the permissive counterclaim for want of service of summons.
- The Supreme Court granted the petition to resolve:
- Whether FMC could be held liable for personal legal fees by disregarding its separate corporate personality;
- Whether a permissive counterclaim requires a separate summons for the court to acquire jurisdiction.
Issues:
- Whether the Court of Appeals erred in piercing the corporate veil of FMC to hold it liable for unpaid legal fees incurred by individual incorporators, directors and officers.
- Whether the trial court and Court of Appeals properly exercised jurisdiction over FMC’s permissive counterclaim without service of a separate summons.
- Whether FMC’s filing of a motion for reconsideration estopped it from challenging jurisdiction over the counterclaim.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)