Case Digest (G.R. No. L-44061) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Philippine National Bank et al. v. Hydro Resources Contractors Corporation, decided on March 13, 2013 under G.R. No. 167530 (consolidated with G.R. Nos. 167561 and 167603), respondent HRCC (successor by merger to Hercon, Inc.) contracted in 1985 with Nonoc Mining and Industrial Corporation (NMIC) for mine stripping and road construction worth ₱35,770,120.00. By foreclosure in 1984, petitioners Development Bank of the Philippines (DBP) and Philippine National Bank (PNB) had acquired the assets of Marinduque Mining and Industrial Corporation and organized NMIC, holding 57% and 43% of its shares, respectively. The board of NMIC was dominated by DBP and PNB appointees. When NMIC failed to pay a balance of ₱8,370,934.74 despite demands, Hercon sued NMIC, DBP, and PNB in 1986; HRCC was later substituted as plaintiff. After Proclamation No. 50 (Dec. 8, 1986) and related deeds of transfer on February 27, 1987, the Asset Privatization Trust (APT), now the Privatization and Management Case Digest (G.R. No. L-44061) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Background and formation of NMIC
- In 1984, the Development Bank of the Philippines (DBP) and the Philippine National Bank (PNB) foreclosed on Marinduque Mining and Industrial Corporation (MMIC) mortgages, acquired its assets, and organized Nonoc Mining and Industrial Corporation (NMIC) (DBP 57%, PNB 43%, plus five qualifying shares).
- NMIC’s board of directors comprised nominees of DBP and PNB.
- Contract with Hercon, Inc. and acquisition by HRCC
- In 1985, NMIC engaged Hercon, Inc. for a mine‐stripping and road construction program (contract price ₱35,770,120). After credits and payments, NMIC owed ₱8,370,934.74.
- Hercon made formal demands; upon nonpayment, it filed Civil Case No. 15375 in RTC Makati Branch 136. Hercon merged into Hydro Resources Contractors Corporation (HRCC), which was substituted as plaintiff.
- Transfers under Proclamation No. 50 and impleading of APT
- Proclamation No. 50 (Dec. 8, 1986) created the Asset Privatization Trust (APT). On Feb. 27, 1987, DBP and PNB transferred their NMIC stakes and liabilities to the National Government, which in turn transferred them to APT as trustee.
- HRCC amended its complaint to implead APT as a defendant, alleging solidary liability with NMIC’s stockholders.
- Trial court and Court of Appeals decisions
- RTC Makati (Nov. 6, 1995) pierced NMIC’s corporate veil, holding DBP and PNB solidarily liable for NMIC’s unpaid ₱8,370,934.74 plus interest and 25% attorney’s fees; dismissed APT but directed it, as trustee, to ensure compliance.
- CA (Nov. 30, 2004) affirmed piercing, held APT (succeeded by the Privatization and Management Office) solidarily liable, deleted attorney’s fees, and denied motions for reconsideration by PNB, DBP, and APT.
Issues:
- Whether the corporate veil of NMIC may be pierced to hold DBP and PNB solidarily liable for NMIC’s debt to HRCC.
- Whether APT, as successor‐in‐interest under Proclamation No. 50 and the deeds of transfer, assumed DBP’s and PNB’s liabilities to HRCC.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)