G.R. No. L-25142 - Philippine Rabbit Bus Lines, Inc. vs. Phil-American Forwarders, Inc.

Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan (plaintiffs-appellants) filed a complaint against Phil-American Forwarders, Inc., Archimedes J. Balingit, and Fernando Pineda (defendants-appellees) seeking damages.
The case was dismissed by the Court of First Instance of Tarlac against Archimedes J. Balingit on the ground he was not liable as manager under Article 2180 of the Civil Code. The plaintiffs appealed on pure questions of law.

On November 24, 1962, Fernando Pineda drove recklessly a freight truck owned by Phil-American Forwarders, Inc., along the national highway at Sto. Tomas, Pampanga.
The truck collided with a bus driven by Felix Pangalangan and owned by Philippine Rabbit Bus Lines, Inc.
As a result, Pangalangan suffered injuries, and the bus was damaged, becoming unusable for seventy-nine days.
The company claimed loss of earnings amounting to P8,665.51 due to the damage to the bus.

The complaint was anchored on quasi-delict (culpa aquiliana), holding Phil-American Forwarders, Inc., its manager Balingit, and driver Pineda liable for damages.
Defendants argued that Balingit was not Pineda’s employer and moved for dismissal of complaints against Balingit for lack of cause of action.
The trial court ruled in favor of defendants, dismissing the complaint against Balingit as the manager of Phil-American Forwarders, Inc., under Article 2180 of the Civil Code.

Appellants raised a new factual issue claiming Phil-American Forwarders, Inc. is a mere business conduit of Balingit and wife, owning almost the entire subscribed capital stock.
They argued that the corporate veil should be pierced to treat Balingit and the corporation as one entity for liability purposes.
The Court, however, refused to entertain this issue since it was not alleged in the complaint nor raised in the lower court.

Whether Archimedes J. Balingit, as manager of Phil-American Forwarders, Inc., is liable under Article 2180 of the Civil Code for the quasi-delict committed by driver Fernando Pineda.

Whether the terms “owners and managers of an establishment or enterprise” under Article 2180 Civil Code include the manager of a corporation such as Balingit.

Whether the corporate veil should be pierced to hold Balingit personally liable due to his dominant ownership and control of Phil-American Forwarders, Inc. for the damages caused by the truck.