Case Digest (G.R. No. 200015) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Lucia Magaling, Paraluman R. Magaling, Marcelina Magaling-Tablada, and Benito R. Magaling (heirs of the late Reynaldo Magaling) v. Peter Ong (G.R. No. 173333, decided August 13, 2008), petitioner Ong filed on September 30, 1998 before the RTC of Lipa City a Complaint for collection of ₱389,000 with interest, attorneys’ fees and costs, alleging that spouses Reynaldo and Lucia Magaling, as controlling stockholders of Thermo Loans and Credit Corporation, used the corporation as their alter ego to avoid payment. Ong claimed he extended a ₱350,000 loan in December 1994 at 2.5% per month, evidenced by series of postdated checks starting September 1997, only two of which were honored. After dishonor of other checks and unsuccessful demands, Ong secured a writ of preliminary attachment over two titled lands of the Magalings. The Spouses moved to discharge the attachment for lack of personal liability and separate corporate personality, which the RTC granted on February 19, 1999. In J Case Digest (G.R. No. 200015) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Petition
- Petitioners are the heirs of the late Reynaldo Magaling—Lucia Magaling (née Lucila), Paraluman R. Magaling, Marcelina Magaling-Tablada, and Benito R. Magaling—formerly sued together with Reynaldo Magaling and Termo Loans and Credit Corporation (“Termo Loans”).
- Respondent is Peter Ong, creditor of Termo Loans by virtue of a money placement/loan.
- Petition for Review on Certiorari under Rule 45 assails the Court of Appeals’ (CA) Decision of 31 August 2005 and Amended Decision of 28 June 2006 in CA-G.R. CV No. 70954, which reversed RTC rulings and held petitioners jointly liable for Termo Loans’ obligation and reinstated a writ of preliminary attachment.
- Underlying Transaction and Complaint
- In December 1994, Ong extended P350,000 to Termo Loans at 2.5% monthly interest, allegedly induced by assurances of Reynaldo Magaling, then President and controlling stockholder.
- By September 1997, outstanding principal remained P350,000; interest of P8,750 per month was evidenced by post-dated checks Nos. 0473400–0473406, of which only two cleared. As of June 30, 1998, total obligation reached P389,043.96.
- Ong’s Amended Complaint (November 1998) alleged that the spouses Magaling used Termo Loans as mere alter ego to evade payment, and prayed for P389,000 plus interest, attorney’s fees, costs, and issuance of a writ of preliminary attachment against spouses Magaling and their properties.
- RTC Proceedings
- On 7 October 1998 the RTC granted preliminary attachment (Rule 57, Sec. 1[d]) upon bond of P390,000, attaching two titled land parcels of spouses Magaling.
- Termo Loans defaulted; Ong presented evidence ex parte. Spouses Magaling moved to discharge attachment (Sec. 13, Rule 57) on ground that obligation was strictly corporate and checks bore no personal signatures.
- RTC Order of 19 February 1999 discharged attachment, finding (a) obligation was corporate; (b) checks lacked spouses’ signatures; and (c) alleged fraud on checks occurred after inception of debt.
- On 23 June 1999 RTC rendered Decision against Termo Loans ordering payment of P350,000 plus 2.5% monthly interest, attorney’s fees, litigation expenses, and costs; execution later returned unsatisfied.
- On 5 February 2001, in the same case but against spouses Magaling, RTC dismissed the complaint for lack of merit, holding that corporate debts are not personal obligations of officers/stockholders.
- Court of Appeals Proceedings
- In its 31 August 2005 Decision, the CA reversed the 5 February 2001 RTC dismissal, pierced the corporate veil for gross negligence of Reynaldo Magaling, and declared spouses Magaling jointly and severally liable for the corporate debt adjudged on 23 June 1999.
- Spouses Magaling’s motion for reconsideration was denied. Ong’s partial motion to nullify the discharge of attachment was granted in the CA Amended Decision of 28 June 2006, reinstating the writ as “effective and subsisting.”
Issues:
- Whether the Court of Appeals gravely abused its discretion in piercing the corporate veil to hold petitioners personally liable for Termo Loans’ corporate obligation.
- Whether the Court of Appeals gravely abused its discretion in reinstating the writ of preliminary attachment against petitioners’ properties.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)