Case Digest (G.R. No. 240144) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Kukan International Corporation v. Hon. Amor Reyes et al. (G.R. No. 182729, September 29, 2010), Romeo M. Morales, doing business as RM Morales Trophies and Plaques, obtained a final RTC decision (Branch 17, later raffled to Branch 21) dated November 28, 2002, ordering Kukan, Inc. to pay ₱1,201,724.00 plus interest, moral damages, attorney’s fees and litigation expenses for unpaid signage contracts awarded in March 1998. After Kukan, Inc. ceased participation, Morales secured a writ of execution (February 7, 2003) and levied on personal properties at Unit 2205, 88 Corporate Center, Makati City registered under Kukan International Corporation (KIC), which was incorporated in August 2000. KIC filed an Affidavit of Third-Party Claim, opposed Morales’s Omnibus Motion to pierce the corporate veil, and resisted a Motion for Examination of Judgment Debtors. Upon transfer to Branch 21 under Judge Amor Reyes, Morales’s renewed Motion to Pierce the Veil (January 3, 2007) was granted by Case Digest (G.R. No. 240144) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Background of the Dispute
- In March 1998, Kukan, Inc. (a distinct corporation) awarded Romeo M. Morales a PhP 5 million contract (later reduced to PhP 3,388,502.00) for signages in Makati City. Morales performed but received only PhP 1,976,371.07, prompting him to sue for the unpaid PhP 1,412,130.93.
- Morales filed Civil Case No. 99-93173 in the RTC of Manila, Branch 17. After Kukan, Inc. defaulted in November 2000, the court allowed ex parte evidence.
- RTC Judgment and Execution Against KIC
- On November 28, 2002, the RTC rendered final judgment against Kukan, Inc. ordering payment of PhP 1,201,724.00 (plus 12% interest), PhP 50,000.00 moral damages, PhP 20,000.00 attorney’s fees, and PhP 7,960.06 litigation expenses.
- Morales secured a writ of execution (February 2003) and levied on personal properties at Unit 2205, 88 Corporate Center—owned and occupied by Kukan International Corporation (KIC), incorporated August 2000. KIC filed an Affidavit of Third-Party Claim.
- Morales moved (April 2003) to pierce the corporate veil and hold KIC liable; the trial court denied (May 2003, May 2005). After Judge Peralta’s inhibition, the case was re-raffled to Branch 21.
- Piercing Orders, CA Proceedings and SC Petition
- RTC Branch 21 granted Morales’s “Motion to Pierce the Veil of Corporate Fiction” on March 12, 2007, declaring Kukan, Inc. and KIC one and the same, and made KIC jointly liable. Reconsideration was denied June 7, 2007.
- KIC petitioned the CA; on January 23, 2008 it was denied, and a motion for reconsideration was denied April 16, 2008.
- KIC filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court (G.R. No. 182729).
Issues:
- May a final and executory judgment against Kukan, Inc. be executed against KIC?
- Did the RTC acquire jurisdiction over KIC, given it was never impleaded or served with summons?
- Was the principle of piercing the corporate veil properly applied to hold KIC liable for Kukan, Inc.’s indebtedness?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)