Case Digest (G.R. No. 182729)
Facts:
Kukan International Corporation v. Hon. Amor Reyes, G.R. No. 182729, September 29, 2010, First Division, Velasco Jr., J., writing for the Court.
Petitioner Kukan International Corporation (KIC) sought review of the Court of Appeals' January 23, 2008 Decision and April 16, 2008 Resolution in CA‑G.R. SP No. 100152. The CA had affirmed the Regional Trial Court (RTC) of Manila, Branch 21, Orders dated March 12, 2007 and June 7, 2007 that disregarded the separate corporate identities of Kukan, Inc. and KIC, and held KIC liable for a final judgment previously rendered against Kukan, Inc. in Civil Case No. 99‑93173.
The underlying controversy began when, in March 1998, Kukan, Inc. awarded a PhP 5 million contract (later reduced to PhP 3,388,502) to Romeo M. Morales for signages; Morales was paid only PhP 1,976,371.07, leaving PhP 1,412,130.93 unpaid. Morales sued Kukan, Inc.; after Kukan, Inc. ceased participation in trial beginning November 2000, the RTC (Branch 17) declared it in default and, on November 28, 2002, rendered judgment in Morales' favor ordering Kukan, Inc. to pay principal, interest, damages, attorney’s fees and costs. That decision became final and executory.
Morales obtained a writ of execution (dated February 7, 2003) and the sheriff levied personal properties at Unit 2205, 88 Corporate Center, believed to be Kukan, Inc.’s office. KIC—incorporated in August 2000, after Kukan, Inc. had stopped participating in the trial—filed an Affidavit of Third‑Party Claim asserting ownership of the levied properties and a separate corporate identity. Morales filed an Omnibus Motion (April 30, 2003) asking the trial court to pierce the corporate veil and apply the judgment to KIC’s assets; the trial court initially denied that motion (May 29, 2003) and later denied a motion for examination of judgment debtors (May 24, 2005).
After the presiding judge was inhibited and the case re‑raffled to RTC Branch 21 (Judge Amor Reyes), Morales filed a Motion to Pierce the Veil of Corporate Fiction. By Order dated March 12, 2007 the RTC granted the motion, declaring Kukan, Inc. and Kukan International Corp. one and the same, validating the levy on KIC’s properties, and holding KIC and Michael Chan joint...(Pro-only)
Issues:
- Can a final and executory judgment against Kukan, Inc. be executed against the property of Kukan International Corporation after finality of the judgment?
- Did the RTC acquire jurisdiction over Kukan International Corporation so as to subject it to execution despite it not having been impleaded or served with summons?
- Was it proper to apply and invoke the doctrine of piercing the corporate veil against Kukan International Corporatio...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)