Case Digest (G.R. No. 198436)
Facts:
Pioneer Insurance Surety Corporation v. Morning Star Travel & Tours, Inc., G.R. No. 198436, July 08, 2015, Supreme Court Second Division, Leonen, J., writing for the Court.Petitioner Pioneer Insurance & Surety Corporation (Pioneer) insured the credit exposure of the International Air Transport Association (IATA) under credit insurance policies covering accredited travel agents, including respondent Morning Star Travel & Tours, Inc. (Morning Star). Under Morning Star’s Passenger Sales Agency Agreement with IATA, Morning Star was to report ticket sales and remit amounts due to airlines through IATA’s centralized Billing and Settlement Plan; such remittances were the airlines’ funds and held in trust by Morning Star.
IATA declared Morning Star in default for overdue remittances and, after validating claims under its credit insurance, Pioneer paid IATA the sums of Php100,479,171.59 and US$457,834.14. IATA executed a Release of Claim and Subrogation Receipt in Pioneer’s favor on December 23, 2003. Pioneer then demanded reimbursement from Morning Star and, on November 10, 2005, filed a Complaint for Collection of Sum of Money and Damages against Morning Star and its shareholders/officers — Estelita Co Wong, Benny H. Wong, Arsenio Chua, Sonny Chua, and Wong Yan Tak.
At the trial court (Regional Trial Court, Makati City, Branch 143), some respondents were served while others were not; defendants were declared in default after failing to timely answer and Pioneer presented its evidence ex parte. The trial court, in a November 9, 2007 Decision, found for Pioneer and ordered the defendants to jointly and severally pay the amounts Pioneer had disbursed, plus interest at 12% from September 23, 2003, attorney’s fees and exemplary damages.
On appeal, the Court of Appeals (Sixth Division) in a February 28, 2011 Decision affirmed the trial court but modified the judgment by deleting the joint and several liability of the individual officers/shareholders and holding only Morning Star liable; it also deleted exemplary damages and attorney’s fees for lack of basis. Pioneer’s motion for partial reconsideration was denied (Aug. 31, 2011), and Pioneer filed a petition for review with this Court under Rule 45 of the Rules of Court, challenging only the Court of Appeals’ deletion of the individual respondents’ solidary liability.
Pioneer urged that the corporate veil should be pierced under Section 31 of the Corporation Code because the individual respondents acted in gross negligence or bad faith and pointed to alleged badges of...(Subscriber-Only)
Issues:
- Does this petition fall within an exception allowing the Supreme Court to review the Court of Appeals’ factual findings (i.e., may the Court revisit factual issues under Rule 45)?
- Should the corporate veil be pierced so that the individual respondents are held solidarily liable with Morning Star under Section 31...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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