Case Summary (G.R. No. 85416)
Background and Procedural History
The case originates from a complaint filed by the private respondent at the Philippine Overseas Employment Administration (POEA) accusing Philsa Construction and Trading Co., Inc. and Arieb Enterprises of owing salary differentials and vacation benefits. The POEA dismissed the complaint for lack of merit on February 4, 1986. This decision was subsequently appealed to the NLRC, which on April 30, 1987, reversed the POEA's ruling and ordered the payment of the claims. The Supreme Court dismissed the appeal against the NLRC's decision on August 31, 1987, leading to a writ of execution that was returned unsatisfied due to Philsa's operational status and financial incapacity.
Issuance of Alias Writ of Execution
Following the unsuccessful execution of the original writ, the private respondent sought an alias writ against the corporate officers of Philsa, including the petitioner. The POEA granted this request, asserting that the corporate veil should be pierced due to alleged fraudulent circumvention of obligations. Petitioner appealed the POEA's decision to the NLRC, which dismissed the appeal on September 23, 1988. The Tribunal's subsequent denial of the motion for reconsideration led petitioner to file a petition for review, claiming the NLRC acted with grave abuse of discretion.
Findings of the Court
The Supreme Court found that the NLRC had indeed committed an error by affirming the POEA's resolution to issue an alias writ of execution against the petitioner. The Court clarified that a corporation, as a separate legal entity, should only have its personality disregarded under specific circumstances, namely when it is proven to be used to perpetrate fraud or injustice. In this instance, the findings relied upon by the NLRC failed to substatiate claims of wrongdoing on the part of Philsa.
Corporate Personality and Liability
The Court elaborated on the principle of separate corporate personality established in the Civil Code and Corporation Code, discussing how piercing the corporate veil requires a clear and convincing showing of fraud. In this case, the evidence did not suggest that Philsa's failure to renew its license constituted an intent to evade payment. Key facts included the timeline of events where no judgment existed when the license was allowed to lapse. Therefore, the notion that Philsa acted with fraudulent intentions remained unproven.
Distinction from Precedent Cases
The Court also distinguished the case from precedent decisions where the corporate veil was pierced due to clear indications of fraud. Comparisons were drawn with cases like A.C. Ransom Labor Union-CCLU v. NLRC and others, emphasizing that the circumstances surrounding Philsa’s operations did not demonstrate fraudulent behavior or an avoidance of liabilities, hence upholding its separate legal status.
Proper Execution of Judgm
...continue readingCase Syllabus (G.R. No. 85416)
Case Overview
- Petitioner: Francisco V. Del Rosario
- Respondents: National Labor Relations Commission (NLRC) and Leonardo V. Atienza
- Case Reference: G.R. No. 85416
- Date of Decision: July 24, 1990
- Division: Third Division of the Supreme Court of the Philippines
Background of the Case
- The Philippine Overseas Employment Administration (POEA) dismissed a complaint for money claims filed by private respondent on February 4, 1986, citing a lack of merit.
- The private respondent appealed to the NLRC, which reversed the POEA decision on April 30, 1987, ordering Philsa Construction and Trading Co., Inc. and Arieb Enterprises to pay a total of $18,459.03 in salary differentials and vacation benefits.
- The Supreme Court dismissed the subsequent petition on August 31, 1987, with a judgment entry on September 24, 1987.
- An alias writ of execution was issued by the POEA but was returned unsatisfied as Philsa was no longer operational and financially incapable of meeting the judgment.
Motion for Alias Writ Against Petitioner
- The private respondent sought an alias writ against the officers of Philsa, including the petitioner, who is the president and general manager.
- On February 12, 1988, the POEA resolved to issue an alias writ against the petitioner’s properties, and if insufficient, against his cash and/or surety bond.
- The petitioner opposed this motion and appealed to the NLRC.