FIRST DIVISION SAN JUAN STRUCTURAL AND STEEL FABRICATORS, INC., petitioner, vs.

COURT OF APPEALS, MOTORICH SALES CORPORATION, NENITA LEE GRUENBERG, ACL DEVELOPMENT CORP. an !NM REALT" AND DEVELOPMENT CORP., respon ents. G.R. No. 129459 Septem e! 29, 199" S#LLABUS 1. CIVIL LA$% CONTRACTS% SALE% TRANSFER OR SALE OF CORPORATE PROPERT# B# T&E CORPORATION'S TREASURER $IT&OUT AN# AUT&ORIT# FRO( T&E BOARD OF DIRECTORS IS NULL AND VOID. # In $%ita%&', a (orporation )a' a(t on&' t*ro$+* its %oar o, ire(tors or, -*en a$t*ori.e eit*er %' its %'&a-s or %' its %oar reso&$tion, t*ro$+* its o,,i(ers or a+ents in t*e nor)a& (o$rse o, %$siness. T*e +enera& prin(ip&es o, a+en(' +overn t*e re&ation %et-een t*e (orporation an its o,,i(ers or a+ents, s$%/e(t to t*e arti(&es o, in(orporation, %'&a-s, or re&evant provisions o, &a-. T*$s, t*is Co$rt *as *e& t*at 0 1a (orporate o,,i(er or a+ent )a' represent an %in t*e (orporation in transa(tions -it* t*ir persons to t*e e2tent t*at t*e a$t*orit' to o so *as %een (on,erre $pon *i), an t*is in(&$ es po-ers -*i(* *ave %een intentiona&&' (on,erre , an a&so s$(* po-ers as, in t*e $s$a& (o$rse o, t*e parti($&ar %$siness, are in(i enta& to, or )a' %e i)p&ie ,ro), t*e po-ers intentiona&&' (on,erre , po-ers a e %' ($sto) an $sa+e, as $s$a&&' pertainin+ to t*e parti($&ar o,,i(er or a+ent, an s$(* apparent po-ers as t*e (orporation *as (a$se persons ea&in+ -it* t*e o,,i(er or a+ent to %e&ieve t*at it *as (on,erre .1 0 3$rt*er)ore, t*e Co$rt *as a&so re(o+ni.e t*e r$&e t*at 0persons ea&in+ -it* an ass$)e a+ent, -*et*er t*e ass$)e a+en(' %e a +enera& or spe(ia& one, are %o$n at t*eir peri&, i, t*e' -o$& *o& t*e prin(ipa& &ia%&e, to as(ertain not on&' t*e ,a(t o, a+en(' %$t a&so t*e nat$re an e2tent o, a$t*orit', an in (ase eit*er is (ontrovert, t*e %$r en o, proo, is $pon t*e) to esta%&is* it 4Harr' 5ee&er vs. Ro ri+$e., 6 P*i&. 789.0 Un&ess $&' a$t*ori.e , a treas$rer, -*ose po-ers are &i)ite , (annot %in t*e (orporation in a sa&e o, its assets. In t*e (ase at %ar, Respon ent Motori(* (ate+ori(a&&' enies t*at it ever a$t*ori.e Nenita Gr$en%er+, its treas$rer, to se&& t*e s$%/e(t par(e& o, &an . Conse:$ent&', petitioner *a t*e %$r en o, provin+ t*at Nenita Gr$en%er+ -as in ,a(t a$t*ori.e to represent an %in Motori(* in t*e transa(tion. Petitioner ,ai&e to is(*ar+e t*is %$r en. Its o,,er o, evi en(e %e,ore t*e tria& (o$rt (ontaine no proo, o, s$(* a$t*orit'. It *as not s*o-n an' provision o, sai respon ent1s arti(&es o, in(orporation, %'&a-s or %oar reso&$tion to prove t*at Nenita Gr$en%er+ possesse s$(* po-er. T*at Nenita Gr$en%er+ is t*e treas$rer o, Motori(* oes not ,ree petitioner ,ro) t*e responsi%i&it' o, as(ertainin+ t*e e2tent o, *er a$t*orit' to represent t*e (orporation. Petitioner (annot ass$)e t*at s*e, %' virt$e o, *er position, -as a$t*ori.e to se&& t*e propert' o, t*e (orporation. Se&&in+ is o%vio$s&' ,orei+n to a (orporate treas$rer1s ,$n(tion, -*i(* +enera&&' *as %een es(ri%e as 0to re(eive an ;eep t*e ,$n s o, t*e (orporation an to is%$rse t*e) in a((or an(e -it* t*e a$t*orit' +iven *i) %' t*e %oar or t*e proper&' a$t*ori.e o,,i(ers.0 Neit*er

-as s$(* rea& estate sa&e s*o-n to %e a nor)a& %$siness a(tivit' o, Motori(*. T*e pri)ar' p$rpose o, Motori(* is )ar;etin+, istri%$tion, e2port an i)port in re&ation to a +enera& )er(*an isin+ %$siness. Un)ista;a%&', its treas$rer is not (&oa;e -it* a(t$a& or apparent a$t*orit' to %$' or se&& rea& propert', an a(tivit' -*i(* ,a&&s -a' %e'on t*e s(ope o, *er +enera& a$t*orit'. 2. ID.% ID.% A CONTRACT T&AT IS CONSIDERED INE)ISTENT AND VOID FRO( T&E BEGINNING IS NOT SUSCEPTIBLE TO RATIFICATION .# As a +enera& r$&e, t*e a(ts o, (orporate o,,i(ers -it*in t*e s(ope o, t*eir a$t*orit' are %in in+ on t*e (orporation. B$t -*en t*ese o,,i(ers e2(ee t*eir a$t*orit', t*eir a(tions 0(annot %in t*e (orporation, $n&ess it *as rati,ie s$(* a(ts or is estoppe ,ro) is(&ai)in+ t*e).0 In t*is (ase, t*ere is a (&ear a%sen(e o, proo, t*at Motori(* ever a$t*ori.e Nenita Gr$en%er+, or )a e it appear to an' t*ir person t*at s*e *a t*e a$t*orit', to se&& its &an or to re(eive t*e earnest )one'. Neit*er -as t*ere an' proo, t*at Motori(* rati,ie , e2press&' or i)p&ie &', t*e (ontra(t. Petitioner rests its ar+$)ent on t*e re(eipt -*i(*, *o-ever, oes not prove t*e ,a(t o, rati,i(ation. T*e o($)ent is a *an -ritten one, not a (orporate re(eipt, an it %ears on&' Nenita Gr$en%er+1s si+nat$re. Certain&', t*is o($)ent a&one oes not prove t*at *er a(ts -ere a$t*ori.e or rati,ie %' Motori(*. Arti(&e 7<7= o, t*e Civi& Co e &ists t*e re:$isites o, a va&i an per,e(te (ontra(t> 0479 (onsent o, t*e (ontra(tin+ parties? 4@9 o%/e(t (ertain -*i(* is t*e s$%/e(t )atter o, t*e (ontra(t? 4<9 (a$se o, t*e o%&i+ation -*i(* is esta%&is*e .0 As ,o$n %' t*e tria& (o$rt an a,,ir)e %' t*e Co$rt o, Appea&s, t*ere is no evi en(e t*at Gr$en%er+ -as a$t*ori.e to enter into t*e (ontra(t o, sa&e, or t*at t*e sai (ontra(t -as rati,ie %' Motori(*. T*is ,a(t$a& ,in in+ o, t*e t-o (o$rts is %in in+ on t*is Co$rt. As t*e (onsent o, t*e se&&er -as not o%taine , no (ontra(t to %in t*e o%&i+or -as per,e(te . T*ere,ore, t*ere (an %e no va&i (ontra(t o, sa&e %et-een petitioner an Motori(*. Be(a$se Motori(* *a never +iven a -ritten a$t*ori.ation to Respon ent Gr$en%er+ to se&& its par(e& o, &an , -e *o& t*at t*e 3e%r$ar' 76, 78=8 A+ree)ent entere into %' t*e &atter -it* petitioner is voi $n er Arti(&e 7=A6 o, t*e Civi& Co e. Bein+ ine2istent an voi ,ro) t*e %e+innin+, sai (ontra(t (annot %e rati,ie . *. CO((ERCIAL LA$% CORPORATION CODE% PIERCING T&E CORPORATE VEIL IS NOT JUSTIFIED IN CASE AT BAR . # Be stress t*at t*e (orporate ,i(tion s*o$& %e set asi e -*en it %e(o)es a s*ie& a+ainst &ia%i&it' ,or ,ra$ , i&&e+a&it' or ine:$it' (o))itte on t*ir persons. T*e :$estion o, pier(in+ t*e vei& o, (orporate ,i(tion is essentia&&', t*en, )atter o, proo,. In t*e present (ase, *o-ever, t*e Co$rts ,in s no reason to pier(e t*e (orporate vei& o, Respon ent Motori(*. Petitioner $tter&' ,ai&e to esta%&is* t*at sai (orporation -as ,or)e , or t*at it is operate , ,or t*e p$rpose o, s*ie& in+ an' a&&e+e ,ra$ $&ent or i&&e+a& a(tivities o, its o,,i(ers or sto(;*o& ers? or t*at t*e sai vei& -as $se to (on(ea& ,ra$ , i&&e+a&it' or ine:$it' at t*e e2pense o, t*ir persons &i;e petitioner. 4. ID.% ID.% PRIVATE RESPONDENT CORPORATION IS NOT A CLOSE CORPORATION AS DEFINED UNDER SECTION 9+ OF T&E CORPORATION CODE. # T*e arti(&es o, in(orporation o, Motori(* Sa&es Corporation oes not (ontain an' provision statin+ t*at 479 t*e n$)%er o, sto(;*o& ers s*a&& not e2(ee @C, or 4@9 a

pree)ption o, s*ares is restri(te in ,avor o, an' sto(;*o& er or o, t*e (orporation, or 4<9 &istin+ its sto(;s in an' sto(; e2(*an+e or )a;in+ a p$%&i( o,,erin+ o, s$(* sto(;s is pro*i%ite . 3ro) its arti(&es, it is (&ear t*at Respon ent Motori(* is not a (&ose (orporation. Motori(* oes not %e(o)e one eit*er, /$st %e(a$se Spo$ses Re'na& o an Nenita Gr$en%er+ o-ne 88.=DDE o, its s$%s(ri%e (apita& sto(;. T*e 0F)Gere o-ners*ip %' a sin+&e sto(;*o& er or %' anot*er (orporation o, a&& or near&' a&& o, t*e (apita& sto(; o, a (orporation is not o, itse&, s$,,i(ient +ro$n ,or isre+ar in+ t*e separate (orporate persona&ities.0 So, too, a narro- istri%$tion o, o-ners*ip oes not, %' itse&,, )a;e a (&ose (orporation. 5. CIVIL LA$, DA(AGES% A$ARD OF ATTORNE#'S FEES IS NOT JUSTIFIED IN CASE AT BAR% PETITIONER $AS A VICTI( OF ITS O$N OFFICERS NEGLIGENCE IN ENTERING INTO A CONTRACT $IT& AN UNAUT&ORI,ED OFFICER OF ANOT&ER CORPORATION . # Be s$stain t*e ,in in+s o, %ot* t*e tria& an t*e appe&&ate (o$rts t*at t*e ,ore+oin+ a&&e+ations &a(; ,a(t$a& %ases. Hen(e, an a-ar o, a)a+es or attorne'1s ,ees (annot %e /$sti,ie . T*e a)o$nt pai as 0earnest )one'0 -as not proven to *ave re o$n e to t*e %ene,it o, Respon ent Motori(*. Petitioner (&ai)s t*at sai a)o$nt -as eposite to t*e a((o$nt o, Respon ent Motori(*, %e(a$se 0it -as eposite -it* t*e a((o$nt o, Aren Co))er(ia& (Ho Motori(* Sa&es Corporation.0 Respon ent Gr$en%er+, *o-ever, isp$tes t*e a&&e+ations o, petitioner. In an' event, Gr$en%er+ o,,ere to ret$rn t*e a)o$nt to petitioner 0. . . sin(e t*e sa&e i not p$s* t*ro$+*.0 Moreover, -e note t*at An res Co is not a neop*'te in t*e -or& o, (orporate %$siness. He *as %een t*e presi ent o, Petitioner Corporation ,or )ore t*an ten 'ears an *as a&so serve as (*ie, e2e($tive o, t-o ot*er (orporate entities. Co (annot ,ei+n i+noran(e o, t*e s(ope o, t*e a$t*orit' o, a (orporate treas$rer s$(* as Gr$en%er+. Neit*er (an *e %e o%&ivio$s to *is $t' to as(ertain t*e s(ope o, Gr$en%er+1s a$t*ori.ation to enter into a (ontra(t to se&& a par(e& o, &an %e&on+in+ to Motori(*. In ee , petitioner1s (&ai) o, ,ra$ an %a ,ait* is $ns$%stantiate an ,ai&s to pers$a e t*e Co$rt. In $%ita%&', petitioner appears to %e t*e vi(ti) o, its o-n o,,i(er1s ne+&i+en(e in enterin+ into a (ontra(t -it* an pa'in+ an $na$t*ori.e o,,i(er o, anot*er (orporation. DECISION PANGANIBAN, J pMa' a (orporate treas$rer, %' *erse&, an -it*o$t an' a$t*ori.ation ,ro) t*e %oar o, ire(tors, va&i &' se&& a par(e& o, &an o-ne %' t*e (orporationI Ma' t*e vei& o, (orporate ,i(tion %e pier(e on t*e )ere +ro$n t*at a&)ost a&& o, t*e s*ares o, sto(; o, t*e (orporation are o-ne %' sai treas$rer an *er *$s%an I T.e C/0e T*ese :$estions are ans-ere in t*e ne+ative %' t*is Co$rt in reso&vin+ t*e Petition ,or Revie- on Certiorari %e,ore $s, assai&in+ t*e Mar(* 7=, 788A De(ision o, t*e Co$rt o, Appea&s in CA GR CV No. 6D=C7 -*i(*, in t$rn, )o i,ie t*e !$&' 7=, 7886 De(ision o, t*e Re+iona& Tria& Co$rt o, Ma;ati, Metro Mani&a, Bran(* D< < in Civi& Case No. =8J

<K77. T*e RTC is)isse %ot* t*e Co)p&aint an t*e Co$nter(&ai) ,i&e %' t*e parties. On t*e ot*er *an , t*e Co$rt o, Appea&s r$&e > 0BHERE3ORE, pre)ises (onsi ere , t*e appea&e e(ision is A33IRMED BITH MODI3ICATION or erin+ e,en antJappe&&ee Nenita Lee Gr$en%er+ to RE3UND or ret$rn to p&ainti,,Jappe&&ant t*e o-npa')ent o, P7CC,CCC.CC -*i(* s*e re(eive ,ro) p&ainti,,Jappe&&ant. T*ere is no prono$n(e)ent as to (osts.0 T*e petition a&so (*a&&en+es t*e !$ne 7C, 788A CA Reso&$tion en'in+ re(onsi eration. T.e F/1t0 T*e ,a(ts as ,o$n %' t*e Co$rt o, Appea&s are as ,o&&o-s> 0P&ainti,,Jappe&&ant San !$an Str$(t$ra& an Stee& 3a%ri(ators, In(.1s a)en e (o)p&aint a&&e+e t*at on 76 3e%r$ar' 78=8, p&ainti,,Jappe&&ant entere into an a+ree)ent -it* e,en antJappe&&ee Motori(* Sa&es Corporation ,or t*e trans,er to it o, a par(e& o, &an i enti,ie as Lot <C, B&o(; 7 o, t*e A(ropo&is Greens S$% ivision &o(ate in t*e Distri(t o, M$rp*', L$e.on Cit', Metro Mani&a, (ontainin+ an area o, 3o$r H$n re 3o$rteen 46769 s:$are )eters, (overe %' TCT No. 4<D@8C89 @=AD> t*at as stip$&ate in t*e A+ree)ent o, 76 3e%r$ar' 78=8, p&ainti,,Jappe&&ant pai t*e o-npa')ent in t*e s$) o, One H$n re T*o$san 4P7CC,CCC.CC9 Pesos, t*e %a&an(e to %e pai on or %e,ore Mar(* @, 78=8? t*at on Mar(* 7, 78=8, Mr. An res T. Co, presi ent o, p&ainti,,Jappe&&ant (orporation, -rote a &etter to e,en antJappe&&ee Motori(* Sa&es Corporation re:$estin+ ,or a (o)p$tation o, t*e %a&an(e to %e pai , t*at sai &etter -as (o$rse t*ro$+* e,en antJappe&&ee1s %ro;er, Lin a A $(a, -*o -rote t*e (o)p$tation o, t*e %a&an(e> t*at on Mar(* @, 78=8, p&ainti,,Jappe&&ant -as rea ' -it* t*e a)o$nt (orrespon in+ to t*e %a&an(e, (overe %' Metro%an; Cas*ier1s C*e(; No. CC6@@<, pa'a%&e to e,en antJ appe&&ee Motori(* Sa&es Corporation? t*at p&ainti,,Jappe&&ant an e,en antJappe&&ee Motori(* Sa&es Corporation -ere s$ppose to )eet in t*e o,,i(e o, p&ainti,,Jappe&&ant %$t e,en antJappe&&ee1s treas$rer, Nenita Lee Gr$en%er+, i not appear? t*at e,en antJ appe&&ee Motori(* Sa&es Corporation espite repeate e)an s an in $tter isre+ar o, its (o))it)ents *a re,$se to e2e($te t*e Trans,er o, Ri+*tsHDee o, Assi+n)ent -*i(* is ne(essar' to trans,er t*e (erti,i(ate o, tit&e? t*at e,en ant ACL Deve&op)ent Corp. is i)p&ea e as a ne(essar' part' sin(e Trans,er Certi,i(ate o, Tit&e No. 4<D@8C89 @=AD is sti&& in t*e na)e o, sai e,en ant? -*i&e e,en ant !NM Rea&t' M Deve&op)ent Corp. is &i;e-ise i)p&ea e as a ne(essar' part' in vie- o, t*e ,a(t t*at it is t*e trans,eror o, ri+*t in ,avor o, e,en antJappe&&ee Motori(* Sa&es Corporation? t*at on Apri& D, 78=8, e,en ant ACL Deve&op)ent Corporation an Motori(* Sa&es Corporation entere into a Dee o, A%so&$te Sa&e -*ere%' t*e ,or)er trans,erre to t*e &atter t*e s$%/e(t propert'? t*at %' reason o, sai trans,er, t*e Re+istr' o, Dee s o, L$e.on Cit' iss$e a ne- tit&e in t*e na)e o, Motori(* Sa&es Corporation, represente %' e,en antJappe&&ee Nenita Lee Gr$en%er+ an Re'na& o L Gr$en%er+, $n er Trans,er Certi,i(ate o, Tit&e No. <KA7? t*at as a res$&t o, e,en antsJappe&&ees Nenita Lee Gr$en%er+ an Motori(* Sa&es Corporation1s %a ,ait* in re,$sin+ to e2e($te a ,or)a& Trans,er o, Ri+*tsHDee o, Assi+n)ent, p&ainti,,Jappe&&ant s$,,ere )ora& an no)ina& a)a+es -*i(* )a' %e

assesse a+ainst e,en antsJappe&&ees in t*e s$) o, 3ive H$n re T*o$san 4KCC,CCC.CC9 Pesos? t*at as a res$&t o, e,en antsJappe&&ees Nenita Lee Gr$en%er+ an Motori(* Sa&es Corporation1s $n/$sti,ie an $n-arrante ,ai&$re to e2e($te t*e re:$ire Trans,er o, Ri+*tsHDee o, Assi+n)ent or ,or)a& ee o, sa&e in ,avor o, p&ainti,,Jappe&&ant, e,en antsJappe&&ees s*o$& %e assesse e2e)p&ar' a)a+es in t*e s$) o, One H$n re T*o$san 4P7CC,CCC.CC9 Pesos> t*at %' reason o, e,en antsJappe&&ees1 %a ,ait* in re,$sin+ to e2e($te a Trans,er o, Ri+*tsHDee o, Assi+n)ent in ,avor o, p&ainti,,J appe&&ant, t*e &atter &ost t*e opport$nit' to (onstr$(t a resi entia& %$i& in+ in t*e s$) o, One H$n re T*o$san 4P7CC,CCC.CC9 Pesos? an t*at as a (onse:$en(e o, e,en antsJ appe&&ees Nenita Lee Gr$en%er+ an Motori(* Sa&es Corporation1s %a ,ait* in re,$sin+ to e2e($te a ee o, sa&e in ,avor o, p&ainti,,Jappe&&ant, it *as %een (onstraine to o%tain t*e servi(es o, (o$nse& at an a+ree ,ee o, One H$n re T*o$san 4P7CC,CCC.CC9 Pesos p&$s appearan(e ,ee ,or ever' appearan(e in (o$rt *earin+s. 0In its ans-er, e,en antsJappe&&ees Motori(* Sa&es Corporation an Nenita Lee Gr$en%er+ interpose as a,,ir)ative e,ense t*at t*e Presi ent an C*air)an o, Motori(* i not si+n t*e a+ree)ent a verte to in par. < o, t*e a)en e (o)p&aint? t*at Mrs. Gr$en%er+1s si+nat$re on t*e a+ree)ent 4re,> par. < o, A)en e Co)p&aint9 is ina e:$ate to %in Motori(*. T*e ot*er si+nat$re, t*at o, Mr. Re'na& o Gr$en%er+, Presi ent an C*air)an o, Motori(*, is re:$ire > t*at p&ainti,, ;ne- t*is ,ro) t*e ver' %e+innin+ as it -as presente a (op' o, t*e Trans,er o, Ri+*ts 4Anne2 B o, a)en e (o)p&aint9 at t*e ti)e t*e A+ree)ent 4Anne2 B o, a)en e (o)p&aint9 -as si+ne ? t*at p&ainti,,Jappe&&ant itse&, ra,te t*e A+ree)ent an insiste t*at Mrs. Gr$en%er+ a((ept t*e P7CC,CCC.CC as earnest )one'? t*at +rantin+, -it*o$t a )ittin+, t*e en,or(ea%i&it' o, t*e a+ree)ent, p&ainti,,Jappe&&ant nonet*e&ess ,ai&e to pa' in &e+a& ten er -it*in t*e stip$&ate perio 4$p to Mar(* @, 78=89? t*at it -as t*e $n erstan in+ %et-een Mrs. Gr$en%er+ an p&ainti,,Jappe&&ant t*at t*e Trans,er o, Ri+*tsHDee o, Assi+n)ent -i&& %e si+ne on&' $pon re(eipt o, (as* pa')ent? t*$s t*e' a+ree t*at i, t*e pa')ent %e in (*e(;, t*e' -i&& )eet at a %an; esi+nate %' p&ainti,,Jappe&&ant -*ere t*e' -i&& en(as* t*e (*e(; an si+n t*e Trans,er o, Ri+*tsHDee . Ho-ever, p&ainti,,Jappe&&ant in,or)e Mrs. Gr$en%er+ o, t*e a&&e+e avai&a%i&it' o, t*e (*e(;, %' p*one, on&' a,ter %an;in+ *o$rs. 0On t*e %asis o, t*e evi en(e, t*e (o$rt a :$o ren ere t*e /$ +)ent appea&e ,ro)F,G is)issin+ p&ainti,,Jappe&&ant1s (o)p&aint, r$&in+ t*at> 1T*e iss$e to %e reso&ve is> -*et*er p&ainti,, *a t*e ri+*t to (o)pe& e,en ants to e2e($te a ee o, a%so&$te sa&e in a((or an(e -it* t*e a+ree)ent o, 3e%r$ar' 76, 78=8> an i, so, -*et*er p&ainti,, is entit&e to a)a+es. 1As to t*e ,irst :$estion, t*ere is no evi en(e to s*o- t*at e,en ant Nenita Lee Gr$en%er+ -as in ee a$t*ori.e %' e,en ant (orporation. Motori(* Sa&es to ispose o, t*at propert' (overe %' T.C.T. No. 4<D@8C89 @=AD. Sin(e t*e propert' is (&ear&' o-ne %' t*e (orporation, Motori(* Sa&es, t*en its isposition s*o$& %e +overne %' t*e re:$ire)ent &ai o-n in Se(. 6C, o, t*e Corporation Co e o, t*e P*i&ippines, to -it> Se(. 6C. Sa&e or ot*er isposition o, assets. S$%/e(t to t*e provisions o, e2istin+ &a-s on i&&e+a& (o)%ination an )onopo&ies, a (orporation )a' %' a )a/orit' vote o, its

%oar o, ire(tors . . . se&&, &ease, e2(*an+e, )ort+a+e, p&e +e or ot*er-ise ispose o, a&& or s$%stantia&&' a&& o, its propert' an assets in(&$ in+ its +oo -i&& . . . -*en a$t*ori.e %' t*e vote o, t*e sto(;*o& ers representin+ at &east t-o t*ir 4@H<9 o, t*e o$tstan in+ (apita& sto(; . . . 1No s$(* vote -as o%taine %' e,en ant Nenita Lee Gr$en%er+ ,or t*at propose sa&eF?G neit*er -as t*ere evi en(e to s*o- t*at t*e s$ppose transa(tion -as rati,ie %' t*e (orporation. P&ainti,, s*o$& *ave %een on t*e &oo; o$t $n er t*ese (ir($)stan(es. More so, p&ainti,, *i)se&, Fo-nsG severa& (orporations 4tsn ate A$+$st 7D, 788<, p. <9 -*i(* )a;es *i) ;no-&e +ea%&e on (orporation )atters. 1Re+ar in+ t*e :$estion o, a)a+es, t*e Co$rt &i;e-ise, oes not ,in s$%stantia& evi en(e to *o& e,en ant Nenita Lee Gr$en%er+ &ia%&e (onsi erin+ t*at s*e i not in an'-a' )isrepresent *erse&, to %e a$t*ori.e %' t*e (orporation to se&& t*e propert' to p&ainti,, 4tsn ate Septe)%er @A, 7887, p. =9. 1In t*e &i+*t o, t*e ,ore+oin+, t*e Co$rt *ere%' ren ers /$ +)ent DISMISSING t*e (o)p&aint at instan(e ,or &a(; o, )erit. 1De,en ants1 (o$nter(&ai) is a&so DISMISSED ,or &a(; o, %asis.1 4De(ision, pp. AJ=? Ro&&o, pp. <6J<K90 3or (&arit', t*e A+ree)ent ate 3e%r$ar' 76, 78=8 is repro $(e *ere$n er> 0AGREEMENT 5NOB ALL MEN B" THESE PRESENTS> T*is A+ree)ent, )a e an entere into %' an %et-een> MOTORICH SALES CORPORATION, a (orporation $&' or+ani.e an e2istin+ $n er an %' virt$e o, P*i&ippine La-s, -it* prin(ipa& o,,i(e a ress at KK7C So$t* S$per HiJ -a' (or. Ba& era)a St., Pio e& Pi&ar, Ma;ati, Metro Mani&a, represente *erein %' its Treas$rer, NENITA LEE GRUENBERG, *ereina,ter re,erre to as t*e TRANS3EROR? # an # SAN !UAN STRUCTURAL M STEEL 3ABRICATORS, a (orporation $&' or+ani.e an e2istin+ $n er an %' virt$e o, t*e &a-s o, t*e P*i&ippines, -it* prin(ipa& o,,i(e a ress at S$)$&on+ Hi+*-a', Barrio Ma)%$n+an, Antipo&o, Ri.a&, represente *erein %' its Presi ent, ANDRES T. CO, *ereina,ter re,erre to as t*e TRANS3EREE. BITNESSETH, T*at> BHEREAS, t*e TRANS3EROR is t*e o-ner o, a par(e& o, &an i enti,ie as Lot <C B&o(; 7 o, t*e ACROPOLIS GREENS SUBDIVISION &o(ate at t*e Distri(t o, M$rp*', L$e.on Cit', Metro Mani&a, (ontainin+ an area o, 3OUR HUNDRED 3OURTEEN 46769 SLUARE METERS, (overe %' a TRANS3ER O3 RIGHTS %et-een !NM Rea&t' M Dev. Corp. as t*e Trans,eror an Motori(* Sa&es Corp. as t*e Trans,eree?

NOB, THERE3ORE, ,or an in (onsi eration o, t*e ,ore+oin+ pre)ises, t*e parties *ave a+ree as ,o&&o-s> 7. T*at t*e p$r(*ase pri(e s*a&& %e at 3IVE THOUSAND TBO HUNDRED PESOS 4PK,@CC.CC9 per s:$are )eter? s$%/e(t to t*e ,o&&o-in+ ter)s> a. Earnest )one' a)o$ntin+ to ONE HUNDRED THOUSAND PESOS 4P7CC,CCC.CC9, -i&& %e pai $pon t*e e2e($tion o, t*is a+ree)ent an s*a&& ,or) part o, t*e tota& p$r(*ase pri(e? LLp*i& %. Ba&an(e s*a&& %e pa'a%&e on or %e,ore Mar(* @, 78=8? @. T*at t*e )ont*&' a)orti.ation ,or t*e )ont* o, 3e%r$ar' 78=8 s*a&& %e ,or t*e a((o$nt o, t*e Trans,eror? an t*at t*e )ont*&' a)orti.ation startin+ Mar(* @7, 78=8 s*a&& %e ,or t*e a((o$nt o, t*e Trans,eree? T*e trans,eror -arrants t*at *e Fsi(G is t*e &a-,$& o-ner o, t*e a%oveJ es(ri%e propert' an t*at t*ere FareG no e2istin+ &iens an Hor en($)%ran(es o, -*atsoever nat$re? In (ase o, ,ai&$re %' t*e Trans,eree to pa' t*e %a&an(e on t*e ate spe(i,ie on 7. 4%9, t*e earnest )one' s*a&& %e ,or,eite in ,avor o, t*e Trans,eror. T*at $pon ,$&& pa')ent o, t*e %a&an(e, t*e TRANS3EROR a+rees to e2e($te a TRANS3ER O3 RIGHTSHDEED O3 ASSIGNMENT in ,avor o, t*e TRANS3EREE. IN BITNESS BHEREO3, t*e parties *ave *ere$nto set t*eir *an s t*is 76t* a' o, 3e%r$ar', 78=8 at Green*i&&s, San !$an, Metro Mani&a, P*i&ippines. MOTORICH SALES SAN !UAN STRUCTURAL M CORPORATION STEEL 3ABRICATORS TRANS3EROR TRANS3EREE FSGDG FSGDG B'> NENITA LEE GRUENBERG B'> ANDRES T. CO Treas$rer Presi ent Si+ne in t*e presen(e o,> FSGDG FSGDG NNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNN0 In its re(o$rse %e,ore t*e Co$rt o, Appea&s, petitioner insiste > 07. Appe&&ant is entit&e to (o)pe& t*e appe&&ees to e2e($te a Dee o, A%so&$te Sa&e in a((or an(e -it* t*e A+ree)ent o, 3e%r$ar' 76, 78=8, @. P&ainti,, is entit&e to a)a+es.0 As state ear&ier, t*e Co$rt o, Appea&s e%$n;e petitioner1s ar+$)ents an a,,ir)e t*e De(ision o, t*e RTC -it* t*e )o i,i(ation t*at Respon ent Nenita Lee Gr$en%er+ -as or ere to re,$n P7CC,CCC to petitioner, t*e a)o$nt re)itte as 0 o-npa')ent0 or 0earnest )one'.0 Hen(e, t*is petition %e,ore $s.

T.e I002e0 Be,ore t*is Co$rt, petitioner raises t*e ,o&&o-in+ iss$es> 0I. B*et*er or not t*e o(trine o, pier(in+ t*e vei& o, (orporate ,i(tion is app&i(a%&e in t*e instant (ase 0II. B*et*er or not t*e appe&&ate (o$rt )a' (onsi er )atters -*i(* t*e parties ,ai&e to raise in t*e &o-er (o$rt 0III. B*et*er or not t*ere is a va&i an en,or(ea%&e (ontra(t %et-een t*e petitioner an t*e respon ent (orporation 0IV. B*et*er or not t*e Co$rt o, Appea&s erre in *o& in+ t*at t*ere is a va&i (orre(tionHs$%stit$tion o, ans-er in t*e trans(ript o, steno+rap*i( noteFsG V. B*et*er or not respon ents are &ia%&e ,or a)a+es an attorne'1s ,ees.0 T*e Co$rt s'nt*esi.e t*e ,ore+oin+ an -i&& t*$s is($ss t*e) seriati) as ,o&&o-s> 7. Bas t*ere a va&i (ontra(t o, sa&e %et-een petitioner an Motori(*I @. Ma' t*e o(trine o, pier(in+ t*e vei& o, (orporate ,i(tion %e app&ie to Motori(*I <. Is t*e a&&e+e a&teration o, Gr$en%er+1s testi)on' as re(or e in t*e trans(ript o, steno+rap*i( notes )ateria& to t*e isposition o, t*is (aseI 6. Are respon ents &ia%&e ,or a)a+es an attorne'1s ,eesI T.e Co2!t'0 R23456 T.e pet4t4o5 40 7e8o47 o9 me!4t. F4!0t I002e- V/3474t: o9 A6!eeme5t Petitioner San !$an Str$(t$ra& an Stee& 3a%ri(ators, In(. a&&e+es t*at on 3e%r$ar' 76, 78=8, it entere t*ro$+* its presi ent, An res Co, into t*e isp$te A+ree)ent -it* Respon ent Motori(* Sa&es Corporation, -*i(* -as in t$rn a&&e+e &' represente %' its treas$rer, Nenita Lee Gr$en%er+. Petitioner insists t*at 0F-G*en Gr$en%er+ an Co a,,i2e t*eir si+nat$res on t*e (ontra(t t*e' %ot* (onsente to %e %o$n %' t*e ter)s t*ereo,.0 Er+o, petitioner (onten s t*at t*e (ontra(t is %in in+ on t*e t-o (orporations. Be o not a+ree. Tr$e, Gr$en%er+ an Co si+ne on 3e%r$ar' 76, 78=8, t*e A+ree)ent, a((or in+ to -*i(* a &ot o-ne %' Motori(* Sa&es Corporation -as p$rporte &' so& . S$(* (ontra(t, *o-ever, (annot %in Motori(*, %e(a$se it never a$t*ori.e or rati,ie s$(* sa&e. A (orporation is a /$ri i(a& person separate an istin(t ,ro) its sto(;*o& ers or )e)%ers. A((or in+&', t*e propert' o, t*e (orporation is not t*e propert' o, its sto(;*o& ers or )e)%ers an )a' not %e so& %' t*e sto(;*o& ers or )e)%ers -it*o$t e2press a$t*ori.ation ,ro) t*e (orporation1s %oar o, ire(tors. Se(tion @< o, BP D=, ot*er-ise ;no-n as t*e Corporation Co e o, t*e P*i&ippines, provi es> 0SEC. @<. T*e Boar o, Dire(tors or Tr$stees. # Un&ess ot*er-ise provi e in t*is Co e, t*e (orporate po-ers o, a&& (orporations ,or)e $n er t*is Co e s*a&& %e e2er(ise , a&& %$siness (on $(te an a&& propert' o, s$(* (orporations (ontro&&e an *e& %' t*e %oar o, ire(tors or tr$stees to %e e&e(te ,ro) a)on+ t*e *o& ers o, sto(;s, or -*ere

t*ere is no sto(;, ,ro) a)on+ t*e )e)%ers o, t*e (orporation, -*o s*a&& *o& o,,i(e ,or one 479 'ear an $nti& t*eir s$((essors are e&e(te an :$a&i,ie .0 In $%ita%&', a (orporation )a' a(t on&' t*ro$+* its %oar o, ire(tors or, -*en a$t*ori.e eit*er %' its %'&a-s or %' its %oar reso&$tion, t*ro$+* its o,,i(ers or a+ents in t*e nor)a& (o$rse o, %$siness. T*e +enera& prin(ip&es o, a+en(' +overn t*e re&ation %et-een t*e (orporation an its o,,i(ers or a+ents, s$%/e(t to t*e arti(&es o, in(orporation, %'&a-s, or re&evant provisions o, &a-. T*$s, t*is Co$rt *as *e& t*at 01a (orporate o,,i(er or a+ent )a' represent an %in t*e (orporation in transa(tions -it* t*ir persons to t*e e2tent t*at t*e a$t*orit' to o so *as %een (on,erre $pon *i), an t*is in(&$ es po-ers -*i(* *ave %een intentiona&&' (on,erre , an a&so s$(* po-ers as, in t*e $s$a& (o$rse o, t*e parti($&ar %$siness, are in(i enta& to, or )a' %e i)p&ie ,ro), t*e po-ers intentiona&&' (on,erre , po-ers a e %' ($sto) an $sa+e, as $s$a&&' pertainin+ to t*e parti($&ar o,,i(er or a+ent, an s$(* apparent po-ers as t*e (orporation *as (a$se persons ea&in+ -it* t*e o,,i(er or a+ent to %e&ieve t*at it *as (on,erre .1 0 3$rt*er)ore, t*e Co$rt *as a&so re(o+ni.e t*e r$&e t*at 0persons ea&in+ -it* an ass$)e a+ent, -*et*er t*e ass$)e a+en(' %e a +enera& or spe(ia& one, are %o$n at t*eir peri&, i, t*e' -o$& *o& t*e prin(ipa& &ia%&e, to as(ertain not on&' t*e ,a(t o, a+en(' %$t a&so t*e nat$re an e2tent o, a$t*orit', an in (ase eit*er is (ontroverte , t*e %$r en o, proo, is $pon t*e) to esta%&is* it 4Harr' 5ee&er v. Ro ri+$e., 6 P*i&. 789.0 Un&ess $&' a$t*ori.e , a treas$rer, -*ose po-ers are &i)ite , (annot %in t*e (orporation in a sa&e o, its assets. In t*e (ase at %ar, Respon ent Motori(* (ate+ori(a&&' enies t*at it ever a$t*ori.e Nenita Gr$en%er+, its treas$rer, to se&& t*e s$%/e(t par(e& o, &an . Conse:$ent&', petitioner *a t*e %$r en o, provin+ t*at Nenita Gr$en%er+ -as in ,a(t a$t*ori.e to represent an %in Motori(* in t*e transa(tion. Petitioner ,ai&e to is(*ar+e t*is %$r en. Its o,,er o, evi en(e %e,ore t*e tria& (o$rt (ontaine no proo, o, s$(* a$t*orit'. It *as not s*o-n an' provision o, sai respon ent1s arti(&es o, in(orporation, %'&a-s or %oar reso&$tion to prove t*at Nenita Gr$en%er+ possesse s$(* po-er. T*at Nenita Gr$en%er+ is t*e treas$rer o, Motori(* oes not ,ree petitioner ,ro) t*e responsi%i&it' o, as(ertainin+ t*e e2tent o, *er a$t*orit' to represent t*e (orporation. Petitioner (annot ass$)e t*at s*e, %' virt$e o, *er position, -as a$t*ori.e to se&& t*e propert' o, t*e (orporation. Se&&in+ is o%vio$s&' ,orei+n to a (orporate treas$rer1s ,$n(tion, -*i(* +enera&&' *as %een es(ri%e as 0to re(eive an ;eep t*e ,$n s o, t*e (orporation an to is%$rse t*e) in a((or an(e -it* t*e a$t*orit' +iven *i) %' t*e %oar or t*e proper&' a$t*ori.e o,,i(ers.0 Neit*er -as s$(* rea& estate sa&e s*o-n to %e a nor)a& %$siness a(tivit' o, Motori(*. T*e pri)ar' p$rpose o, Motori(* is )ar;etin+, istri%$tion, e2port an i)port in re&ation to a +enera& )er(*an isin+ %$siness. Un)ista;a%&', its treas$rer is not (&oa;e -it* a(t$a& or apparent a$t*orit' to %$' or se&& rea& propert', an a(tivit' -*i(* ,a&&s -a' %e'on t*e s(ope o, *er +enera& a$t*orit'.

Arti(&es 7=A6 an 7=A= o, t*e Civi& Co e o, t*e P*i&ippines provi es> 0ART. 7=A6. B*en a sa&e o, a pie(e o, &an or an' interest t*erein is t*ro$+* an a+ent t*e a$t*orit' o, t*e &atter s*a&& %e in -ritin+? ot*er-ise, t*e sa&e s*a&& %e voi .0 0ART. 7=A=. Spe(ia& po-ers o, attorne' are ne(essar' in t*e ,o&&o-in+ (ase> 222 222 222 4K9 To enter an' (ontra(t %' -*i(* t*e o-ners*ip o, an i))ova%&e is trans)itte or a(:$ire eit*er +rat$ito$s&' or ,or a va&$a%&e (onsi eration? 222 222 222 Petitioner ,$rt*er (onten s t*at Respon ent Motori(* *as rati,ie sai (ontra(t o, sa&e %e(a$se o, its 0a((eptan(e o, %ene,its,0 as evi en(e %' t*e re(eipt iss$e %' Respon ent Gr$en%er+. Petitioner is (&$t(*in+ at stra-s. As a +enera& r$&e, t*e a(ts o, (orporate o,,i(ers -it*in t*e s(ope o, t*eir a$t*orit' are %in in+ on t*e (orporation. B$t -*en t*ese o,,i(ers e2(ee t*eir a$t*orit', t*eir a(tions 0(annot %in t*e (orporation, $n&ess it *as rati,ie s$(* a(ts or is estoppe ,ro) is(&ai)in+ t*e).0 In t*is (ase, t*ere is a (&ear a%sen(e o, proo, t*at Motori(* ever a$t*ori.e Nenita Gr$en%er+, or )a e it appear to an' t*ir person t*at s*e *a t*e a$t*orit', to se&& its &an or to re(eive t*e earnest )one'. Neit*er -as t*ere an' proo, t*at Motori(* rati,ie , e2press&' or i)p&ie &', t*e (ontra(t. Petitioner rests its ar+$)ent on t*e re(eipt -*i(*, *o-ever, oes not prove t*e ,a(t o, rati,i(ation. T*e o($)ent is a *an J-ritten one, not a (orporate re(eipt, an it %ears on&' Nenita Gr$en%er+1s si+nat$re. Certain&', t*is o($)ent a&one oes not prove t*at *er a(ts -ere a$t*ori.e or rati,ie %' Motori(*. Arti(&e 7<7= o, t*e Civi& Co e &ists t*e re:$isites o, a va&i an per,e(te (ontra(t> 0479 (onsent o, t*e (ontra(tin+ parties? 4@9 o%/e(t (ertain -*i(* is t*e s$%/e(t )atter o, t*e (ontra(t? 4<9 (a$se o, t*e o%&i+ation -*i(* is esta%&is*e .0 As ,o$n %' t*e tria& (o$rt an a,,ir)e %' t*e Co$rt o, Appea&s, t*ere is no evi en(e t*at Gr$en%er+ -as a$t*ori.e to enter into t*e (ontra(t o, sa&e, or t*at t*e sai (ontra(t -as rati,ie %' Motori(*. T*is ,a(t$a& ,in in+ o, t*e t-o (o$rts is %in in+ on t*is Co$rt. As t*e (onsent o, t*e se&&er -as not o%taine , no (ontra(t to %in t*e o%&i+or -as per,e(te . T*ere,ore, t*ere (an %e no va&i (ontra(t o, sa&e %et-een petitioner an Motori(*. Be(a$se Motori(* *a never +iven a -ritten a$t*ori.ation to Respon ent Gr$en%er+ to se&& its par(e& o, &an , -e *o& t*at t*e 3e%r$ar' 76, 78=8 A+ree)ent entere into %' t*e &atter -it* petitioner is voi $n er Arti(&e 7=A6 o, t*e Civi& Co e. Bein+ ine2istent an voi ,ro) t*e %e+innin+, sai (ontra(t (annot %e rati,ie .

Se1o57 I002e- P4e!1456 t.e Co!po!/te Ve43 Not J20t494e7 Petitioner a&so ar+$es t*at t*e vei& o, (orporate ,i(tion o, Motori(* s*o$& %e pier(e , %e(a$se t*e &atter is a (&ose (orporation. Sin(e 0Spo$ses Re'na& o L. Gr$en%er+ an Nenita R. Gr$en%er+ o-ne a&& or a&)ost a&& or 88.=DDE to %e a(($rate, o, t*e s$%s(ri%e (apita& sto(;0 o, Motori(*, petitioner ar+$es t*at Gr$en%er+ nee e no a$t*ori.ation ,ro) t*e %oar to enter into t*e s$%/e(t (ontra(t. It a s t*at, %ein+ so&e&' o-ne %' t*e Spo$ses Gr$en%er+ t*e (o)pan' (an %e treate as a (&ose (orporation -*i(* (an %e %o$n %' t*e a(ts o, its prin(ipa& sto(;*o& er -*o nee s no spe(i,i( a$t*orit'. T*e Co$rt is not pers$a e . 3irst, petitioner itse&, (on(e es *avin+ raise t*e iss$e %e&ate &', not *avin+ one so $rin+ t*e tria&, %$t on&' -*en it ,i&e its s$rJre/oin er %e,ore t*e Co$rt o, Appea&s. T*$s, t*is Co$rt (annot entertain sai iss$e at t*is &ate sta+e o, t*e pro(ee in+s. It is -e&&Jsett&e t*at points o, &a-, t*eories an ar+$)ents not %ro$+*t to t*e attention o, t*e tria& (o$rt nee not %e, an or inari&' -i&& not %e, (onsi ere %' a revie-in+ (o$rt, as t*e' (annot %e raise ,or t*e ,irst ti)e on appea&. A&&o-in+ petitioner to (*an+e *orses in )i strea), as it -ere, is to r$n ro$+*s*o over t*e %asi( prin(ip&es o, ,air p&a', /$sti(e an $e pro(ess. Se(on , even i, t*e a%oveJ)entione ar+$)ent -ere to %e a resse at t*is ti)e, t*e Co$rt sti&& ,in s no reason to $p*o& it. Tr$e, one o, t*e a vanta+es o, a (orporate ,or) o, %$siness or+ani.ation is t*e &i)itation o, an investor1s &ia%i&it' to t*e a)o$nt o, t*e invest)ent. T*is ,eat$re ,&o-s ,ro) t*e &e+a& t*eor' t*at a (orporate entit' is separate an istin(t ,ro) its sto(;*o& ers. Ho-ever, t*e stat$tori&' +rante privi&e+e o, a (orporate vei& )a' %e $se on&' ,or &e+iti)ate p$rposes. On e:$ita%&e (onsi erations, t*e vei& (an %e isre+ar e -*en it is $ti&i.e as a s*ie& to (o))it ,ra$ , i&&e+a&it' or ine:$it'? e,eat p$%&i( (onvenien(e? (on,$se &e+iti)ate iss$es? or serve as a )ere a&ter e+o or %$siness (on $it o, a person or an instr$)enta&it', a+en(' or a /$n(t o, anot*er (orporation. T*$s, t*e Co$rt *as (onsistent&' r$&e t*at 0F-G*en t*e ,i(tion is $se as a )eans o, perpetratin+ a ,ra$ or an i&&e+a& a(t or as a ve*i(&e ,or t*e evasion o, an e2istin+ o%&i+ation, t*e (ir($)vention o, stat$tes, t*e a(*ieve)ent or per,e(tion o, a )onopo&' or +enera&&' t*e perpetration o, ;naver' or (ri)e, t*e vei& -it* -*i(* t*e &a- (overs an iso&ates t*e (orporation ,ro) t*e )e)%ers, or sto(;*o& ers -*o (o)pose it -i&& %e &i,te to a&&o- ,or its (onsi eration )ere&' as an a++re+ation o, in ivi $a&s.0 Be stress t*at t*e (orporate ,i(tion s*o$& %e set asi e -*en it %e(o)es a s*ie& a+ainst &ia%i&it' ,or ,ra$ , i&&e+a&it' or ine:$it' (o))itte on t*ir persons. T*e :$estion o, pier(in+ t*e vei& o, (orporate ,i(tion is essentia&&', t*en, a )atter o, proo,. In t*e present (ase, *o-ever, t*e Co$rt ,in s no reason to pier(e t*e (orporate vei& o, Respon ent Motori(*. Petitioner $tter&' ,ai&e to esta%&is* t*at sai (orporation -as ,or)e , or t*at it is operate , ,or t*e p$rpose o, s*ie& in+ an' a&&e+e ,ra$ $&ent or i&&e+a& a(tivities o, its o,,i(ers or sto(;*o& ers? or t*at t*e sai vei& -as $se to (on(ea& ,ra$ , i&&e+a&it' or ine:$it' at t*e e2pense o, t*ir persons &i;e petitioner.

Petitioner (&ai)s t*at Motori(* is a (&ose (orporation. Be r$&e t*at it is not. Se(tion 8D o, t*e Corporation Co e e,ines a (&ose (orporation as ,o&&o-s> 0SEC. 8D. De,inition an App&i(a%i&it' o, Tit&e. # A (&ose (orporation, -it*in t*e )eanin+ o, t*is Co e, is one -*ose arti(&es o, in(orporation provi e t*at> 479 A&& o, t*e (orporation1s iss$e sto(; o, a&& (&asses, e2(&$sive o, treas$r' s*ares, s*a&& %e *e& o, re(or %' not )ore t*an a spe(i,ie n$)%er o, persons, not e2(ee in+ t-ent' 4@C9? 4@9 A&& o, t*e iss$e sto(; o, a&& (&asses s*a&& %e s$%/e(t to one or )ore spe(i,ie restri(tions on trans,er per)itte %' t*is Tit&e? an 4<9 T*e (orporation s*a&& not &ist in an' sto(; e2(*an+e or )a;e an' p$%&i( o,,erin+ o, an' o, its sto(; o, an' (&ass. Not-it*stan in+ t*e ,ore+oin+, a (orporation s*a&& %e ee)e not a (&ose (orporation -*en at &east t-oJ t*ir s 4@H<9 o, its votin+ sto(; or votin+ ri+*ts is o-ne or (ontro&&e %' anot*er (orporation -*i(* is not a (&ose (orporation -it*in t*e )eanin+ o, t*is Co e . . .0 T*e arti(&es o, in(orporation o, Motori(* Sa&es Corporation oes not (ontain an' provision statin+ t*at 479 t*e n$)%er o, sto(;*o& ers s*a&& not e2(ee @C, or 4@9 a pree)ption o, s*ares is restri(te in ,avor o, an' sto(;*o& er or o, t*e (orporation, or 4<9 &istin+ its sto(;s in an' sto(; e2(*an+e or )a;in+ a p$%&i( o,,erin+ o, s$(* sto(;s is pro*i%ite . 3ro) its arti(&es, it is (&ear t*at Respon ent Motori(* is not a (&ose (orporation. Motori(* oes not %e(o)e one eit*er, /$st %e(a$se Spo$ses Re'na& o an Nenita Gr$en%er+ o-ne 88.=DDE o, its s$%s(ri%e (apita& sto(;. T*e F)Gere o-ners*ip %' a sin+&e sto(;*o& er or %' anot*er (orporation o, a&& or near&' a&& o, t*e (apita& sto(; o, a (orporation is not o, itse&, s$,,i(ient +ro$n ,or isre+ar in+ t*e separate (orporate persona&ities.0 So, too, a narro- istri%$tion o, o-ners*ip oes not, %' itse&,, )a;e a (&ose (orporation. Petitioner (ites Man$e& R. D$&a' Enterprises, In(. v. Co$rt o, Appea&s -*erein t*e Co$rt r$&e t*at 0. . . petitioner (orporation is (&assi,ie as a (&ose (orporation an , (onse:$ent&', a %oar reso&$tion a$t*ori.in+ t*e sa&e or )ort+a+e o, t*e s$%/e(t propert' is not ne(essar' to %in t*e (orporation ,or t*e a(tion o, its presi ent.0 B$t t*e ,a(t$a& )i&ie$ in D$&a' is not on a&& ,o$rs -it* t*e present (ase. In D$&a', t*e sa&e o, rea& propert' -as (ontra(te %' t*e presi ent o, a (&ose (orporation -it* t*e ;no-&e +e an a(:$ies(en(e o, its %oar o, ire(tors. In t*e present (ase, Motori(* is not a (&ose (orporation, as previo$s&' is($sse , an t*e a+ree)ent -as entere into %' t*e (orporate treas$rer -it*o$t t*e ;no-&e +e o, t*e %oar o, ire(tors. T*e Co$rt is not $na-are t*at t*ere are e2(eptiona& (ases -*ere 0an a(tion %' a ire(tor, -*o sin+&' is t*e (ontro&&in+ sto(;*o& er, )a' %e (onsi ere as a %in in+ (orporate a(t an a %oar a(tion as not*in+ )ore t*an a )ere ,or)a&it'.0 T*e present (ase, *o-ever, is not one o, t*e). As state %' petitioner, Spo$ses Re'na& o an Nenita Gr$en%er+ o-n 0a&)ost 88.=DDE0 o, Respon ent Motori(*. Sin(e Nenita is not t*e so&e (ontro&&in+ sto(;*o& er o, Motori(*, t*e a,ore)entione e2(eption oes not app&'. Grantin+ ar+$en o t*at t*e (orporate vei& o, Motori(* is to %e isre+ar e , t*e s$%/e(t par(e& o, &an -o$& t*en %e treate as (on/$+a& propert' o, Spo$ses Gr$en%er+, %e(a$se t*e sa)e -as a(:$ire

$rin+ t*eir )arria+e. T*ere %ein+ no in i(ation t*at sai spo$ses, -*o appear to *ave %een )arrie %e,ore t*e e,,e(tivit' o, t*e 3a)i&' Co e, *ave a+ree to a i,,erent propert' re+i)e, t*eir propert' re&ations -o$& %e +overne %' (on/$+a& partners*ip o, +ains. As a (onse:$en(e, Nenita Gr$en%er+ (o$& not *ave e,,e(te a sa&e o, t*e s$%/e(t &ot %e(a$se 0FtG*ere is no (oJo-ners*ip %et-een t*e spo$ses in t*e properties o, t*e (on/$+a& partners*ip o, +ains. Hen(e, neit*er spo$se (an a&ienate in ,avor o, anot*er *is or *er interest in t*e partners*ip or in an' propert' %e&on+in+ to it? neit*er spo$se (an as; ,or a partition o, t*e properties %e,ore t*e partners*ip *as %een &e+a&&' isso&ve .0 Ass$)in+ ,$rt*er, ,or t*e sa;e o, ar+$)ent, t*at t*e spo$ses1 propert' re+i)e is t*e a%so&$te (o))$nit' o, propert', t*e sa&e -o$& sti&& %e inva&i . Un er t*is re+i)e, 0a&ienation o, (o))$nit' propert' )$st *ave t*e -ritten (onsent o, t*e ot*er spo$se or t*e a$t*orit' o, t*e (o$rt -it*o$t -*i(* t*e isposition or en($)%ran(e is voi .0 66 Bot* re:$ire)ents are )ani,est&' a%sent in t*e instant (ase. T.4!7 I002e- C./33e56e7 Po!t4o5 o9 TSN Imm/te!4/3 Petitioner (a&&s o$r attention to t*e ,o&&o-in+ e2(erpt o, t*e trans(ript o, steno+rap*i( notes4TSN9> 0L. Di 'o$ ever represent to Mr. Co t*at 'o$ -ere a$t*ori.e %' t*e (orporation to se&& t*e propert'I A "es sir.0 Petitioner (&ai)s t*at t*e ans-er 0"es0 -as (rosse o$t, an , in its p&a(e -as -ritten a 0No0 -it* an initia& s(ri%%&e a%ove it. T*is, *o-ever, is ins$,,i(ient to prove t*at Nenita Gr$en%er+ -as a$t*ori.e to represent Respon ent Motori(* in t*e sa&e o, its i))ova%&e propert', Sai e2(erpt s*o$& %e $n erstoo in t*e (onte2t o, *er -*o&e testi)on'. D$rin+ *er (rossJe2a)ination, Respon ent Gr$en%er+ testi,ie > L So, 'o$ si+ne in 'o$r (apa(it' as t*e treas$rerI FAG "es, sir. L Even t*en 'o$ ;nFeG- a&& a&on+ t*at 'o$ F-ereG not a$t*ori.e I A "es, sir. L "o$ state on ire(t e2a)ination t*at 'o$ i not represent t*at 'o$ -ere a$t*ori.e to se&& t*e propert'I A "es, sir. L B$t 'o$ a&so i not sa' t*at 'o$ -ere not a$t*ori.e to se&& t*e propert', 'o$ i not te&& t*at to Mr. Co, is t*at (orre(tI A T*at -as not as;e o, )e. L "es, /$st ans-er it. A I /$st to& t*e) t*at I -as t*e treas$rer o, t*e (orporation an it F-asG a&so t*e presi ent -*o F-asG a&so a$t*ori.e to si+n on %e*a&, o, t*e (orporation. L "o$ i not sa' t*at 'o$ -ere not a$t*ori.e nor i 'o$ sa' t*at 'o$ -ere a$t*ori.e I A Mr. Co -as ver' intereste to p$r(*ase t*e propert' an *e o,,ere to p$t $p a P7CC,CCC.CC earnest )one' at t*at ti)e. T*at -as o$r ,irst )eetin+.0

C&ear&' t*en, Nenita Gr$en%er+ i not testi,' t*at Motori(* *a a$t*ori.e *er to se&& its propert'. On t*e ot*er *an , *er testi)on' e)onstrates t*at t*e presi ent o, Petitioner Corporation, in *is +reat esire to %$' t*e propert', t*re- (a$tion to t*e -in %' o,,erin+ an pa'in+ t*e earnest )one' -it*o$t ,irst veri,'in+ Gr$en%er+1s a$t*orit' to se&& t*e &ot. Fo2!t. I002e-D/m/6e0 /57 Atto!5e:'0 Fee0 3ina&&', petitioner pra's ,or a)a+es an attorne'1s ,ees, a&&e+in+ t*at 0FiGn an $tter isp&a' o, )a&i(e an %a ,ait*, FrGespon ents atte)pte an s$((ee e in i)pressin+ on t*e tria& (o$rt an Ft*eG Co$rt o, Appea&s t*at Gr$en%er+ i not represent *erse&, as a$t*ori.e %' Respon ent Motori(* espite t*e re(eipt iss$e %' t*e ,or)er spe(i,i(a&&' in i(atin+ t*at s*e -as si+nin+ on %e*a&, o, Motori(* Sa&es Corporation. Respon ent Motori(* &i;e-ise a(te in %a ,ait* -*en it (&ai)e it i not a$t*ori.e Respon ent Gr$en%er+ an t*at t*e (ontra(t F-asG not %in in+, Finso,arG as it F-asG (on(erne , espite re(eipt an en/o')ent o, t*e pro(ee s o, Gr$en%er+1s a(t.0 Ass$)in+ t*at Respon ent Motori(* -as not a part' to t*e a&&e+e ,ra$ , petitioner )aintains t*at Respon ent Gr$en%er+ s*o$& %e *e& &ia%&e %e(a$se s*e 0a(te ,ra$ $&ent&' an in %a ,ait* FinG representin+ *erse&, as $&' a$t*ori.e %' FRGespon ent FCGorporation.0 As a&rea ' state , -e s$stain t*e ,in in+s o, %ot* t*e tria& an t*e appe&&ate (o$rts t*at t*e ,ore+oin+ a&&e+ations &a(; ,a(t$a& %ases. Hen(e, an a-ar o, a)a+es or attorne'1s ,ees (annot %e /$sti,ie . T*e a)o$nt pai as 0earnest )one'0 -as not proven to *ave re o$n e to t*e %ene,it o, Respon ent Motori(*. Petitioner (&ai)s t*at sai a)o$nt -as eposite to t*e a((o$nt o, Respon ent Motori(*, %e(a$se 0it -as eposite -it* t*e a((o$nt o, Aren Co))er(ia& (Ho Motori(* Sa&es Corporation.0 Respon ent Gr$en%er+, *o-ever, isp$tes t*e a&&e+ations o, petitioner. S*e testi,ie as ,o&&o-s> 0L. "o$ vo&$ntari&' a((epte t*e P7CC,CCC.CC, as a )atter o, ,a(t, t*at -as en(as*e , t*e (*e(; -as en(as*e . A "es, sir, t*e (*e(; -as pai in )' na)e an I epositFe G it . . . L In 'o$r a((o$ntI A "es, sir1.0 In an' event, Gr$en%er+ o,,ere to ret$rn t*e a)o$nt to petitioner 0. . . sin(e t*e sa&e i not p$s* t*ro$+*.0 Moreover, -e note t*at An res Co is not a neop*'te in t*e -or& o, (orporate %$siness. He *as %een t*e presi ent o, Petitioner Corporation ,or )ore t*an ten 'ears an *as a&so serve as (*ie, e2e($tive o, t-o ot*er (orporate entities. Co (annot ,ei+n i+noran(e o, t*e s(ope o, t*e a$t*orit' o, a (orporate treas$rer s$(* as Gr$en%er+. Neit*er (an *e %e o%&ivio$s to *is $t' to as(ertain t*e s(ope o, Gr$en%er+1s a$t*ori.ation to enter into a (ontra(t to se&& a par(e& o, &an %e&on+in+ to Motori(*. In ee , petitioner1s (&ai) o, ,ra$ an %a ,ait* is $ns$%stantiate an ,ai&s to pers$a e t*e Co$rt. In $%ita%&', petitioner appears to %e t*e vi(ti) o, its o-n o,,i(er1s ne+&i+en(e in enterin+ into a (ontra(t -it* an pa'in+ an $na$t*ori.e o,,i(er o, anot*er (orporation.

As (orre(t&' r$&e %' t*e Co$rt o, Appea&s, *o-ever, Nenita Gr$en%er+ s*o$& %e or ere to ret$rn to petitioner t*e a)o$nt s*e re(eive as earnest )one', as 0no one s*a&& enri(* *i)se&, at t*e e2pense o, anot*er,0 a prin(ip&e e)%o ie in Arti(&e @7K6 o, t*e Civi& Co e. A&t*o$+* t*ere -as no %in in+ re&ation %et-een t*e), petitioner pai Gr$en%er+ on t*e )ista;en %e&ie, t*at s*e *a t*e a$t*orit' to se&& t*e propert' o, Motori(*. Arti(&e @7KK o, t*e Civi& Co e provi es t*at 0FpGa')ent %' reason o, a )ista;e in t*e (onstr$(tion or app&i(ation o, a i,,i($&t :$estion o, &a- )a' (o)e -it*in t*e s(ope o, t*e pre(e in+ arti(&e.0 BHERE3ORE, t*e petition is *ere%' DENIED an t*e assai&e De(ision is A33IRMED. SO ORDERED. Davi e, !r., Be&&osi&&o, Vit$+ an L$is$)%in+, !! ., (on($r.

T&IRD DIVISION SUBIC BA# (ETROPOLITAN AUT&ORIT# , RICHARD !. GORDON, 3ERDINAND M. ARISTORENAS, MANUEL B. LUI!ANO an RA"MOND P. VENTURA, petitioners, Vs. UNIVERSAL INTERNATIONAL GROUP OF TAI$AN , UIG INTERNATIONAL DEVELOPMENT CORPORATION an SUBIC BA" GOL3 AND COUNTR" CLUB, In(., respon ents. G.R. No. 1*1+"; Septem e! 14, 2;;; S#NOPSIS Respon ent UIG an petitioner SBMA entere into a Lease an Deve&op)ent A+ree)ent 4LDA9 -*ere%' respon ent UIG s*a&& &ease ,ro) petitioner SBMA t*e Bini(ti(an Go&, Co$rse an app$rtenant ,a(i&ities t*ereto to %e trans,or)e into a -or& (&ass 7=J*o&e +o&, (o$rse, +o&, (&$%Hresort, (o))er(ia& to$ris) an resi entia& (enter. T*e (ontra(t (ontaine preJter)ination (&a$ses. S$%se:$ent&', %e(a$se o, respon ent UIG1s ,ai&$re to (o)p&' -it* severa& o, its (ontra(t$a& $n erta;in+s, petitioner SBMA res(in e t*e LDA an too; over t*e possession, operation an )ana+e)ent o, t*e s$%/e(t pre)ises. T*erea,ter, respon ents ,i&e a (o)p&aint a+ainst petitioner SBMA ,or In/$n(tion an Da)a+es -it* pra'er ,or a -rit o, te)porar' restrainin+ or er an -rit o, pre&i)inar' in/$n(tion %e,ore t*e Re+iona& Tria& Co$rt 4RTC9 o, O&on+apo Cit'. Petitioner SBMA ,i&e a Motion to Dis)iss (onten in+, a)on+ ot*ers, t*at respon ent UIG *a no (apa(it' to s$e %e(a$se it is a ,orei+n nonJresi ent (orporation not &i(ense %' t*e Se($rities an E2(*an+e Co))ission. T*e RTC +rante respon ents1 app&i(ation ,or a -rit o, pre&i)inar' )an ator' an pro*i%itor' in/$n(tion an is)isse petitioner SBMA1s )otion to is)iss. T*e Co$rt o, Appea&s a,,ir)e t*e e(ision o, t*e tria& Co$rt. B*i&e it (on(e e t*at t*e &a- a&&o-e e2tra/$ i(ia& res(ission o, t*e (ontra(t, it r$&e t*at no rationa&i.ation -as possi%&e ,or t*e e2tra/$ i(ia& ta;in+ o, possession. Hen(e, t*is petition. T*e Co$rt o, Appea&s (orre(t&' a,,ir)e t*e enia& o, t*e Motion to Dis)iss %$t erre in s$stainin+ t*e Brit o, Pre&i)inar' Man ator' an Pro*i%itor' In/$n(tion. In or er to s$%/e(t a ,orei+n (orporation oin+ %$siness in t*e (o$ntr' to t*e /$ris i(tion o, o$r (o$rts, it )$st a(:$ire a &i(ense ,ro) t*e SEC an appoint an a+ent ,or servi(e o, pro(ess. Bit*o$t s$(* &i(ense, it (annot instit$te a s$it in t*e P*i&ippines. It s*o$& %e stresse , *o-ever, t*at t*e &i(ensin+ re:$ire)ent -as never inten e to ,avor o)esti( (orporations -*o enter into so&itar' transa(tions -it* $n-ar' ,orei+n ,ir)s an t*en rep$ iate t*eir o%&i+ations si)p&' %e(a$se t*e &atter are not &i(ense to o %$siness in t*is (o$ntr'. A,ter (ontra(tin+ -it* a ,orei+n (orporation, a o)esti( ,ir) is estoppe ,ro) en'in+ t*e ,or)er1s (apa(it' to s$e. In t*is (ase, SBMA -as estoppe ,ro) :$estionin+ t*e (apa(it' to s$e o, UIG. In enterin+ into t*e LDA -it* UIG, SBMA e,,e(tive&' re(o+ni.e its persona&it' an (apa(it' to instit$te t*e s$it %e,ore t*e tria& (o$rt.

A stip$&ation a$t*ori.in+ a part' to e2tra/$ i(ia&&' res(in a (ontra(t an to re(over possession o, t*e propert' in (ase o, (ontra(t$a& %rea(* is &a-,$&. A part' is ,ree to en,or(e it %' res(in in+ t*e (ontra(t an re(overin+ possession o, t*e propert' even -it*o$t (o$rt intervention. B*ere it is o%/e(te to, *o-ever, a /$ i(ia& eter)ination o, t*e iss$e is sti&& ne(essar' %e,ore a ta;eover )a' %e a&&o-e . In t*e present (ase, *o-ever, respon ents o not en' t*at t*ere -as s$(* a %rea(* o, t*e A+ree)ent. T*e' )ere&' ar+$e t*at t*e stip$&ation a&&o-in+ a res(ission an a re(over' o, possession is voi . Hen(e, t*e ot*er part' )a' va&i &' en,or(e s$(* stip$&ation. T*$s, t*ere -as a rationa&i.ation an &e+a& /$sti,i(ation ,or t*e stip$&ation a$t*ori.in+ SBMA to res(in t*e (ontra(t an to ta;e over t*e propert'. S#LLABUS 1. CO((ERCIAL LA$% CORPORATION CODE% AN UNLICENSED FOREIGN CORPORATION CANNOT INSTITUTE A SUIT IN T&E P&ILIPPINES. # A (orporation *as &e+a& stat$s on&' -it*in t*e state or territor' in -*i(* it -as or+ani.e . 3or t*is reason, a (orporation or+ani.e in anot*er (o$ntr' *as no persona&it' to ,i&e s$its in t*e P*i&ippines. In or er to s$%/e(t a ,orei+n (orporation oin+ %$siness in t*e (o$ntr' to t*e /$ris i(tion o, o$r (o$rts, it )$st a(:$ire a &i(ense ,ro) t*e SEC an appoint an a+ent ,or servi(e o, pro(ess. Bit*o$t s$(* &i(ense, it (annot instit$te a s$it in t*e P*i&ippines. 2. ID.% ID.% A DO(ESTIC CORPORATION $&O ENTERS INTO A CONTRACT $IT& UNLICENSED FOREIGN CORPORATION IS ESTOPPED FRO( DEN#ING T&E LATTER'S CAPACIT# TO SUE% CASE AT BAR . # It s*o$& %e stresse , t*at t*e &i(ensin+ re:$ire)ent -as 0never inten e to ,avor o)esti( (orporations -*o enter into so&itar' transa(tions -it* $n-ar' ,orei+n ,ir)s an t*en rep$ iate t*eir o%&i+ations si)p&' %e(a$se t*e &atter are not &i(ense to o %$siness in t*is (o$ntr'.0 A,ter (ontra(tin+ -it* a ,orei+n (orporation, a o)esti( ,ir) is estoppe ,ro) en'in+ t*e ,or)er1s (apa(it' to s$e. In t*is (ase, SBMA is estoppe ,ro) :$estionin+ t*e (apa(it' to s$e o, UIG. In enterin+ into t*e LDA -it* UIG, SBMA e,,e(tive&' re(o+ni.e its persona&it' an (apa(it' to instit$te t*e s$it %e,ore t*e tria& (o$rt. *. RE(EDIAL LA$% CIVIL PROCEDURE% PARTIES TO CIVIL ACTIONS% REAL PART# IN INTEREST% DEFINED% RESPONDENT CORPORATIONS S&OULD BE DEE(ED REAL PARTIES IN INTEREST IN CASE AT BAR. # Se(tion @, R$&e < o, t*e 788A R$&es o, Co$rt, e,ines a rea& part' in interest in t*is )anner> 0Se(. @. Parties in Interest. # A rea& part' in interest is t*e part' -*o stan s to %e %ene,ite or in/$re %' t*e /$ +)ent o, t*e s$it, or t*e part' entit&e to t*e avai&s o, t*e s$it. Un&ess ot*er-ise a$t*ori.e %' &a- or t*ese R$&es, ever' a(tion )$st %e prose($te or e,en e in t*e na)e o, t*e rea& part' in interest.0 T*e CA )a e a ,a(t$a& ,in in+ t*at UIGDC an SBGCCI -ere in possession o, t*e propert' -*en SBMA too; over. Moreover, it a&so ,o$n t*at t*e' *a a&rea ' )a e s$%stantia& invest)ents in t*e pro/e(t. Be ,in no reason at t*is ti)e to /$sti,' a i,,erent (on(&$sion. In vie- o, t*ese (ir($)stan(es, -e a+ree -it* t*e CA t*at UIGDC an SBGCCI stan to %e %ene,itte or in/$re %' t*e present s$it an s*o$& %e ee)e rea& parties in interest.

4. ID.% COURTS% REGIONAL TRIAL COURT% &AS JURISDICTION OVER ACTION FOR RESCISSION OF CONTRACT. # A (&ose s(r$tin' o, t*e a)en e Co)p&aint revea&s t*at it so$+*t to en/oin petitioners ,ro) res(in in+ t*e (ontra(t an ta;in+ over t*e propert'. B*i&e possession -as a ne(essar' (onse:$en(e o, t*e s$it, it -as )ere&' in(i enta&. T*e )ain iss$e -as -*et*er SBMA (o$& res(in t*e A+ree)ent. Be(a$se it -as a isp$te t*at -as in(apa%&e o, pe($niar' esti)ation, it -as -it*in t*e /$ris i(tion o, t*e RTC. 5. ID.% PROVISIONAL RE(EDIES% INJUNCTION% $RIT OF PRELI(INAR# INJUNCTION% CANNOT BE ISSUED TO RESTRAIN I(PLE(ENTATION OF CONVERSION PROJECTS% SECTION 21 OF RA <22<% S&OULD NOT BAR JUDICIAL SCRUTIN# OF IRREGULARITIES CO((ITTED B# T&E PARTIES TO A CONTRACT. # Be a+ree -it* t*e CA t*at Se(tion @7 o, R.A. A@@A is not a %&an;et pro*i%ition o, t*e iss$an(e o, an in/$n(tive re&ie, a+ainst an' SBMA a(tion. Se(tion @7 o, RA A@@A pro*i%its on&' s$(* (o$rt or ers -*i(* restrain t*e 0i)p&e)entation o, t*e pro/e(ts ,or t*e (onversion into a&ternative pro $(tive $ses o, t*e )i&itar' reservations.0 T*e Brit iss$e in t*is (ase i not restrain or en/oin t*e i)p&e)entation o, an' o, SBMA1s (onversion pro/e(ts. In ,a(t, it a&&o-e UIG to pro(ee -it* t*e eve&op)ent o, t*e +o&, (o$rse p$rs$ant to t*e LDA. It )ere&' restraine SBMA ,ro) ta;in+ over t*e +o&, (o$rse. C&ear&', t*e assai&e RTC Or er i not see; to e&a' or *a)per t*e (onversion o, t*e ,or)er nava& %ase into (ivi&ian $ses. Moreover, t*e assai&e Brit o, Pre&i)inar' In/$n(tion -as iss$e in (onne(tion -it* a isp$te pertainin+ to t*e (orre(t interpretation o, t*e LDA. To ivest t*e tria& (o$rt o, t*at a$t*orit' is to +ive SBMA $n*a)pere is(retion to isre+ar its (ontra(t$a& o%&i+ations $n er t*e +$ise o, i)p&e)entin+ its pro/e(ts. In ee , Se(tion @7 o, RA A@@A s*o$& not %ar /$ i(ia& s(r$tin' o, irre+$&arities a&&e+e &' (o))itte %' SBMA. +. ID.% ID.% ID.% $RIT OF (ANDATOR# INJUNCTION% RE=UISITES FOR GRANT T&EREOF% (ANDATOR# INJUNCTION DOES NOT PRESERVE T&E STATUS =UO. # A -rit o, )an ator' in/$n(tion re:$ires t*e per,or)an(e o, a parti($&ar a(t an is +rante on&' $pon a s*o-in+ o, t*e ,o&&o-in+ re:$isites> 07. T*e invasion o, t*e ri+*t is )ateria& an s$%stantia&? @. T*e ri+*t o, a (o)p&ainant is (&ear an $n)ista;a%&e? <. T*ere is an $r+ent an per)anent ne(essit' ,or t*e -rit to prevent serio$s a)a+e.0 Be(a$se it (o))an s t*e per,or)an(e o, an a(t, a )an ator' in/$n(tion oes not preserve t*e stat$s :$o an is t*$s )ore (a$tio$s&' re+ar e t*an a )ere pro*i%itive in/$n(tion. A((or in+&', t*e iss$an(e o, t*e ,or)er is /$sti,ie on&' in a (&ear (ase, ,ree ,ro) o$%t an isp$te. Ne(essari&', t*e app&i(ant *as t*e %$r en o, s*o-in+ t*at it is entit&e to t*e -rit. <. CIVIL LA$% CONTRACTS% STIPULATION AUT&ORI,ING A PART# TO E)TRAJUDICIALL# RESCIND A CONTRACT AND TO RECOVER POSSESSION OF PROPERT# IN CASE OF CONTRACTUAL BREAC& IS ALLO$ED B# LA$. # Be(a$se o, UIG1s ,ai&$re to (o)p&' -it* severa& o, its (ontra(t$a& $n erta;in+s, SBMA res(in e t*e LDA an too; over t*e possession, t*e operation an t*e )ana+e)ent o, t*e propert' -it*o$t an' /$ i(ia& i)pri)at$r. In oin+ so, it re&ie on t*e provisions o, t*e LDA. T*e s$%/e(t stip$&ation is a&&o-e %' &a-.

Moreover, a part' is ,ree to en,or(e it %' res(in in+ t*e (ontra(t an re(overin+ possession o, t*e propert' even -it*o$t (o$rt intervention. B*ere it is o%/e(te to, *o-ever, a /$ i(ia& eter)ination o, t*e iss$e is sti&& ne(essar'. 3or(e or %&oo s*e (annot %e /$sti,ie in t*e en,or(e)ent o, t*e stip$&ation. B*ere t*e &essees o,,er p*'si(a& resistan(e, t*e &essors )a' app&' ,or a -rit o, pre&i)inar' )an ator' in/$n(tion, to -*i(* t*e' *ave a (&ear an $n)ista;a%&e ri+*t. In ee , (o$rts are t*e ,ina& ar%iters. T*$s, (ontrar' to t*e r$&in+ o, t*e CA an t*e RTC, t*ere is a rationa&i.ation an a &e+a& /$sti,i(ation ,or t*e stip$&ation a$t*ori.in+ SBMA to res(in t*e (ontra(t an to ta;e over t*e propert'. ". ID.% ID.% NO VALID OBJECTION TO PETITIONERS' E)ERCISE OF ITS RIG&T IN CASE AT BAR% PARTIES CANNOT DISREGARD A LA$FUL STIPULATION AT $ILL $IT&OUT AN# VALID REASON . # Respon ents1 stan -as not a va&i or s$,,i(ient o%/e(tion to SBMA1s e2er(ise o, its ri+*t. In ee , s$stainin+ t*eir (&ai) -o$& $n $&' i)inis* t*e ,or(e o, s$(* &a-,$& stip$&ation an a&&o- parties to isre+ar it at -i&& -it*o$t an' va&i reason. In t*is (ase, respon ents )isera%&' ,ai&e to +ive an' se)%&an(e o, o%/e(tion to t*e )erits o, SBMA1s a&&e+ations. Moreover, -e ,in no a e:$ate s*o-in+ o, resistan(e to SBMA1s i)p&e)entation o, t*e s$%/e(t stip$&ation. Un er t*e (ir($)stan(es, SBMA s*o-e t*at it *a a ri+*t not on&' to res(in t*e (ontra(t, %$t a&so to ta;e over t*e propert'. On t*e ot*er *an , respon ents *ave not s*o-n an' 0(&ear an $n)ista;a%&e ri+*t0 to restrain SBMA ,ro) en,or(in+ t*e (ontra(t$a& stip$&ation. In ee , t*e' *ave o,,ere no o%/e(tion to SBMA1s a&&e+ations o, (ontra(t$a& %rea(*. Bit*o$t pre/$ +in+ t*eir ri+*t to o,,er (ontrovertin+ evi en(e $rin+ t*e tria& on t*e )erits, t*e Co$rt *o& s t*at t*e' ,ai&e to o so in t*eir app&i(ation ,or a -rit o, pre&i)inar' in/$n(tion. DECISION PANGANIBAN, J pA stip$&ation a$t*ori.in+ a part' to e2tra/$ i(ia&&' res(in a (ontra(t an to re(over possession o, t*e propert' in (ase o, (ontra(t$a& %rea(* is &a-,$&. B$t -*en a va&i o%/e(tion is raise , a /$ i(ia& eter)ination o, t*e iss$e is sti&& ne(essar' %e,ore a ta;eover )a' %e a&&o-e . In t*e present (ase, *o-ever, respon ents o not en' t*at t*ere -as s$(* a %rea(* o, t*e A+ree)ent? t*e' )ere&' ar+$e t*at t*e stip$&ation a&&o-in+ a res(ission an a re(over' o, possession is voi . Hen(e, t*e ot*er part' )a' va&i &' en,or(e s$(* stip$&ation. T.e C/0e Be,ore $s is a Petition $n er R$&e 6K o, t*e R$&es o, Co$rt assai&in+ t*e De(e)%er <, 788A De(ision o, t*e Co$rt o, Appea&s 4CA9 in CAJGR SP No. 6KKC7. T*e e(reta& portion o, t*e CA De(ision rea s as ,o&&o-s> 0BHERE3ORE, pre)ises (onsi ere , t*e Petition is, as it is *ere%', DISMISSED ,or &a(; o, )erit, an (ertiorari DENIED. T*e Or ers o, t*e respon ent (o$rt %ot* ate C< O(to%er 788A *ere%' STAND.0

T*e ,irst Or er o, t*e Re+iona& Tria& Co$rt 4RTC9 o, O&on+apo Cit' 4Bran(* A<9, -*i(* -as a,,ir)e %' t*e appe&&ate (o$rt, +rante *erein respon ents1 app&i(ation ,or a -rit o, pre&i)inar' )an ator' an pro*i%itor' in/$n(tion in t*is -ise> 0BHERE3ORE, pre)ises (onsi ere , t*e e,en ants, t*eir a+ents, o,,i(ers an e)p&o'ees, an a&& persons a(tin+ in t*eir %e*a&, are ire(te to restore pea(e,$&&' to t*e p&ainti,,s a&& possession o, t*e +o&, (o$rse, (&$%*o$se, o,,i(es an ot*er app$rtenan(es s$%/e(t o, t*e Lease an Deve&op)ent A+ree)ent %et-een UIG Tai-an an t*e SBMA? an t*e sai e,en ants, an t*eir a+ents, o,,i(ers Fan G e)p&o'ees to re,rain F,ro)G o%str$(tin+ or )e &in+ in t*e operation an )ana+e)ent t*ereo, or . . . ot*er-ise (o))ittin+ a(ts ini)i(a& to t*e interest o, p&ainti,,s in t*e )ana+e)ent or operation o, t*e sa)e, $nti& t*e parties )a' %e *ear on t*e )erits o, t*e (ase. 0T*e In/$n(tion %on is ,i2e at One Mi&&ion Pesos 4P7,CCC,CCC.CC9 in (as* or s$ret' %on provi e %' a s$ret' (o)pan' o, rep$ta%&e so&ven('.0 T*e se(on RTC Or er, a&so ate O(to%er <, 788A, ispose o, petitioners1 Motion to Dis)iss as ,o&&o-s> 0BHERE3ORE, an t*e ,ore+oin+ pFreG)ises (onsi ere , De,en ants1 A)en e an Conso&i ate Motion To Dis)iss is *ere%' DENIED ,or &a(; o, )erit. 0T*e Motion to Dis)iss ,i&e %' Ri(*ar !. Gor on is F+Grante inso,ar as t*e s$it a+ainst *i) is (on(erne in *is private or persona& (apa(it'. He s*a&&, *o-ever, re)ain as e,en ant in *is o,,i(ia& (apa(it'.0 T.e F/1t0 T*e $n isp$te ,a(ts are s$))ari.e %' t*e Co$rt o, Appea&s as ,o&&o-s> 0On @K Ma' 788K, a 1Lease an Deve&op)ent A+ree)ent1 -as e2e($te %' respon ent UIG an petitioner SBMA $n er -*i(* respon ent UIG s*a&& &ease ,ro) petitioner SBMA t*e Bini(ti(an Go&, Co$rse an app$rtenant ,a(i&ities t*ereto to %e trans,or)e into a -or& (&ass 7=J*o&e +o&, (o$rse, +o&, (&$%Hresort, (o))er(ia& to$ris) an resi entia& (enter. T*e (ontra(t in pertinent part (ontains preJter)ination (&a$ses, -*i(* provi e> 1Se(tion @@. De,a$&t 4a9 T*e ,o&&o-in+ a(ts an o)issions s*a&& (onstit$te e,a$&t %' Tenant 4ea(* an Event o, De,a$&t9> 222 222 222 4ii9 Tenant or an' o, its S$%si iaries s*a&& (o))it a )ateria& %rea(* or vio&ation o, an' o, t*e (on itions, (ovenants or a+ree)ents *erein )a e %' Tenant or s$(* S$%si iar' 4ot*er t*an t*ose es(ri%e in Se(tions @@.@ FaG F&G an s$(* vio&ation or ,ai&$re s*a&& (ontin$e ,or t*irt' 4<C9 a's a,ter noti(e ,ro) t*e Lan &or , or, at Lan &or 1s so&e is(retion, si2t' 4DC9 a's i, s$(* vio&ations or ,ai&$re is reasona%&' s$s(epti%&e o, ($re

$rin+ s$(* DC a' perio an Tenant or s$(* S$%si iar' %e+ins an i&i+ent&' p$rs$es to (o)p&etion s$(* ($re -it*in t*irt' 4<C9 a's o, t*e initia& noti(e ,ro) Lan &or ? 222 222 222 4%9 I, an event o, e,a$&t s*a&& *ave o(($rre an %e (ontin$in+, Lan &or )a', in its so&e is(retion? 4i9 Ter)inate t*is Lease t*irt' 4<C9 a's a,ter t*e e2piration o, an' perio +rante *ere$n er to ($re an' Event o, De,a$&t an retain a&& rent an ot*er a)o$nts previo$s&' pai %' tenant an its S$%si iaries. T*erea,ter, Lan &or )a' i))e iate&' reenter, renovate or re&et a&& or part o, t*e Propert' to ot*ers, an (an(e& a&& ri+*ts an privi&e+es +rante to Tenant an its S$%si iaries -it*o$t an' restri(tion on re(over' %' Lan &or ,or rents, ,ees an a)a+es o-ne %' Tenant an its S$%si iaries.1 0On 6 3e%r$ar' 788A, Petitioner SBMA sent a &etter to private respon ent UIG (a&&in+ its attention to its a&&e+e severa& (ontra(t$a& vio&ations in vie- o, private respon ent UIG1s ,ai&$re to e&iver its vario$s (ontra(t$a& o%&i+ations, pri)ari&' its ,ai&$re to (o)p&ete t*e re*a%i&itation o, t*e Go&, Co$rse in ti)e ,or t*e APEC Lea er1s S$))it, an to pa' a(($)$&ate &ease renta&s an $ti&ities, an to post t*e re:$ire per,or)an(e %on . Respon ent UIG, in its &etter o, A 3e%r$ar' 788A, interpose as an e2($se t*e a&&e+e e,a$&t o, its )ain (ontra(tor 33 Cr$., res$&tin+ in t*eir ,i&in+ o, s$it a+ainst t*e &atter, an (o))itte itse&, to (o)p&' -it* its o%&i+ations -it*in a ,e- a's. Private respon ent UIG, *o-ever, ,ai&e to (o)p&' -it* its $n erta;in+s. On A Mar(* 788A, petitioner SBMA sent a &etter to private respon ent UIG e(&arin+ t*e &atter in e,a$&t o, its (ontra(t$a& o%&i+ations to SBMA $n er Se(tion @@.7 o, t*e Lease an Deve&op)ent A+ree)ent an re:$ire it to s*o- (a$se -*' petitioner SBMA s*o$& not preJter)inate t*e a+ree)ent. Private respon ents pai t*e renta& arreara+es %$t t*e ot*er o%&i+ations re)aine $nsatis,ie . 0On = Septe)%er 788A, a &etter o, preJter)ination -as serve %' petitioner SBMA re:$irin+ private respon ent UIG to va(ate t*e pre)ises. On 7@ Septe)%er 788A, petitioner serve t*e ,or)a& noti(e o, (&os$re o, S$%i( Ba' Go&, Co$rse an too; over possession o, t*e s$%/e(t pre)ises. On even ate, private respon ent ,i&e a (o)p&aint a+ainst petitioner SBMA ,or 1In/$n(tion an Da)a+es1 -it* pra'er ,or a -rit o, te)porar' restrainin+ or er an -rit o, pre&i)inar' in/$n(tion. On < O(to%er 788A, respon ent (o$rt iss$e t*e t-o assai&e or ers s$%/e(t o, t*e petition.0 R23456 o9 t.e Co2!t o9 Appe/30 T*e Co$rt o, Appea&s $p*e& t*e (apa(it' to s$e o, Respon ent Universa& Internationa& Gro$p o, Tai-an 4UIG9 %e(a$se petitioners, *avin+ entere into a Lease Deve&op)ent A+ree)ent 4LDA9 -it* it, -ere estoppe ,ro) :$estionin+ its stan in+. It a&so *e& t*at Respon ents UIG Internationa& Deve&op)ent Corporation 4UIGDC9 an S$%i( Ba' Go&, an Co$ntr' C&$%, In(., 4SBGCCI9 -ere rea& parties in interest %e(a$se t*e' *a )a e s$%stantia& invest)ents in t*e vent$re an *a %een in possession o, t*e propert' -*en S$%i( Ba' Metropo&itan A$t*orit' 4SBMA9 res(in e t*e LDA

Li;e-ise, it e%$n;e petitioners1 s$%)ission t*at Se(tion @7 o, RA A@@A -as 0a %&an;et pros(ription a+ainst t*e iss$an(e o, an' an a&& in/$n(tive re&ie,FsG a+ainst SBMA.0 It sai t*at 0t*ose a(tions -*i(* are re)ove ,ro) t*e state o%/e(tives o, t*e (orporate entit' . . . (annot %e p&a(e %e'on t*e pa&e o, pro*i%itor' -rits.0 B*i&e it (on(e e t*at t*e &a- a&&o-e e2tra/$ i(ia& res(ission o, a (ontra(t, it r$&e t*at 0no rationa&i.ation -as possi%&e0 ,or t*e e2tra/$ i(ia& ta;in+ o, possession. It reasone t*at 0no one )a' ta;e t*e &a- into *is o-n *an s. To *o& ot*er-ise -o$& %e pro $(tive o, not*in+ %$t )is(*ie, an (*aos.0 It a&so re/e(te petitioners1 re&ian(e on Consin+ v. !a)an re, in -*i(* t*e S$pre)e Co$rt a&&o-e a (ontra(t$a& stip$&ation +ivin+ t*e &essor t*e ri+*t to ta;e possession o, t*e &ease propert' -it*o$t nee o, (o$rt or er. It e2p&aine t*at Consin+ -as a 0/$ i(ia& a%erration, not (o))on %$t not $n;no-n in t*e %o ' o, o$r /$rispr$ en(e, -*i(* &a's o-n a r$&in+ (ontrar' to t*e tea(*in+ o, t*e +reater )ass o, (ases.0 3$rt*er)ore, it *e& t*at t*e iss$an(e o, t*e Brit o, Pre&i)inar' In/$n(tion i not ispose o, t*e )ain iss$e. Con(&$ in+, it o%serve t*at 0-e (annot an s*o$& not sen t*e )essa+e to ,orei+ners -*o o %$siness *ere t*at -e are a +ro$p o, /in+oists -*o (annot &oo; %e'on o$r narro- interests an )$st &oo; at ever' stran+er -it* a -ar' e'e an treat t*e) -it* $neven *an s.0 Disa+reein+ -it* t*e a%ove /$ +)ent, petitioners e&evate t*e )atter to t*is Co$rt. T.e I002e0 In its Me)oran $), Petitioner SBMA s$%)its t*e ,o&&o-in+ iss$es ,or o$r (onsi eration> I. 0B*et*er or not t*e respon ent (o$rt (o))itte a reversi%&e error in r$&in+ t*at petitioner1s a(tion o, e2traJ/$ i(ia&&' re(overin+ t*e possession o, t*e s$%/e(t pre)ises is s$ppose &' i&&e+a& Fas itG r$ns (o$nter to t*e esta%&is*e &a- an Ft*eG app&i(a%&e e(isions o, t*e S$pre)e Co$rt on t*e )atter. II. 0B*et*er or not t*e respon ent (o$rt (o))itte a reversi%&e error in r$&in+ t*at> 4a9 T*e tria& (o$rt *aF G /$ris i(tion over t*e nat$re an s$%/e(t )atter o, t*e (ase espite t*e ,a(t t*at t*e s$it ,i&e %' private respon ents is essentia&&' an e/e(t)ent (ase, an 4%9 T*e tria& (o$rt *aF G a$t*orit' to iss$e t*e :$estione in/$n(tive re&ie, espite t*e e2press pro*i%ition $n er Se(tion @7 o, R.A. A@@A III. 0B*et*er or not respon ent (o$rt (o))itte a reversi%&e error in r$&in+ t*at private respon ents *aF G t*e (apa(it' to s$e an possess )ateria& interest to instit$te an a(tion a+ainst petitioners. IV. 0B*et*er or not t*e respon ent (o$rt (o))itte a reversi%&e error %' san(tionin+ epart$re %' t*e tria& (o$rt ,ro) t*e a((epte an $s$a& (o$rse o, /$ i(ia& pro(ee in+s %'

,ai&in+ to )a;e an' r$&in+ on t*e essentia& e&e)ents o, in/$n(tive re&ie, (onsistin+ o,> 479 a (&ear an $n)ista;a%&e ri+*t an 4@9 irrepara%&e a)a+e on t*e part o, t*e private respon ents. V. 0B*et*er or not respon ent (o$rt (o))itte a reversi%&e error in epartin+ ,ro) t*e a((epte an $s$a& (o$rse o, /$ i(ia& pro(ee in+s %' san(tionin+ t*e i&&e+a& pro(e $re o, ta;in+ possession o, t*e s$%/e(t pre)ises ,ro) petitioner SBMA an trans,errin+ it into t*e *an s o, t*e private respon ents, a&t*o$+* t*e ri+*ts o, t*e &atter *aF G not 'et %een (&ear&' esta%&is*e . VI. 0B*et*er or not respon ent (o$rt (o))itte a reversi%&e error %' epartin+ ,ro) t*e a((epte an $s$a& (o$rse o, /$ i(ia& pro(ee in+s %' s$stainin+ t*e +rant o, in/$n(tive re&ie, -*i(* e,,e(tive&' pre/$ +e t*e )erits o, t*e )ain (ase. VII. 0B*et*er or not respon ent (o$rt (o))itte a reversi%&e error %' epartin+ ,ro) t*e a((epte an $s$a& (o$rse o, /$ i(ia& pro(ee in+s %' s$stainin+ t*e +rant o, in/$n(tive re&ie, in ,avor o, t*e private respon ents a&t*o$+* t*e &atter F-eGre (&ear&' not entit&e t*ereto as t*e' (a)e %e,ore t*e (o$rts -it* $n(&ean *an s. VIII. 0B*et*er or not in t*e event o, a 1no reversi%&e error1 /$ +)ent on t*e :$estione e(ision o, t*e respon ent (o$rt, t*is Honora%&e Division o, t*e S$pre)e Co$rt )i+*t )o i,' or even reverse t*e o(trines an prin(ip&es o, &a- &ai o-n %' t*e S$pre)e Co$rt in severa& &ea in+ (ases, in vio&ation o, Se(tion 6, Arti(&e VIII o, t*e 78=A P*i&ippine Constit$tion. IO. 0B*et*er or not in t*e event o, a 1no reversi%&e error1 /$ +)ent, t*is Honora%&e Division o, t*e S$pre)e Co$rt )i+*t $n-ittin+&' (a$se +reat &oss or irrepara%&e a)a+e to t*e +overn)ent %e(a$se s$(* a r$&in+ ten Fe G to sen a -ron+ si+na& t*at P*i&ippine Co$rts F-o$& G re-ar rat*er t*an p$nis* ,orei+n investors -*o )isera%&' ,ai&e to (o)p&' -it* t*eir (ontra(t$a& (o))it)ents to eve&op vita& +overn)ent assets.0 Disti&&in+ t*e a%oveJ:$ote assi+n)ent o, errors, -e ,in t-o )ain iss$es %e,ore $s> 4a9 -*et*er t*e enia& o, petitioners1 Motion to Dis)iss -as (orre(t, an 4%9 -*et*er t*e iss$an(e o, t*e Brit o, Pre&i)inar' Man ator' an Pro*i%itor' In/$n(tion -as proper. Un er t*e ,irst iss$e, t*e Co$rt s*a&& reso&ve 479 -*et*er Respon ent UIG *as t*e (apa(it' to s$e, 4@9 -*et*er Respon ents UIGDC an SBGCCI are rea& parties in interest, an 4<9 -*et*er t*e RTC *as /$ris i(tion over t*e s$it. Un er t*e se(on iss$e, t*e Co$rt s*a&& eter)ine t*ese :$estions> 479 -*et*er t*e Brit o, In/$n(tion a+ainst SBMA iss$e %' t*e tria& (o$rt (ontravenes Se(tion @7 o, RA A@@A? 4@9 -*et*er respon ents *ave esta%&is*e t*eir entit&e)ent to t*e Brit? an 4<9 -*et*er SBMA1s res(ission o, t*e LDA an ta;eover o, t*e propert' are a&&o-e %' &a-.

T.e Co2!t'0 R23456 T*e Petition is part&' )eritorio$s. T*e CA (orre(t&' a,,ir)e t*e enia& o, t*e Motion to Dis)iss, %$t erre in s$stainin+ t*e Brit o, Pre&i)inar' Man ator' an Pro*i%itor' In/$n(tion. F4!0t I002e-De54/3 o9 t.e (ot4o5 to D40m400 In its a)en e Motion to Dis)iss ,i&e %e,ore t*e RTC, petitioners (onten e t*at UIG *a no (apa(it' to s$e, an t*at UIGDC an SBGCCI *a no )ateria& interest in t*e present (ase. Bot* t*e appe&&ate an t*e tria& (o$rts re/e(te t*ese (ontentions. Reiteratin+ t*e ar+$)ents %e,ore $s, petitioners a t*at t*e RTC *a no /$ris i(tion over t*e nat$re o, t*e (ase. 4a9 Respon ents1 Capa(it' to S$e Petitioners (onten t*at UIG oes not *ave t*e (apa(it' to s$e, %e(a$se it is a ,orei+n nonJresi ent (orporation not &i(ense %' t*e Se($rities an E2(*an+e Co))ission to o %$siness in t*e P*i&ippines. T*e' (onten t*at t*e (apa(it' to s$e is (on,erre %' &a- an not %' t*e parties. As a +enera& r$&e, $n&i(ense ,orei+n nonJresi ent (orporations (annot ,i&e s$its in t*e P*i&ippines. Se(tion 7<< o, t*e Corporation Co e spe(i,i(a&&' provi es> 0SECTION 7<<. No ,orei+n (orporation transa(tin+ %$siness in t*e P*i&ippines -it*o$t a &i(ense, or its s$((essors or assi+ns, s*a&& %e per)itte to )aintain or intervene in an' a(tion, s$it or pro(ee in+ in an' (o$rt or a )inistrative a+en(' o, t*e P*i&ippines, %$t s$(* (orporation )a' %e s$e or pro(ee e a+ainst %e,ore P*i&ippine (o$rts or a )inistrative tri%$na&s on an' va&i (a$se o, a(tion re(o+ni.e $n er P*i&ippine &a-s.0 A (orporation *as &e+a& stat$s on&' -it*in t*e state or territor' in -*i(* it -as or+ani.e . 3or t*is reason, a (orporation or+ani.e in anot*er (o$ntr' *as no persona&it' to ,i&e s$its in t*e P*i&ippines. In or er to s$%/e(t a ,orei+n (orporation oin+ %$siness in t*e (o$ntr' to t*e /$ris i(tion o, o$r (o$rts, it )$st a(:$ire a &i(ense ,ro) t*e SEC an appoint an a+ent ,or servi(e o, pro(ess. Bit*o$t s$(* &i(ense, it (annot instit$te a s$it in t*e P*i&ippines. It s*o$& %e stresse , *o-ever, t*at t*e &i(ensin+ re:$ire)ent -as 0never inten e to ,avor o)esti( (orporations -*o enter into so&itar' transa(tions -it* $n-ar' ,orei+n ,ir)s an t*en rep$ iate t*eir o%&i+ations si)p&' %e(a$se t*e &atter are not &i(ense to o %$siness in t*is (o$ntr'.0 A,ter (ontra(tin+ -it* a ,orei+n (orporation, a o)esti( ,ir) is estoppe ,ro) en'in+ t*e ,or)er1s (apa(it' to s$e. Hen(e, in Merri& L'n(* 3$t$res v. CA, t*e Co$rt r$&e > 0T*e r$&e is t*at a part' is estoppe to (*a&&en+e t*e persona&it' o, a (orporation a,ter *avin+ a(;no-&e +e t*e sa)e %' enterin+ into a (ontra(t -it* it. An t*e 1 o(trine o, estoppe& to en' (orporate e2isten(e app&ies to ,orei+n as -e&& as to o)esti( (orporations1? 0one -*o *as ea&t -it* a (orporation o, ,orei+n ori+in as a (orporate entit' is estoppe to en' its e2isten(e an (apa(it'.1 T*e prin(ip&e 1-i&& %e app&ie to

prevent a person (ontra(tin+ -it* a ,orei+n (orporation ,ro) &ater ta;in+ a vanta+e o, its non(o)p&ian(e -it* t*e stat$tes, (*ie,&' in (ases -*ere s$(* person *as re(eive t*e %ene,its o, t*e (ontra(t . . .10 T*is o(trine -as initiate as ear&' as 78@6 in Asia Ban;in+ Corporation v. Stan ar Pro $(ts an reiterate in Geor+ Grot/a*n GMBH v. Isnani an Co))$ni(ation Materia&s an Desi+n v. CA. In Anta) Conso&i ate v. CA, t*e Co$rt a&so re/e(te a si)i&ar ar+$)ent an note t*at 0it is a (o))on p&o' o, e,a$&tin+ &o(a& (o)panies -*i(* are s$e %' $n&i(ense ,orei+n (o)panies not en+a+e in %$siness in t*e P*i&ippines to invo;e &a(; o, (apa(it' to s$e.0 In t*is (ase, SBMA is estoppe ,ro) :$estionin+ t*e (apa(it' to s$e o, UIG. In enterin+ into t*e LDA -it* UIG, SBMA e,,e(tive&' re(o+ni.e its persona&it' an (apa(it' to instit$te t*e s$it %e,ore t*e tria& (o$rt. 4%9 Materia& Interest o, SBGCCI an UIGDC Se(tion @, R$&e < o, t*e 788A R$&es o, Co$rt, e,ines a rea& part' in interest in t*is )anner> 0SECTION @. Parties in Interest. # A rea& part' in interest is t*e part' -*o stan s to %e %ene,ite or in/$re %' t*e /$ +)ent o, t*e s$it, or t*e part' entit&e to t*e avai&s o, t*e s$it. Un&ess ot*er-ise a$t*ori.e %' &a- or t*ese R$&es, ever' a(tion )$st %e prose($te or e,en e in t*e na)e o, t*e rea& part' in interest.0 SBMA (onten s t*at UIGDC is not a rea& part' in interest, %e(a$se it -as not priv' to t*e LDA %et-een UIG an SBMA. It ,$rt*er a&&e+es t*at it i not approve t*e assi+n)ent to UIGDC o, UIG1s ri+*ts t*ere$n er. In &i;e )anner, SBGCCI *a no interest in t*e LDA %e(a$se it on&' erive its ri+*ts ,ro) t*e Deve&op)ent A+ree)ent it *a entere into -it* UIGDC. Be are not pers$a e . T*e CA )a e a ,a(t$a& ,in in+ t*at UIGDC an SBGCCI -ere in possession o, t*e propert' -*en SBMA too; over. Moreover, it a&so ,o$n t*at t*e' *a a&rea ' )a e s$%stantia& invest)ents in t*e pro/e(t. Be ,in no reason at t*is ti)e to /$sti,' a i,,erent (on(&$sion. In vie- o, t*ese (ir($)stan(es, -e a+ree -it* t*e CA t*at UIGDC an SBGCCI stan to %e %ene,itte or in/$re %' t*e present s$it an s*o$& %e ee)e rea& parties in interest. SBMA1s (ontention # t*at it *a not approve UIG1s assi+n)ent o, ri+*ts to UIGDC # is not ne(essari&' %ere,t o, )erit, *o-ever. SBMA s*o$& raise t*is iss$e, not no- %$t in appropriate pro(ee in+s %e,ore t*e tria& (o$rt. 4(9 !$ris i(tion Over t*e S$%/e(t Matter Petitioners a&so ar+$e t*at t*e RTC *a no /$ris i(tion over t*e (ase, -*i(* -as a&&e+e &' an e/e(t)ent s$it (o+ni.a%&e %' )$ni(ipa& tria& (o$rts. T*e' a t*at t*e Co)p&aint e)an e t*at respon ents %e restore to t*e possession o, t*e s$%/e(t &ease pre)ises.

Be isa+ree. A (&ose s(r$tin' o, t*e a)en e Co)p&aint revea&s t*at it so$+*t to en/oin petitioners ,ro) res(in in+ t*e (ontra(t an ta;in+ over t*e propert'. B*i&e possession -as a ne(essar' (onse:$en(e o, t*e s$it, it -as )ere&' in(i enta&. T*e )ain iss$e -as -*et*er SBMA (o$& res(in t*e A+ree)ent. Be(a$se it -as a isp$te t*at -as in(apa%&e o, pe($niar' esti)ation, it -as -it*in t*e /$ris i(tion o, t*e RTC. Se1o57 I002e-I002/51e o9 t.e $!4t o9 I5>251t4o5 4a9 Present Brit o, In/$n(tion Not Barre %' RA A@@A Petitioners (onten t*at t*e RTC -as %arre ,ro) iss$in+ a -rit o, in/$n(tion in t*is (ase, p$rs$ant to Se(tion @7 o, RA A@@A -*i(* provi es as ,o&&o-s> 0SECTION @7. In/$n(tion an Restrainin+ Or er. # T*e i)p&e)entation o, t*e pro/e(ts ,or t*e (onversion into a&ternative pro $(tive $ses o, t*e )i&itar' reservations is $r+ent an ne(essar' an s*a&& not %e restraine or en/oine e2(ept %' an or er iss$e %' t*e S$pre)e Co$rt o, t*e P*i&ippines.0 Be are not pers$a e . Be a+ree -it* t*e CA t*at t*e present provision is not a %&an;et pro*i%ition o, t*e iss$an(e o, an in/$n(tive re&ie, a+ainst an' SBMA a(tion. Se(tion @7 o, RA A@@A pro*i%its on&' s$(* (o$rt or ers -*i(* restrain t*e 0i)p&e)entation o, t*e pro/e(ts ,or t*e (onversion into a&ternative pro $(tive $ses o, t*e )i&itar' reservations.0 T*e Brit iss$e in t*is (ase i not restrain or en/oin t*e i)p&e)entation o, an' o, SBMA1s (onversion pro/e(ts. In ,a(t, it a&&o-e UIG to pro(ee -it* t*e eve&op)ent o, t*e +o&, (o$rse p$rs$ant to t*e LDA. It )ere&' restraine SBMA ,ro) ta;in+ over t*e +o&, (o$rse. C&ear&', t*e assai&e RTC Or er i not see; to e&a' or *a)per t*e (onversion o, t*e ,or)er nava& %ase into (ivi&ian $ses. Moreover, t*e assai&e Brit o, Pre&i)inar' In/$n(tion -as iss$e in (onne(tion -it* a isp$te pertainin+ to t*e (orre(t interpretation o, t*e LDA. To ivest t*e tria& (o$rt o, t*at a$t*orit' is to +ive SBMA $n*a)pere is(retion to isre+ar its (ontra(t$a& o%&i+ations $n er t*e +$ise o, i)p&e)entin+ its pro/e(ts. In ee , Se(tion @7 o, RA A@@A s*o$& not %ar /$ i(ia& s(r$tin' o, irre+$&arities a&&e+e &' (o))itte %' SBMA. 4%9 Ri+*t o, Respon ents to In/$n(tive Re&ie, A -rit o, )an ator' in/$n(tion re:$ires t*e per,or)an(e o, a parti($&ar a(t an is +rante on&' $pon a s*o-in+ o, t*e ,o&&o-in+ re:$isites> 07. T*e invasion o, t*e ri+*t is )ateria& an s$%stantia&? @. T*e ri+*t o, a (o)p&ainant is (&ear an $n)ista;a%&e. <. T*ere is an $r+ent an per)anent ne(essit' ,or t*e -rit to prevent serio$s a)a+e.0 Be(a$se it (o))an s t*e per,or)an(e o, an a(t, a )an ator' in/$n(tion oes not preserve t*e stat$s :$o @8 an is t*$s )ore (a$tio$s&' re+ar e t*an a )ere pro*i%itive

in/$n(tion. A((or in+&', t*e iss$an(e o, t*e ,or)er is /$sti,ie on&' in a (&ear (ase, ,ree ,ro) o$%t an isp$te. Ne(essari&', t*e app&i(ant *as t*e %$r en o, s*o-in+ t*at it is entit&e to t*e -rit. In t*is (ase, t*e ,irst assai&e RTC Or er ate O(to%er <, 788A -as e,,e(tive&' a pre&i)inar' )an ator' in/$n(tion %e(a$se it 0 ire(te F*erein petitionersG to restore pea(e,$&&' to t*e F*erein respon entsG possession o, t*e +o&, (o$rse, (&$%*o$se, o,,i(es an ot*er app$rtenan(es s$%/e(t o, t*e Lease an Deve&op)ent A+ree)ent %et-een UIG Tai-an an t*e SBMA.0 In a ition, it -as a&so a pro*i%itive in/$n(tion %e(a$se it restraine petitioners ,ro) o%str$(tin+ or )e &in+ in t*e operation an )ana+e)ent o, t*e isp$te propert'. T*e re(or s, *o-ever, o not s*o- t*at *erein respon ents -ere in $%ita%&' entit&e to a )an ator' -rit. Un er t*e LDA, -e ,in no proo, o, a 0(&ear an $n)ista;a%&e ri+*t0 on t*eir part to (ontin$e t*e operation an t*e eve&op)ent o, t*e +o&, (o$rse. In ee , t*e RTC %ase its assai&e Or er )ain&' on t*e +ro$n t*at SBMA1s ta;eover -as 0not &e+a&&' /$sti,ia%&e.0 T*$s, it r$&e in t*is -ise> 03ro) a&& t*e ,ore+oin+, t*e Co$rt is o, t*e (onsi ere vie- t*at t*e ,or(i%&e ta;e over F%'G t*e FpetitionersG o, t*e +o&, (o$rse an its app$rtenan(es is not &e+a&&' /$sti,ia%&e. Base on t*e evi en(e a $(e $rin+ t*e *earin+, t*e Frespon entsG *ave esta%&is*e a (&ear ri+*t to (ontin$e t*e operation an )ana+e)ent o, t*e +o&, (o$rse, an . . . (ontin$e -it**o& in+ o, t*e pre)ises %' t*e FpetitionersG -i&& res$&t to irrepara%&e a)a+es to Frespon entsG.0 3$rt*er)ore, t*e CA i not )a;e an' (ate+ori(a& r$&in+ t*at respon ents esta%&is*e a 0(&ear an $n)ista;a%&e ri+*t0 to t*e Brit. Li;e t*e RTC, it e)p*asi.e t*at t*ere -as 0no rationa&i.ation0 ,or SBMA1s e2tra/$ i(ia& ta;eover o, t*e isp$te propert'. In ot*er -or s, %ot* t*e CA an t*e tria& (o$rt e,,e(tive&' r$&e t*at respon ents are entit&e to t*e Brit o, Man ator' In/$n(tion %e(a$se SBMA1s a(tion -as not in a((or an(e -it* &a-. On t*is point, -e isa+ree -it* t*e tria& an t*e appe&&ate (o$rts. As -e -i&& no- s*o-, t*ere is &e+a& %asis ,or petitioners1 res(ission o, t*e (ontra(t an ta;eover o, t*e propert' -it*o$t an' (o$rt or er. 4(9 Le+a&it' o, SBMA1s Res(ission o, t*e LDA an Ta;eover o, t*e Propert' Be(a$se o, UIG1s ,ai&$re to (o)p&' -it* severa& o, its (ontra(t$a& $n erta;in+s, SBMA res(in e t*e LDA an too; over t*e possession, t*e operation an t*e )ana+e)ent o, t*e propert' -it*o$t an' /$ i(ia& i)pri)at$r. In oin+ so, it re&ie on t*e provisions o, t*e LDA, -*i(* -e :$ote ear&ier. T*e Co$rt o, Appea&s *e& t*at t*e e2tra/$ i(ia& res(ission o, t*e LDA -as &a-,$&, %$t t*at t*e e2tra/$ i(ia& ta;eover o, t*e propert' -as not. It re&ie on Nera v. Va(ante, in -*i(* t*e S$pre)e Co$rt *e& >

. . . A stip$&ation entit&in+ one part' to ta;e possession o, t*e &an an %$i& in+ i, t*e ot*er part' vio&ates t*e (ontra(t oes not e2 proprio vi+ore (on,er $pon t*e ,or)er t*e ri+*t to ta;e possession t*ereo, i, o%/e(te to -it*o$t /$ i(ia& intervention an eter)ination.0 It a&so (ite P$&$eta v. Mariano, -*i(* reiterate t*e a%oveJ:$ote r$&in+. T*at (ase -as p$rporte &' app&i(a%&e %e(a$se it invo&ve a si)i&ar (ontra(t$a& stip$&ation, -*i(* rea s as ,o&&o-s> 07@. T*at $pon ,ai&$re o, t*e BU"ER to ,$&,i&& an' o, t*e (on itions *erein stip$&ate , BU"ER a$to)ati(a&&' an irrevo(a%&' a$t*ori.es OBNER to re(over e2traJ/$ i(ia&&', p*'si(a& possession o, t*e &an , %$i& in+ an ot*er i)prove)ents -*i(* are s$%/e(t o, t*is (ontra(t, an to ta;e possession a&so e2tra/$ i(ia&&' -*atever persona& properties )a' %e ,o$n -it*in t*e a,oresai pre)ises ,ro) t*e ate o, sai ,ai&$re to ans-er ,or -*atever $n,$&,i&&e )onetar' o%&i+ations BU"ER )a' *ave -it* OBNER? an t*is (ontra(t s*a&& %e (onsi ere as -it*o$t ,or(e an e,,e(t a&so ,ro) sai ate? . . .0 Be(a$se P$&$eta -as a s$%se:$ent De(ision, it s$ppose &' overt$rne t*e 0 ia)etri(a&&' oppose 0 ear&ier r$&in+ in Consin+ v. !a)an re, in -*i(* t*e S$pre)e Co$rt $p*e& a (ontra(t$a& stip$&ation a$t*ori.in+ t*e s$%J&essor to ta;e possession o, t*e &ease pre)ises in (ase o, (ontra(t$a& %rea(*. As ear&ier note , t*e CA a&so r$&e t*at Consin+ -as a 0/$ i(ia& a%erration.0 Be isa+ree. At t*e o$tset, it s*o$& %e $n ers(ore t*at t*ese (ases are not 0 ia)etri(a&&' oppose 0 to ea(* ot*er. In ,a(t, t*e' (oe2ist. It s*o$& %e note a&so t*at t*e CA erre in *o& in+ t*at P$&$eta, %ein+ a &ater (ase, overt$rne Consin+. T*e CA &o+i( is ,&a-e , %e(a$se a,ter t*e pro)$&+ation o, P$&$eta, Consin+ -as reiterate in 7887 in Vira' v. IAC. Moreover, P$&$eta an Nera re(o+ni.e t*e va&i it' an t*e e,,e(tivit' o, a (ontra(t$a& provision a$t*ori.in+ t*e e2tra/$ i(ia& res(ission o, a (ontra(t an t*e (on(o)itant re(over' o, possession. Li;e Nera, P$&$eta )ere&' a e t*e :$a&i,i(ation t*at t*e stip$&ation 0*as &e+a& e,,e(t . . . -*ere t*e ot*er part' oes not oppose it. B*ere it is o%/e(te to, a /$ i(ia& eter)ination o, t*e iss$es is sti&& ne(essar'.0 Si+ni,i(ant&', t*e' i not (ate+ori(a&&' r$&e t*at s$(* stip$&ation -as voi . In ,a(t, t*e stip$&ation is &a-,$&. In Consin+, t*e Co$rt *e& t*at 0t*is ;in o, (ontra(t$a& stip$&ation is not i&&e+a&, t*ere %ein+ not*in+ in t*e &a- pros(ri%in+ s$(* ;in o, a+ree)ent.0 A,,ir)in+ t*is r$&in+, t*e Co$rt in Vira' v. IAC reiterate t*at t*e stip$&ation 0-as in t*e nat$re o, a reso&$tor' (on ition, ,or $pon t*e e2er(ise %' t*e s$%J&essor o, *is ri+*t to ta;e possession o, t*e &ease propert', t*e (ontra(t is ee)e ter)inate .0 UP v. De &os An+e&es is instr$(tive on t*is point. P$rs$ant to a stip$&ation si)i&ar to t*at in t*e present (ase, t*e Universit' o, t*e P*i&ippines 4UP9 res(in e its Lo++in+ A+ree)ent -it* ALUMCO an s$%se:$ent&' appointe anot*er (on(essionaire to ta;e over t*e &o++in+ operation. Hen(e, t*e iss$e -as 0-*et*er FPGetitioner UP (an treat its

(ontra(t -it* ALUMCO res(in e , an )a' isre+ar t*e sa)e %e,ore an' /$ i(ia& prono$n(e)ent to t*at e,,e(t.0 R$&in+ in ,avor o, UP, t*e Co$rt *e& t*at a part' (o$& en,or(e s$(* stip$&ation> 0FTG*e part' -*o ee)s t*e (ontra(t vio&ate )a' (onsi er it reso&ve or res(in e , an a(t a((or in+&', -it*o$t previo$s (o$rt a(tion, %$t it pro(ee s at its o-n ris;. 3or it is on&' t*e ,ina& /$ +)ent o, t*e (orrespon in+ (o$rt t*at -i&& (on(&$sive&' an ,ina&&' sett&e -*et*er t*e a(tion ta;en -as or -as not (orre(t in &a-. B$t t*e &a- e,inite&' oes not re:$ire t*at t*e (ontra(tin+ part' -*o %e&ieves itse&, in/$re )$st ,irst ,i&e s$it an -ait ,or a /$ +)ent %e,ore ta;in+ e2tra/$ i(ia& steps to prote(t its interest. Ot*er-ise, t*e part' in/$re %' t*e ot*er1s %rea(* -i&& *ave to passive&' sit an -at(* its a)a+es a(($)$&ate $rin+ t*e pen en(' o, t*e s$it $nti& t*e ,ina& /$ +)ent o, res(ission is ren ere -*en t*e &a- itse&, re:$ires t*at *e s*o$& e2er(ise $e i&i+en(e to )ini)i.e its o-n a)a+es.0 4ita&i(s s$pp&ie .9 T*e Co$rt a&so note t*at t*e res(ission -as 0provisiona&0 an 0s$%/e(t to s(r$tin' an revie- %' t*e proper (o$rt.0 It ,$rt*er note t*at 0i, t*e ot*er part' enies t*at res(ission is /$sti,ie , it is ,ree to resort to /$ i(ia& a(tion in its o-n %e*a&,, an %rin+ t*e )atter to (o$rt.0 It o%serve t*at t*e 0pra(ti(a& e,,e(t o, t*e stip$&ation F-asG to trans,er to t*e e,a$&ter t*e initiative o, instit$tin+ s$it, instea o, t*e res(in er.0 In t*e present (ase, it is (&ear t*at t*e s$%/e(t stip$&ation is a&&o-e %' &a-. Moreover, a part' is ,ree to en,or(e it %' res(in in+ t*e (ontra(t an re(overin+ possession o, t*e propert' even -it*o$t (o$rt intervention. B*ere it is o%/e(te to, *o-ever, a /$ i(ia& eter)ination o, t*e iss$e is sti&& ne(essar'. <= 3or(e or %&oo s*e (annot %e /$sti,ie in t*e en,or(e)ent o, t*e stip$&ation. B*ere t*e &essees o,,er p*'si(a& resistan(e, t*e &essors )a' app&' ,or a -rit o, pre&i)inar' )an ator' in/$n(tion, to -*i(* t*e' *ave a (&ear an $n)ista;a%&e ri+*t. In ee , (o$rts are t*e ,ina& ar%iters. T*$s, (ontrar' to t*e r$&in+ o, t*e CA an t*e RTC, t*ere is a rationa&i.ation an a &e+a& /$sti,i(ation ,or t*e stip$&ation a$t*ori.in+ SBMA to res(in t*e (ontra(t an to ta;e over t*e propert'. No V/347 O >e1t4o5 o5 t.e P/!t o9 Re0po57e5t0 As ear&ier o%serve , t*ere -ere severa& vio&ations o, t*e LDA, -*i(* -ere $&' reporte %' SBMA to UIG. Respon ents, *o-ever, i not en' or (ontrovert t*e). E,,e(tive&', t*ere,ore, t*e' o,,ere no va&i or s$,,i(ient o%/e(tion to SBMA1s e2er(ise o, its stip$&ate ri+*t to e2tra/$ i(ia&&' res(in t*e LDA an ta;e over t*e propert' in (ase o, )ateria& %rea(*. 3irst, t*e A)en e Co)p&aint )ere&' ar+$e t*at t*e ta;eover -as 0+ro$n e $pon a voi provision o, t*e a+ree)ent.0 It i not (ontrovert t*e +ro$n s ,or SBMA1s e2er(ise o, its ri+*ts $n er t*e s$%/e(t stip$&ation. In ee , +&arin+ -as respon ents1 ,ai&$re to en' t*e a&&e+e vio&ations o, t*e LDA.

Se(on , Respon ent UIG -as +iven severa& opport$nities %' SBMA to e2p&ain t*e a&&e+e vio&ations. Instea o, (ontrovertin+ t*e), UIG instea in i(ate its -i&&in+ness to (o)p&' -it* a&& its $n erta;in+s. Hen(e, in its 3e%r$ar' 6, 788A &etter, SBMA (a&&e its attention to severa& instan(es s*o-in+ (ontra(t$a& %rea(*. In response, UIG1s (o$nse& i not en' t*e vio&ations an instea apo&o+i.e ,or t*e e&a'. 3in in+ t*e response an t*e e2p&anation $nsatis,a(tor', SBMA, in a &etter ate Mar(* A, 788A, e(&are UIG in e,a$&t an re:$ire it to e2p&ain -*' t*e LDA s*o$& not %e ter)inate . UIG i not s$%)it an' -ritten e2p&anation. Instea , its (o$nse& (a&&e t*e SBMA (*ie, operatin+ o,,i(er to in,or) *i) o, its 0(o))it)ent to $n erta;e ane- t*e re)e ia& )eas$res re+ar in+ t*e )atter.0 In its &etter ate Septe)%er =, 788A, SBMA ire(te UIG to va(ate t*e pre)ises an to sett&e its o$tstan in+ a((o$nts. 3ina&&', on Septe)%er 7@, 788A, SBMA serve UIG a Noti(e o, C&os$re. It s*o$& %e $n ers(ore t*at $rin+ a&& t*ese e2(*an+es, UIG i not (ontrovert its a&&e+e non(o)p&ian(e -it* t*e LDA. T*ir , in t*e *earin+ ,or t*e app&i(ation ,or a -rit o, )an ator' in/$n(tion, respon ents presente t-o -itnesses> Or&an o e &a Masa, operations )ana+er o, SBGCCI? an Dani&o A&a%a o, (o)ptro&&er o, UIGDC. De &a Masa testi,ie on t*e a&&e+e ,or(i%&e ta;eover %' SBMA, -*i&e A&a%a o testi,ie t*at respon ents *a investe Q7@ )i&&ion in t*e re*a%i&itation o, t*e +o&, (o$rse. Respon ents, *o-ever, i not en' t*e vio&ations o, t*eir $n erta;in+, -*i(* -ere e2p&aine %' Att'. Ra')on P. Vent$ra. Most si+ni,i(ant, neit*er t*e CA nor t*e RTC )a e an' ,in in+ t*at t*ere -as no %rea(* on t*e part o, UIG. Li;e-ise, t*e' i not even )a;e an' o%servation t*at respon ents *a (ontroverte SBMA1s (&ai). C&ear&', respon ents1 stan -as not a va&i or s$,,i(ient o%/e(tion to SBMA1s e2er(ise o, its ri+*t. In ee , s$stainin+ t*eir (&ai) -o$& $n $&' i)inis* t*e ,or(e o, s$(* &a-,$& stip$&ation an a&&o- parties to isre+ar it at -i&& -it*o$t an' va&i reason. In t*is (ase, respon ents )isera%&' ,ai&e to +ive an' se)%&an(e o, o%/e(tion to t*e )erits o, SBMA1s a&&e+ations. Moreover, -e ,in no a e:$ate s*o-in+ o, resistan(e to SBMA1s i)p&e)entation o, t*e s$%/e(t stip$&ation. Un er t*e (ir($)stan(es, SBMA s*o-e t*at it *a a ri+*t not on&' to res(in t*e (ontra(t, %$t a&so to ta;e over t*e propert'. On t*e ot*er *an , respon ents *ave not s*o-n an' 0(&ear an $n)ista;a%&e ri+*t0 to restrain SBMA ,ro) en,or(in+ t*e (ontra(t$a& stip$&ation. In ee , t*e' *ave o,,ere no o%/e(tion to SBMA1s a&&e+ations o, (ontra(t$a& %rea(*. Bit*o$t pre/$ +in+ t*eir ri+*t to o,,er (ontrovertin+ evi en(e $rin+ t*e tria& on t*e )erits, t*e Co$rt *o& s t*at t*e' ,ai&e to o so in t*eir app&i(ation ,or a -rit o, pre&i)inar' in/$n(tion.

Ep43o62e T*e Co$rt o, Appea&s e2presse its appre*ension t*at a r$&in+ a+ainst UIG -o$& sen a )essa+e to ,orei+n investors t*at -e 0are a +ro$p o, /in+oists.0 Be o not s*are t*at vie-. !in+ois) is not an iss$e *ere. 3ar ,ro) it. In partia&&' reversin+ t*e CA, t*is Co$rt is )ere&' per,or)in+ its )an ate to o /$sti(e an to app&' t*e &a- to t*e ,a(ts o, t*e (ase. It is )ere&' a,,ir)in+ t*e )essa+e t*at in t*is (o$ntr', t*e r$&e o, &a- prevai&s? an (ontra(ts ,ree&' entere into, -*et*er %' ,orei+n or %' &o(a& investors, )$st %e (o)p&ie -it*. In ee , r$&e o, &a- an ,ait*,$&ness in t*e per,or)an(e o, (ontra(ts are (*eris*e va&$es ever'-*ere. BHERE3ORE, t*e Petition is partia&&' GRANTED, an t*e assai&e De(ision o, t*e Co$rt o, Appea&s REVERSED an SET ASIDE inso,ar as it a,,ir)e t*e Brit o, Pre&i)inar' In/$n(tion iss$e %' t*e tria& (o$rt. T*e sai Brit is *ere%' LI3TED an t*e (ase REMANDED to t*e RTC ,or tria& on t*e )erits. In t*e )eanti)e, respon ents s*a&&, $pon ,ina&it' o, t*is De(ision, 'ie& t*e possession, t*e operation an t*e )ana+e)ent o, t*e s$%/e(t propert' to SBMA. No (osts. SO ORDERED. CDAHaE Me&o, Vit$+, P$risi)a an Gon.a+aJRe'es, !!., (on($r.

FIRST DIVISION BIBIANO O. RE#NOSO, IV, petitioner, vs. &ON. COURT OF APPEALS an GENERAL CREDIT CORPORATION, respon ents. G.R. No0. 11+124?25 No8em e! 22, 2;;; S#NOPSIS So)eti)e in t*e ear&' 78DCs, t*e Co))er(ia& Cre it Corporation 4CCC9 a ,inan(in+ an invest)ent ,ir), e(i e to or+ani.e ,ran(*ise (o)panies in i,,erent parts o, t*e (o$ntr', -*erein it s*a&& *o& <CE e:$it'. E)p&o'ees o, t*e CCC -ere esi+nate as resi ent )ana+ers o, t*e ,ran(*ise (o)panies. Petitioner Bi%iano O. Re'noso, IV -as esi+nate as t*e resi ent )ana+er o, t*e ,ran(*ise (o)pan' in L$e.on Cit' ;no-n as CCCJLC. CCCJLC entere into an e2(&$sive )ana+e)ent (ontra(t -it* CCC -*erein it -as stip$&ate t*at CCCJLC s*a&& se&&, is(o$nt an Hor assi+n its re(eiva%&es to CCC. S$%se:$ent&', *o-ever, t*is is(o$ntin+ arran+e)ent -as is(ontin$e p$rs$ant to t*e soJ(a&&e 0DOSRI R$&e0 o, t*e Centra& Ban; -*i(* pro*i%ite t*e &en in+ o, ,$n s %' (orporations to its ire(tors, o,,i(ers, sto(;*o& ers an ot*er persons -it* re&ate interests t*erein. D$e to t*e ne- restri(tions, CCC e(i e to ,or) CCCJE:$it' Corporation. Un er t*e ne- setJ$p, severa& o,,i(ia&s o, CCC, in(&$ in+ petitioner Re'noso, %e(a)e e)p&o'ees o, CCCJE:$it'. B*i&e. *e (ontin$e to %e t*e Resi ent Mana+er o, CCCJLC, *e re- *is sa&aries an a&&o-an(es ,ro) CCCJE:$it'. Petitioner, in or er to %oost t*e %$siness a(tivities o, CCCJLC, eposite *is persona& ,$n s it t*e (o)pan'> In ret$rn, CCCJLC iss$e to *i) its interestJ%earin+ pro)issor' notes. On A$+$st 7K, 78=C, a (o)p&aint ,or s$) o, )one' -it* pre&i)inar' atta(*)ent -as instit$te a+ainst *i) %' CCCJLC %e,ore t*e t*en Co$rt o, 3irst Instan(e o, Ri.a&, a&&e+in+ t*at petitioner e)%e..&e t*e ,$n s o, CCCJLC a)o$ntin+ to P7,<CC,K8<.77. B$t petitioner asserte t*at t*e sai a)o$nt represente *is )one' p&a(e)ent in CCCLC as s*o-n %' @< (*e(;s -*i(* *e iss$e to t*e sai (o)pan'. In t*e )eanti)e, *e -as is)isse ,ro) *is e)p&o')ent %' CCCJE:$it'. T*e tria& (o$rt ren ere a e(ision in ,avor o, t*e petitioner. T*e e(ision %e(a)e ,ina& an , a((or in+&', a Brit o, E2e($tion -as iss$e . Ho-ever, t*e /$ +)ent re)aine $nsatis,ie , pro)ptin+ petitioner to ,i&e a Motion ,or A&ias Brit o, E2e($tion. Mean-*i&e, in 78=<, CCC %e(a)e ;no-n as t*e Genera& Cre it Corporation 4GCC9. T*e Re+iona& Tria& Co$rt o, L$e.on Cit' t*en iss$e an Or er ire(tin+ GCC to ,i&e its (o))ent on petitioner1s )otion. GCC a&&e+e t*at it -as not a part' to t*e (ase. Conse:$ent&', t*e tria& (o$rt or ere t*e iss$an(e o, an a&ias o, -rit o, e2e($tion. T*$s, GCC instit$te a petition ,or (ertiorari -it* t*e Co$rt o, Appea&s -*i(* n$&&i,ie t*e or er o, t*e tria& (o$rt. Hen(e, t*is petition. T*e Co$rt r$&e t*at t*e e,ense o, separateness -i&& %e isre+ar e -*ere t*e %$siness a,,airs o, a s$%si iar' (orporation are so (ontro&&e %' t*e )ot*er (orporation to t*e e2tent t*at it %e(o)es an instr$)ent or a+ent o, its parent. B$t even -*en t*ere is o)inan(e over t*e a,,airs o, t*e s$%si iar', t*e o(trine o, pier(in+ t*e vei& o, (orporate ,i(tion app&ies on&' -*en s$(* ,i(tion is $se to e,eat p$%&i( (onvenien(e, /$sti,' -ron+, prote(t ,ra$ or e,en (ri)e. 3a(t$a&&' an &e+a&&', t*e CCC *a o)inant (ontro& o, t*e

%$siness operations o, CCCJLC. T*e e2(&$sive )ana+e)ent (ontra(t ins$re t*at CCCJ LC -o$& %e )ana+e an (ontro&&e %' CCC an -o$& not eviate ,ro) t*e (o))an s o, t*e )ot*er (orporation. In a ition, CCC appointe its o-n e)p&o'ee, petitioner, as t*e resi ent )ana+er o, CCCJLC. T*ere -ere ot*er in i(ations in t*e re(or -*i(* attest to t*e app&i(a%i&it' o, t*e i entit' r$&e in t*is (ase, na)e&'> t*e $nit' o, interests, )ana+e)ent, an (ontro&? t*e trans,er o, ,$n s to s$it t*eir in ivi $a& (orporate (onvenien(es? an t*e o)inan(e o, po&i(' an pra(ti(e %' t*e )ot*er (orporation ins$re t*at CCCJLC -as an instr$)enta&it' or a+en(' o, CCC. A (o$rt /$ +)ent %e(o)es $se&ess an ine,,e(tive i, t*e e)p&o'er, in t*is (ase CCC as a )ot*er (orporation, is p&a(e %e'on t*e &e+a& rea(* o, t*e /$ +)ent (re itor. T*e e(ision o, t*e Co$rt o, Appea&s -as REVERSED an SET ASIDE. S#LLABUS 1. (ERCANTILE LA$% CORPORATION LA$% CORPORATION% DEFINED. # A (orporation is an arti,i(ia& %ein+ (reate %' operation o, &a-, *avin+ t*e ri+*t o, s$((ession an t*e po-ers, attri%$tes, an properties e2press&' a$t*ori.e %' &aor in(i ent to its e2isten(e. It is an arti,i(ia& %ein+ investe %' &a- -it* a persona&it' separate an istin(t ,ro) t*ose o, t*e persons (o)posin+ it as -e&& as ,ro) t*at o, an' ot*er &e+a& entit' to -*i(* it )a' %e re&ate . It -as evo&ve to )a;e possi%&e t*e a++re+ation an asse)%&in+ o, *$+e a)o$nts o, (apita& $pon -*i(* %i+ %$siness epen s. It a&so *as t*e a vanta+e o, nonJ epen en(e on t*e &ives o, t*ose -*o (o)pose it even as it en/o's (ertain ri+*ts an (on $(ts a(tivities o, nat$ra& persons. 2. ID.% ID.% PIERCING T&E VEIL OF CORPORATE ENTIT#% CORPORATE FICTION &AS TO BE DISREGARDED $&EN NECESSAR# IN T&E INTEREST OF JUSTICE. # Pre(ise&' %e(a$se t*e (orporation in s$(* a preva&ent an o)inatin+ ,a(tor in t*e %$siness &i,e o, t*e (o$ntr', t*e &a- *as to &oo; (are,$&&' into t*e e2er(ise o, po-ers %' t*ese arti,i(ia& persons it *as (reate . An' pier(in+ o, t*e (orporate vei& *as to %e one -it* (a$tion. Ho-ever, t*e Co$rt -i&& not *esitate to $se its s$pervisor' an a /$ i(ative po-ers -*ere t*e (orporate ,i(tion is $se as an $n,air evi(e to a(*ieve an ine:$ita%&e res$&t, e,ra$ (re itors, eva e (ontra(ts an o%&i+ations, or to s*ie& it ,ro) t*e e,,e(ts o, a (o$rt e(ision. T*e (orporate ,i(tion *as to %e isre+ar e -*en ne(essar' in t*e interest o, /$sti(e. In 3irst P*i&ippine Internationa& Ban; vs. Co$rt o, Appea&s, et a&., -e *e& > 0B*en t*e ,i(tion is $r+e as a )eans o, perpetratin+ a ,ra$ or an i&&e+a& a(t or as a ve*i(&e ,or t*e evasion o, an e2istin+ o%&i+ation, t*e (ir($)vention o, stat$tes, t*e a(*ieve)ent or per,e(tion o, a )onopo&' or +enera&&' t*e perpetration o, ;naver' or (ri)e, t*e vei& -it* -*i(* t*e &a(overs an iso&ates t*e (orporation ,ro) t*e )e)%ers or sto(;*o& ers -*o (o)pose it -i&& %e &i,te to a&&o- ,or its (onsi eration )ere&' as an a++re+ation o, in ivi $a&s.0 A&so in t*e a%oveJ(ite (ase, -e state t*at t*is Co$rt *as pier(e t*e vei& o, (orporate ,i(tion in n$)ero$s (ases -*ere it -as $se , a)on+ ot*ers, to avoi /$ +)ent (re it? to avoi in(&$sion o, (orporate assets as part o, t*e estate o, a e(e ent? to avoi &ia%i&it' arisin+ ,ro) e%t? -*en )a e $se o, as a s*ie& to perpetrate ,ra$ an Hor (on,$se &e+iti)ate iss$es? or to pro)ote $n,air o%/e(tives or ot*er-ise to s*ie& t*e).

*. ID.% ID.% ID.% APPLIES ONL# $&EN SUC& FICTION IS USED TO DEFEAT PUBLIC CONVENIENCE, JUSTIF# $RONG, PROTECT FRAUD OR DEFEND CRI(E. @ T*e e,ense o, separateness -i&& %e isre+ar e -*ere t*e %$siness a,,airs o, a s$%si iar' (orporation are so (ontro&&e %' t*e )ot*er (orporation to t*e e2tent t*at it %e(o)es an instr$)ent or a+ent o, its parent. B$t even -*ere t*ere is o)inan(e over t*e a,,airs o, t*e s$%si iar', t*e o(trine o, pier(in+ t*e vei& o, (orporate ,i(tion app&ies on&' -*en s$(* ,i(tion is $se to e,eat p$%&i( (onvenien(e, /$sti,' -ron+, prote(t ,ra$ or e,en (ri)e. Be state in To)as Lao Constr$(tion v. Nationa& La%or Re&ations Co))ission, t*at t*e &e+a& ,i(tion o, a (orporation %ein+ a /$ri i(a& entit' -it* a istin(t an separate persona&it' -as envisa+e ,or (onvenien(e an to serve /$sti(e. T*ere,ore, it s*o$& not %e $se as a s$%ter,$+e to (o))it in/$sti(e an (ir($)vent t*e &a-. 4. ID.% ID.% ID.% SEPARATE CORPORATE C&ARACTER OF (OT&ER CORPORATION AND ITS SUBSIDIAR# CONTINUES FOR LEGITI(ATE OBJECTIVES, &O$EVER, IT IS PIERCED IN ORDER TO RE(ED# INJUSTICE. # It is o%vio$s t*at t*e $se %' CCCJLC o, t*e sa)e na)e o, Co))er(ia& Cre it Corporation -as inten e to p$%&i(&' i enti,' it as a (o)ponent o, t*e CCC +ro$p o, (o)panies en+a+e in one an t*e sa)e %$siness, i.e., invest)ent an ,inan(in+. Asi e ,ro) CCCJL$e.on Cit', ot*er ,ran(*ise (o)pan' -ere or+ani.e s$(* as CCCJNort* Mani&a an CCCJCa+a'an Va&&e'. T*e or+ani.ation o, s$%si iar' (orporations as -*at -as one *ere is $s$a&&' resorte to ,or t*e a++r$pation o, (apita&, t*e a%i&it' to (over )ore territor' an pop$&ation, t*e e(entra&i.ation o, a(tivities %est e(entra&i.e , an t*e se($rin+ o, t*e ot*er &e+iti)ate a vanta+es. B$t -*en t*e )ot*er (orporation an its s$%si iar' (ease to a(t in +oo ,ait* an *onest %$siness /$ +)ent, -*en t*e (orporate evi(e is $se %' t*e parent to avoi its &ia%i&it' ,or &e+iti)ate o%&i+ations o, t*e s$%si iar', an -*en t*e (orporate ,i(tion is $se to perpetrate ,ra$ or pro)ote in/$sti(e, t*e &a- steps in to re)e ' t*e pro%&e). B*en t*at *appens, t*e (orporate (*ara(ter is not ne(essari&' a%ro+ate . It (ontin$es ,or &e+iti)ate o%/e(tives. Ho-ever, it is pier(e in or er to re)e ' in/$sti(e, s$(* as t*at in,&i(te in t*is (ase. 5. ID.% ID.% ID.% IDENTIT# RULE% APPLIED IN CASE AT BAR . # 3a(t$a&&' an &e+a&&', t*e CCC *a o)inant (ontro& o, t*e %$siness operations o, CCCJLC. T*e e2(&$sive )ana+e)ent (ontra(t ins$re t*at CCCJLC -o$& %e )ana+e an (ontro&&e %' CCC an -o$& not eviate ,ro) t*e (o))an s o, t*e )ot*er (orporation. In a ition to t*e e2(&$sive )ana+e)ent (ontra(t, CCC appointe its o-n e)p&o'ee, petitioner, as t*e resi ent )ana+er o, CCCJLC. Petitioner1s esi+nation as 0resi ent )ana+er0 i)p&ies t*at *e -as p&a(e in CCCJLC %' a s$perior a$t*orit'. In ,a(t, even a,ter *is assi+n)ent to t*e s$%si iar' (orporation, petitioner (ontin$e to re(eive *is sa&aries, a&&o-an(es, an %ene,its ,ro) CCC, -*i(* &ater %e(a)e respon ent Genera& Cre it Corporation. Not on&' t*at. Petitioner an t*e ot*er per)anent e)p&o'ees o, CCCJLC -ere :$a&i,ie )e)%ers an parti(ipants o, t*e E)p&o'ees Pension P&an o, CCC. T*ere are ot*er in i(ations in t*e re(or -*i(* attest to t*e app&i(a%i&it' o, t*e i entit' r$&e in t*is (ase, na)e&'> t*e $nit' o, interests, )ana+e)ent, an (ontro&? t*e trans,er o, ,$n s to s$it t*eir in ivi $a& (orporate (onvenien(es? an t*e o)inan(e o, po&i(' an pra(ti(e %' t*e )ot*er (orporation ins$re t*at CCCJLC -as an instr$)enta&it' or a+en(' o, CCC. As petitioner

stresses, %ot* CCC an CCCJLC -ere en+a+e in t*e sa)e prin(ipa& &ine o, %$siness invo&vin+ a sin+&e transa(tion pro(ess. Un er t*eir is(o$ntin+ arran+e)ents, CCC ,inan(e t*e operations o, CCCJLC. T*e s$%si iar' so& , is(o$nte , or assi+ne its a((o$nts re(eiva%&es to CCC. T*e testi)on' o, !ose&ito D. Li-ana+, a((o$ntant an a$ itor o, CCC sin(e 78A7, s*o-s t*e pervasive an intensive a$ itin+ ,$n(tion o, CCC over CCCJLC. T*e t-o (orporations a&so s*are t*e sa)e o,,i(e spa(e. CCCJLC *a no o,,i(e o, its o-n. T*e (o)p&aint in Civi& Case No. LJ<CK=<, instit$te %' CCCJLC, -as even veri,ie %' t*e ire(torJrepresentative o, CCC. T*e &a-'ers -*o ,i&e t*e (o)p&aint an a)en e (o)p&aint -ere a&& inJ*o$se &a-'ers o, CCC. +. ID.% ID.% ID.% COURT JUDG(ENT BECO(E USELESS AND INEFFECTIVE IF T&E E(PLO#ER IS PLACED BE#OND T&E LEGAL REAC& OF T&E JUDG(ENT CREDITOR% CASE AT BAR . # Parap*rasin+ t*e r$&in+ in C&aparo&s v. Co$rt o, In $stria& Re&ations, reiterate in Con(ept B$i& ers In(. v. Nationa& La%or Re&ations, it is ver' o%vio$s t*at respon ent 0see;s t*e prote(tive s*ie& o, a (orporate ,i(tion -*ose vei& t*e present (ase (o$& , an s*o$& , %e pier(e as it -as e&i%erate&' an )a&i(io$s&' esi+ne to eva e its ,inan(ia& o%&i+ation o, its e)p&o'ees.0 I, t*e (orporate ,i(tion is s$staine , it %e(o)es a *an ' e(eption to avoi a /$ +)ent e%t an -or; an in/$sti(e. T*e e(ision raise to $s ,or revie- is an invitation to )$&tip&i(it' o, &iti+ation. As -e state in Is&a)i( Dire(torate vs. Co$rt o, Appea&s, t*e en o, /$sti(e are not serve i, ,$rt*er &iti+ation is en(o$ra+e -*en t*e iss$e is eter)ina%&e %ase on t*e re(or s. A (o$rt /$ +)ent %e(o)e $se&ess an ine,,e(tive i, t*e e)p&o'er, in t*is (ase CCC as a )ot*er (orporation, is p&a(e %e'on t*e &e+a& rea(* o, t*e /$ +)ent (re itor -*o, a,ter protra(te &iti+ation, *as %een ,o$n entit&e to positive re&ie,. Co$rts *ave %een or+ani.e to p$t an en to (ontrovers'. T*is p$rpose s*o$& not %e ne+ate %' an inapp&i(a%&e an -ron+ $se o, t*e ,i(tion o, t*e (orporate vei&. DECISION #NARES?SANTIAGO, J pAssai&e in t*is petition ,or revie- is t*e (onso&i ate e(ision o, t*e Co$rt o, Appea&s ate !$&' A, 7886, -*i(* reverse t*e separate e(isions o, t*e Re+iona& Tria& Co$rt o, Pasi+ Cit' an t*e Re+iona& Tria& Co$rt o, L$e.on Cit' in t-o (ases %et-een petitioner Re'noso an respon ent Genera& Cre it Corporation 4GCC9. So)eti)e in t*e ear&' 78DCs, t*e Co))er(ia& Cre it Corporation 4*ereina,ter, 0CCC09, a ,inan(in+ an invest)ent ,ir), e(i e to or+ani.e ,ran(*ise (o)panies in i,,erent parts o, t*e (o$ntr', -*erein it s*a&& *o& t*irt' per(ent 4<CE9 e:$it'. E)p&o'ees o, t*e CCC -ere esi+nate as resi ent )ana+ers o, t*e ,ran(*ise (o)panies. Petitioner Bi%iano O. Re'noso, IV -as esi+nate as t*e resi ent )ana+er o, t*e ,ran(*ise (o)pan' in L$e.on Cit', ;no-n as t*e Co))er(ia& Cre it Corporation o, L$e.on Cit' 4*ereina,ter, 0CCCJ LC09. CCCJLC entere into an e2(&$sive )ana+e)ent (ontra(t -it* CCC -*ere%' t*e &atter -as +rante t*e )ana+e)ent an ,$&& (ontro& o, t*e %$siness a(tivities o, t*e ,or)er.

Un er t*e (ontra(t, CCCJLC s*a&& se&&, is(o$nt an Hor assi+n its re(eiva%&es to CCC. S$%se:$ent&', *o-ever, t*is is(o$ntin+ arran+e)ent -as is(ontin$e p$rs$ant to t*e soJ(a&&e 0DOSRI R$&e,0 pro*i%itin+ t*e &en in+ o, ,$n s %' (orporations to its ire(tors, o,,i(ers, sto(;*o& ers an ot*er persons -it* re&ate interests t*erein. On a((o$nt o, t*e ne- restri(tions i)pose %' t*e Centra& Ban; po&i(' %' virt$e o, t*e DOSRI R$&e, CCC e(i e to ,or) CCC E:$it' Corporation, 4*ereina,ter, 0CCCJ E:$it'09, a -*o&&'Jo-ne s$%si iar', to -*i(* CCC trans,erre its t*irt' 4<CE9 per(ent e:$it' in CCCJLC, to+et*er -it* t-o seats in t*e &atter1s Boar o, Dire(tors. Un er t*e ne- setJ$p, severa& o,,i(ia&s o, Co))er(ia& Cre it Corporation, in(&$ in+ petitioner Re'noso, %e(a)e e)p&o'ees o, CCCJE:$it'. B*i&e petitioner (ontin$e to %e t*e Resi ent Mana+er o, CCCJLC, *e re- *is sa&aries an a&&o-an(es ,ro) CCCJ E:$it'. 3$rt*er)ore, a&t*o$+* an e)p&o'ee o, CCCJE:$it', petitioner, as -e&& as a&& e)p&o'ees o, CCCJLC, %e(a)e :$a&i,ie )e)%ers o, t*e Co))er(ia& Cre it Corporation E)p&o'ees Pension P&an. As Resi ent Mana+er o, CCCJLC, petitioner oversa- t*e operations o, CCCJLC an s$pervise its e)p&o'ees. T*e %$siness a(tivities o, CCCJLC pertain to t*e a((eptan(e o, ,$n s ,ro) epositors -*o are iss$e interestJ%earin+ pro)issor' notes. T*e a)o$nts eposite are t*en &oane o$t to vario$s %orro-ers. Petitioner, in or er to %oost t*e %$siness a(tivities o, CCCJLC, eposite *is persona& ,$n s in t*e (o)pan'. In ret$rn, CCCJLC iss$e to *i) its interestJ%earin+ pro)issor' notes. On A$+$st 7K, 78=C, a (o)p&aint ,or s$) o, )one' -it* pre&i)inar' atta(*)ent, o(;ete as Civi& Case No. LJ<CK=<, -as instit$te in t*e t*en Co$rt o, 3irst Instan(e o, Ri.a& %' CCCJLC a+ainst petitioner, -*o *a in t*e )eanti)e %een is)isse ,ro) *is e)p&o')ent %' CCCJE:$it'. T*e (o)p&aint -as s$%se:$ent&' a)en e in or er to in(&$ e Hi e&ita N$va&, petitioner1s -i,e, as a part' e,en ant. T*e (o)p&aint a&&e+e t*at petitioner e)%e..&e t*e ,$n s o, CCCJLC a)o$ntin+ to P7,<CC,K8<.77. O$t o, t*is a)o$nt, at &east PD<C,CCC.CC -as $se ,or t*e p$r(*ase o, a *o$se an &ot &o(ate at No. 7@ Ma(opa Street, Va&&e Ver e I, Pasi+ Cit'. T*e propert' -as )ort+a+e to CCC, an -as &ater ,ore(&ose . In *is a)en e Ans-er, petitioner enie *avin+ $n&a-,$&&' $se ,$n s o, CCCJLC an asserte t*at t*e s$) o, P7,<CC,K8<.77 represente *is )one' p&a(e)ents in CCCJLC, as s*o-n %' t-ent'Jt*ree 4@<9 (*e(;s -*i(* *e iss$e to t*e sai (o)pan'. T*e (ase -as s$%se:$ent&' trans,erre to t*e Re+iona& Tria& Co$rt o, L$e.on Cit', Bran(* =D, p$rs$ant to t*e !$ i(iar' Reor+ani.ation A(t o, 78=C. On !an$ar' 76, 78=K, t*e tria& (o$rt ren ere its e(ision, t*e e(reta& portion o, -*i(* states> Pre)ises (onsi ere , t*e Co$rt ,in s t*e (o)p&aint -it*o$t )erit. A((or in+&', sai (o)p&aint is *ere%' DISMISSED.

B' reason o, sai (o)p&aint, e,en ant Bi%iano Re'noso IV s$,,ere *$)i&iation an )enta& an+$is*.

e+ra ation,

On t*e (o$nter(&ai), -*i(* t*e Co$rt ,in s to %e )eritorio$s, p&ainti,, (orporation is *ere%' or ere > a9 to pa' e,en ant t*e s$) o, P7=K,CCC.CC p&$s 76E interest per ann$) ,ro) O(to%er @, 78=C $nti& ,$&&' pai ? %9 to pa' e,en ant P<,D<8,6AC.=@ p&$s interest t*ereon at t*e rate o, 76E per ann$) ,ro) !$ne @6, 78=7, t*e ate o, ,i&in+ o, A)en e Ans-er, $nti& ,$&&' pai ? ,ro) t*is a)o$nt )a' %e e $(te t*e re)ainin+ o%&i+ation o, e,en ant $n er t*e pro)issor' note o, O(to%er @6, 78AA, in t*e s$) o, P8,A<=.CC p&$s pena&t' at t*e rate o, 7E per )ont* ,ro) De(e)%er @6, 78AA $nti& ,$&&' pai ? (9 to pa' e,en ants P@CC,CCC.CC as )ora& a)a+es? 9 to pa' e,en ants P7CC,CCC.CC as e2e)p&ar' a)a+es? e9 to pa' e,en ants P@K,CCC.CC as an ,or attorne'1s ,ees? p&$s (osts o, t*e s$it. SO ORDERED. Bot* parties appea&e to t*e t*en Inter)e iate Appe&&ate Co$rt. T*e appea& o, Co))er(ia& Cre it Corporation o, L$e.on Cit' -as is)isse ,or ,ai&$re to pa' o(;et ,ees. Petitioner, on t*e ot*er *an , -it* re- *is appea&. Hen(e, t*e e(ision %e(a)e ,ina& an , a((or in+&', a Brit o, E2e($tion -as iss$e on !$&' @6, 78=8. Ho-ever, t*e /$ +)ent re)aine $nsatis,ie , pro)ptin+ petitioner to ,i&e a Motion ,or A&ias Brit o, E2e($tion, E2a)ination o, !$ +)ent De%tor, an to Brin+ 3inan(ia& Re(or s ,or E2a)ination to Co$rt. CCCJLC ,i&e an Opposition to petitioner1s )otion, a&&e+in+ t*at t*e possession o, its pre)ises an re(or s *a %een ta;en over %' CCC. Mean-*i&e, in 78=<, CCC %e(a)e ;no-n as t*e Genera& Cre it Corporation. On Nove)%er @@, 7887, t*e Re+iona& Tria& Co$rt o, L$e.on Cit' iss$e an Or er ire(tin+ Genera& Cre it Corporation to ,i&e its (o))ent on petitioner1s )otion ,or a&ias -rit o, e2e($tion. A Genera& Cre it Corporation ,i&e a Spe(ia& Appearan(e an Opposition on De(e)%er @, 7887, = a&&e+in+ t*at it -as not a part' to t*e (ase, an t*ere,ore petitioner s*o$& ire(t *is (&ai) a+ainst CCCJLC an not Genera& Cre it Corporation. Petitioner ,i&e *is rep&',statin+ t*at t*e CCCJLC is an a /$n(t instr$)enta&it', (on $it an a+en(' o, CCC. 3$rt*er)ore, petitioner invo;e t*e e(ision o, t*e Se($rities an E2(*an+e Co))ission in SEC Case No. @K=7, entit&e , 0Ave&ina G. Ra)oso, et a&., Petitioner vers$s Genera& Cre it Corp., et a&., Respon ents,0 -*ere it -as e(&are t*at Genera& Cre it Corporation, CCCJE:$it' an ot*er ,ran(*ise (o)panies in(&$ in+ CCCJLC -ere e(&are as one (orporation.

On De(e)%er 8, 7887, t*e Re+iona& Tria& Co$rt o, L$e.on Cit' or ere t*e iss$an(e o, an a&ias -rit o, e2e($tion. On De(e)%er @C, 7887, Genera& Cre it Corporation ,i&e an O)ni%$s Motion, a&&e+in+ t*at SEC Case No. @K=7 -as sti&& pen in+ appea&, an )aintainin+ t*at t*e &ev' on properties o, t*e Genera& Cre it Corporation %' t*e ep$t' s*eri,, o, t*e (o$rt -as erroneo$s. In *is Opposition to t*e O)ni%$s Motion, petitioner insiste t*at Genera& Cre it Corporation is /$st t*e ne- na)e o, Co))er(ia& Cre it Corporation? *en(e, Genera& Cre it Corporation an Co))er(ia& Cre it Corporation s*o$& %e treate as one an t*e sa)e entit'. On 3e%r$ar' 7<, 788@, t*e Re+iona& Tria& Co$rt o, L$e.on Cit' enie t*e O)ni%$s Motion. On Mar(* K, 788@, it iss$e an Or er ire(tin+ t*e iss$an(e o, an a&ias -rit o, e2e($tion. Previo$s&', on 3e%r$ar' @7, 788@, Genera& Cre it Corporation instit$te a (o)p&aint %e,ore t*e Re+iona& Tria& Co$rt o, Pasi+ a+ainst Bi%iano Re'noso, IV an E +ar o C. Tanan+(o, in *is (apa(it' as Dep$t' S*eri,, o, L$e.on Cit', o(;ete as Civi& Case No. D7AAA, pra'in+ t*at t*e &ev' on its par(e& o, &an &o(ate in Pasi+, Metro Mani&a an (overe %' Trans,er Certi,i(ate o, Tit&e No. @886C %e e(&are n$&& an voi , an t*at e,en ant s*eri,, %e en/oine ,ro) (onso&i atin+ o-ners*ip over t*e &an an ,ro) ,$rt*er &ev'in+ on ot*er properties o, Genera& Cre it Corporation to ans-er ,or an' &ia%i&it' $n er t*e e(ision in Civi& Case No. LJ<CK=<. T*e Re+iona& Tria& Co$rt o, Pasi+, Bran(* 7DA, i not iss$e a te)porar' restrainin+ or er. T*$s, Genera& Cre it Corporation instit$te t-o 4@9 petitions ,or (ertiorari -it* t*e Co$rt o, Appea&s, o(;ete as CAJG.R. SP No. @AK7= 7K an CAJG.R. SP No. @AD=<. T*ese (ases -ere &ater (onso&i ate . On !$&' A, 7886, t*e Co$rt o, Appea&s ren ere a e(ision in t*e t-o (onso&i ate (ases, t*e ispositive portion o, -*i(* rea s> BHERE3ORE, in SP No. @AK7= -e e(&are t*e iss$e o, t*e respon ent (o$rt1s re,$sa& to iss$e a restrainin+ or er as *avin+ %een ren ere )oot %' o$r Reso&$tion o, A Apri& 788@ -*i(*, %' -a' o, in/$n(tive re&ie,, provi e t*at 0t*e respon ents an t*eir representatives are *ere%' en/oine ,ro) (on $(tin+ an a$(tion sa&e 4on e2e($tion9 o, petitioner1s properties as -e&& as initiatin+ si)i&ar a(ts o, &ev'in+ 4$pon9 an se&&in+ on e2e($tion ot*er properties o, sai petitioner0. T*e in/$n(tion t*$s +rante , as )o i,ie %' t*e -or s in parent*esis, s*a&& re)ain in ,or(e $nti& Civi& Case No. D7AAA s*a&& *ave %een ,ina&&' ter)inate . In SP No. @AD=<, -e +rant t*e petition ,or (ertiorari an a((or in+&' NULLI3" an SET ASIDE, ,or *avin+ %een iss$e in e2(ess o, /$ris i(tion, t*e Or er o, 7< 3e%r$ar' 788@ in Civi& Case No. LJ<CK=< as -e&& as an' ot*er or er or pro(ess t*ro$+* -*i(* t*e petitioner is )a e &ia%&e $n er t*e /$ +)ent in sai Civi& Case No. LJ<CK=<. No a)a+es an no (osts.

SO ORDERED. Hen(e, t*is petition ,or revie- an(*ore on t*e ,o&&o-in+ ar+$)ents> 7. THE HONORABLE COURT O3 APPEALS ERRED IN CAJG.R SP NO. @AD=< BHEN IT NULLI3IED AND SET ASIDE THE 7< 3EBRUAR" 788@ ORDER AND OTHER ORDERS OR PROCESS O3 BRANCH =D O3 THE REGIONAL TRIAL COURT O3 LUEPON CIT" THROUGH BHICH GENERAL CREDIT CORPORATION IS MADE LIABLE UNDER THE !UDGMENT THAT BAS RENDERED IN CIVIL CASE NO. LJ<CK=<. @. THE HONORABLE COURT O3 APPEALS ERRED IN CAJG.R SP NO. @AK7= BHEN IT EN!OINED THE AUCTION SALE ON EOECUTION O3 THE PROPERTIES O3 GENERAL CREDIT CORPORATION AS BELL AS INITIATING SIMILAR ACTS O3 LEV"ING UPON AND SELLING ON EOECUTION O3 OTHER PROPERTIES O3 GENERAL CREDIT CORPORATION. <. THE HONORABLE COURT O3 APPEALS ERRED IN HOLDING THAT GENERAL CREDIT CORPORATION IS A STRANGER TO CIVIL CASE NO. LJ <CK=<, INSTEAD O3, DECLARING THAT COMMERCIAL CREDIT CORPORATION O3 LUEPON CIT" IS THE ALTER EGO, INSTRUMENTALIT", CONDUIT OR AD!UNCT O3 COMMERCIAL CREDIT CORPORATION AND ITS SUCCESSOR GENERAL CREDIT CORPORATION. At t*e o$tset, it )$st %e stresse t*at t*ere is no &on+er an' (ontrovers' over petitioner1s (&ai)s a+ainst *is ,or)er e)p&o'er, CCCJLC, inas)$(* as t*e e(ision in Civi& Case No. LJ<CK=< o, t*e Re+iona& Tria& Co$rt o, L$e.on Cit' *as &on+ %e(o)e ,ina& an e2e($tor'. T*e on&' iss$e, t*ere,ore, to %e reso&ve in t*e instant petition is -*et*er or not t*e /$ +)ent in ,avor o, petitioner )a' %e e2e($te a+ainst respon ent Genera& Cre it Corporation. T*e &atter (onten s t*at it is a (orporation separate an istin(t ,ro) CCCJLC an , t*ere,ore, its properties )a' not %e &evie $pon to satis,' t*e )onetar' /$ +)ent in ,avor o, petitioner. In s*ort, respon ent raises (orporate ,i(tion as its e,ense. Hen(e, -e are ne(essari&' (a&&e $pon to app&' t*e o(trine o, pier(in+ t*e vei& o, (orporate entit' in or er to eter)ine i, Genera& Cre it Corporation, ,or)er&' CCC, )a' %e *e& &ia%&e ,or t*e o%&i+ations o, CCCJLC. T*e petition is i)presse -it* )erit. A (orporation is an arti,i(ia& %ein+ (reate %' operation o, &a-, *avin+ t*e ri+*t o, s$((ession an t*e po-ers, attri%$tes, an properties e2press&' a$t*ori.e %' &a- or in(i ent to its e2isten(e. It is an arti,i(ia& %ein+ investe %' &a- -it* a persona&it' separate an istin(t ,ro) t*ose o, t*e persons (o)posin+ it as -e&& as ,ro) t*at o, an' ot*er &e+a& entit' to -*i(* it )a' %e re&ate . It -as evo&ve to )a;e possi%&e t*e a++re+ation an asse)%&in+ o, *$+e a)o$nts o, (apita& $pon -*i(* %i+ %$siness epen s. It a&so *as t*e a vanta+e o, nonJ epen en(e on t*e &ives o, t*ose -*o (o)pose it even as it en/o's (ertain ri+*ts an (on $(ts a(tivities o, nat$ra& persons.

Pre(ise&' %e(a$se t*e (orporation is s$(* a preva&ent an o)inatin+ ,a(tor in t*e %$siness &i,e o, t*e (o$ntr', t*e &a- *as to &oo; (are,$&&' into t*e e2er(ise o, po-ers %' t*ese arti,i(ia& persons it *as (reate . An' pier(in+ o, t*e (orporate vei& *as to %e one -it* (a$tion. Ho-ever, t*e Co$rt -i&& not *esitate to $se its s$pervisor' an a /$ i(ative po-ers -*ere t*e (orporate ,i(tion is $se as an $n,air evi(e to a(*ieve an ine:$ita%&e res$&t, e,ra$ (re itors, eva e (ontra(ts an o%&i+ations, or to s*ie& it ,ro) t*e e,,e(ts o, a (o$rt e(ision. T*e (orporate ,i(tion *as to %e isre+ar e -*en ne(essar' in t*e interest o, /$sti(e. In 3irst P*i&ippine Internationa& Ban; v. Co$rt o, Appea&s, et a&., -e *e& > B*en t*e ,i(tion is $r+e as a )eans o, perpetratin+ a ,ra$ or an i&&e+a& a(t or as a ve*i(&e ,or t*e evasion o, an e2istin+ o%&i+ation, t*e (ir($)vention o, stat$tes, t*e a(*ieve)ent or per,e(tion o, a )onopo&' or +enera&&' t*e perpetration o, ;naver' or (ri)e, t*e vei& -it* -*i(* t*e &a- (overs an iso&ates t*e (orporation ,ro) t*e )e)%ers or sto(;*o& ers -*o (o)pose it -i&& %e &i,te to a&&o- ,or its (onsi eration )ere&' as an a++re+ation o, in ivi $a&s. A&so in t*e a%oveJ(ite (ase, -e state t*at t*is Co$rt *as pier(e t*e vei& o, (orporate ,i(tion in n$)ero$s (ases -*ere it -as $se , a)on+ ot*ers, to avoi a /$ +)ent (re it? to avoi in(&$sion o, (orporate assets as part o, t*e estate o, a e(e ent? to avoi &ia%i&it' arisin+ ,ro) e%t? -*en )a e $se o, as a s*ie& to perpetrate ,ra$ an Hor (on,$se &e+iti)ate iss$es? or to pro)ote $n,air o%/e(tives or ot*er-ise to s*ie& t*e). In t*e appea&e /$ +)ent, t*e Co$rt o, Appea&s s$staine respon ent1s ar+$)ents o, separateness an its (*ara(ter as a i,,erent (orporation -*i(* is a nonJpart' or stran+er to t*is (ase. T*e e,ense o, separateness -i&& %e isre+ar e -*ere t*e %$siness a,,airs o, a s$%si iar' (orporation are so (ontro&&e %' t*e )ot*er (orporation to t*e e2tent t*at it %e(o)es an instr$)ent or a+ent o, its parent. B$t even -*en t*ere is o)inan(e over t*e a,,airs o, t*e s$%si iar', t*e o(trine o, pier(in+ t*e vei& o, (orporate ,i(tion app&ies on&' -*en s$(* ,i(tion is $se to e,eat p$%&i( (onvenien(e, /$sti,' -ron+, prote(t ,ra$ or e,en (ri)e. Be state in To)as Lao Constr$(tion v. Nationa& La%or Re&ations Co))ission, t*at t*e &e+a& ,i(tion o, a (orporation %ein+ a /$ri i(a& entit' -it* a istin(t an separate persona&it' -as envisa+e ,or (onvenien(e an to serve /$sti(e. T*ere,ore, it s*o$& not %e $se as a s$%ter,$+e to (o))it in/$sti(e an (ir($)vent t*e &a-. Pre(ise&' ,or t*e a%ove reasons, -e +rant t*e instant petition. It is o%vio$s t*at t*e $se %' CCCJLC o, t*e sa)e na)e o, Co))er(ia& Cre it Corporation -as inten e to p$%&i(&' i enti,' it as a (o)ponent o, t*e CCC +ro$p o, (o)panies en+a+e in one an t*e sa)e %$siness, i.e., invest)ent an ,inan(in+. Asi e ,ro) CCCJL$e.on Cit', ot*er ,ran(*ise (o)panies -ere or+ani.e s$(* as CCCJNort* Mani&a an CCCJCa+a'an Va&&e'. T*e or+ani.ation o, s$%si iar' (orporations as -*at

-as one *ere is $s$a&&' resorte to ,or t*e a++r$pation o, (apita&, t*e a%i&it' to (over )ore territor' an pop$&ation, t*e e(entra&i.ation o, a(tivities %est e(entra&i.e , an t*e se($rin+ o, ot*er &e+iti)ate a vanta+es. B$t -*en t*e )ot*er (orporation an its s$%si iar' (ease to a(t in +oo ,ait* an *onest %$siness /$ +)ent, -*en t*e (orporate evi(e is $se %' t*e parent to avoi its &ia%i&it' ,or &e+iti)ate o%&i+ations o, t*e s$%si iar', an -*en t*e (orporate ,i(tion is $se to perpetrate ,ra$ or pro)ote in/$sti(e, t*e &a- steps in to re)e ' t*e pro%&e). B*en t*at *appens, t*e (orporate (*ara(ter is not ne(essari&' a%ro+ate . It (ontin$es ,or &e+iti)ate o%/e(tives. Ho-ever, it is pier(e in or er to re)e ' in/$sti(e, s$(* as t*at in,&i(te in t*is (ase. 3a(t$a&&' an &e+a&&', t*e CCC *a o)inant (ontro& o, t*e %$siness operations o, CCCJ LC. T*e e2(&$sive )ana+e)ent (ontra(t ins$re t*at CCCJLC -o$& %e )ana+e an (ontro&&e %' CCC an -o$& not eviate ,ro) t*e (o))an s o, t*e )ot*er (orporation. In a ition to t*e e2(&$sive )ana+e)ent (ontra(t, CCC appointe its o-n e)p&o'ee, petitioner, as t*e resi ent )ana+er o, CCCJLC. Petitioner1s esi+nation as 0resi ent )ana+er0 i)p&ies t*at *e -as p&a(e in CCCJLC %' a s$perior a$t*orit'. In ,a(t, even a,ter *is assi+n)ent to t*e s$%si iar' (orporation, petitioner (ontin$e to re(eive *is sa&aries, a&&o-an(es, an %ene,its ,ro) CCC, -*i(* &ater %e(a)e respon ent Genera& Cre it Corporation. Not on&' t*at. Petitioner an t*e ot*er per)anent e)p&o'ees o, CCCJLC -ere :$a&i,ie )e)%ers an parti(ipants o, t*e E)p&o'ees Pension P&an o, CCC. T*ere are ot*er in i(ations in t*e re(or -*i(* attest to t*e app&i(a%i&it' o, t*e i entit' r$&e in t*is (ase, na)e&'> t*e $nit' o, interests, )ana+e)ent, an (ontro&? t*e trans,er o, ,$n s to s$it t*eir in ivi $a& (orporate (onvenien(es? an t*e o)inan(e o, po&i(' an pra(ti(e %' t*e )ot*er (orporation ins$re t*at CCCJLC -as an instr$)enta&it' or a+en(' o, CCC. As petitioner stresses, %ot* CCC an CCCJLC -ere en+a+e in t*e sa)e prin(ipa& &ine o, %$siness invo&vin+ a sin+&e transa(tion pro(ess. Un er t*eir is(o$ntin+ arran+e)ents, CCC ,inan(e t*e operations o, CCCJLC. T*e s$%si iar' so& , is(o$nte , or assi+ne its a((o$nts re(eiva%&es to CCC. T*e testi)on' o, !ose&ito D. Li-ana+, a((o$ntant an a$ itor o, CCC sin(e 78A7, s*o-s t*e pervasive an intensive a$ itin+ ,$n(tion o, CCC over CCCJLC. @A T*e t-o (orporations a&so s*are t*e sa)e o,,i(e spa(e. CCCJLC *a no o,,i(e o, its o-n. T*e (o)p&aint in Civi& Case No. LJ<CK=<, instit$te %' CCCJLC, -as even veri,ie %' t*e ire(torJrepresentative o, CCC. T*e &a-'ers -*o ,i&e t*e (o)p&aint an a)en e (o)p&aint -ere a&& inJ*o$se &a-'ers o, CCC. T*e (*a&&en+e e(ision o, t*e Co$rt o, Appea&s states t*at CCC, no- Genera& Cre it Corporation, is not a ,or)a& part' in t*e (ase. T*e reason ,or t*is is t*at t*e (o)p&aint -as ,i&e %' CCCJLC a+ainst petitioner. T*e (*oi(e o, parties -as -it* CCCJLC. T*e /$ +)ent a-ar in t*is (ase arose ,ro) t*e (o$nter(&ai) -*i(* petitioner set $p a+ainst CCCJLC.

T*e (ir($)stan(es -*i(* &e to t*e ,i&in+ o, t*e a,oresai (o)p&aint are :$ite revea&in+. As narrate a%ove, t*e is(o$ntin+ a+ree)ents t*ro$+* -*i(* CCC (ontro&&e t*e ,inan(es o, its s$%or inates %e(a)e $n&a-,$& -*en Centra& Ban; a opte t*e DOSRI pro*i%itions. Un er t*is r$&e t*e ire(tors, o,,i(ers, an sto(;*o& ers are pro*i%ite ,ro) %orro-in+ ,ro) t*eir (o)pan'. Instea o, a *erin+ to t*e &etter an spirit o, t*e re+$&ations %' avoi in+ DOSRI &oans a&to+et*er, CCC $se t*e (orporate evi(e to (ontin$e t*e pro*i%ite pra(ti(e. CCC or+ani.e sti&& anot*er (orporation, t*e CCCJ E:$it' Corporation. Ho-ever, as a -*o&&' o-ne s$%si iar', CCCJE:$it' -as in ,a(t on&' anot*er na)e ,or CCC. 5e' o,,i(ia&s o, CCC, in(&$ in+ t*e resi ent )ana+ers o, s$%si iar' (orporations, -ere appointe to positions in CCCJE:$it'. In or er to (ir($)vent t*e Centra& Ban;1s isapprova& o, CCCJLC1s )o e o, re $(in+ its DOSRI &en er a((o$nts an its ire(tive to ,o&&o- Centra& Ban; re:$ire)ents, resi ent )ana+ers, in(&$ in+ petitioner, -ere to& to o%serve a pse$ oJ(o)p&ian(e -it* t*e p*asin+ o$t or ers. 3or *is $n-i&&in+ness to satis,a(tori&' (on,or) to t*ese ire(tives an *is re&$(tan(e to resort to i&&e+a& pra(ti(es, petitioner earne t*e ire o, *is e)p&o'ers. Event$a&&', *is servi(es -ere ter)inate , an (ri)ina& an (ivi& (ases -ere ,i&e a+ainst *i). Petitioner iss$e t-ent'Jt*ree (*e(;s as )one' p&a(e)ents -it* CCCJLC %e(a$se o, i,,i($&ties ,a(e %' t*e ,ir) in i)p&e)entin+ t*e re:$ire p*aseJo$t pro+ra). 3$n s ,ro) *is ($rrent a((o$nt in t*e 3ar East Ban; an Tr$st Co)pan' -ere trans,erre to CCCJLC. T*ese )onies -ere a&&e+e in t*e (ri)ina& (o)p&aints a+ainst *i) as *avin+ %een sto&en. Co)p&aints ,or :$a&i,ie t*e,t an esta,a -ere %ro$+*t %' CCCJLC a+ainst petitioner. T*ese (ri)ina& (ases -ere &ater is)isse . Si)i&ar&', t*e (ivi& (o)p&aint -*i(* -as ,i&e -it* t*e Co$rt o, 3irst Instan(e o, Pasi+ an &ater trans,erre to t*e Re+iona& Tria& Co$rt o, L$e.on Cit' -as is)isse , %$t *is (o$nter(&ai)s -ere +rante . 3a(e -it* t*e ,inan(ia& o%&i+ations -*i(* CCCJLC *a to satis,', t*e )ot*er ,ir) (&ose CCCJLC, in o%vio$s ,ra$ o, its (re itors. CCCJLC, instea o, opposin+ its (&os$re, (ooperate in its o-n e)ise. Convenient&', CCCJLC state in its opposition to t*e )otion ,or a&ias -rit o, e2e($tion t*at a&& its properties an assets *a %een trans,erre an ta;en over %' CCC. Un er t*e ,ore+oin+ (ir($)stan(es, t*e (ontention o, respon ent Genera& Cre it Corporation, t*e ne- na)e o, CCC, t*at t*e (orporate ,i(tion s*o$& %e appre(iate in its ,avor is -it*o$t )erit. Parap*rasin+ t*e r$&in+ in C&aparo&s v. Co$rt o, In $stria& Re&ations, @= reiterate in Con(ept B$i& ers In(. v. Nationa& La%or Re&ations, @8 it is ver' o%vio$s t*at respon ent 0see;s t*e prote(tive s*ie& o, a (orporate ,i(tion -*ose vei& t*e present (ase (o$& , an s*o$& , %e pier(e as it -as e&i%erate&' an )a&i(io$s&' esi+ne to eva e its ,inan(ia& o%&i+ation o, its e)p&o'ees.0 I, t*e (orporate ,i(tion is s$staine , it %e(o)es a *an ' e(eption to avoi a /$ +)ent e%t an -or; an in/$sti(e. T*e e(ision raise to $s ,or revie- is an invitation to

)$&tip&i(it' o, &iti+ation. As -e state in Is&a)i( Dire(torate vs. Co$rt o, Appea&s, <C t*e en s o, /$sti(e are not serve i, ,$rt*er &iti+ation is en(o$ra+e -*en t*e iss$e is eter)ina%&e %ase on t*e re(or s. A (o$rt /$ +)ent %e(o)es $se&ess an ine,,e(tive i, t*e e)p&o'er, in t*is (ase CCC as a )ot*er (orporation, is p&a(e %e'on t*e &e+a& rea(* o, t*e /$ +)ent (re itor -*o, a,ter protra(te &iti+ation, *as %een ,o$n entit&e to positive re&ie,. Co$rts *ave %een or+ani.e to p$t an en to (ontrovers'. T*is p$rpose s*o$& not %e ne+ate %' an inapp&i(a%&e an -ron+ $se o, t*e ,i(tion o, t*e (orporate vei&. BHERE3ORE, t*e e(ision o, t*e Co$rt o, Appea&s is *ere%' REVERSED an SET ASIDE. T*e in/$n(tion a+ainst t*e *o& in+ o, an a$(tion sa&e ,or t*e e2e($tion o, t*e e(ision in Civi& Case No. LJ<CK=< o, properties o, Genera& Cre it Corporation, an t*e &ev'in+ $pon an se&&in+ on e2e($tion o, ot*er properties o, Genera& Cre it Corporation, is LI3TED. SO ORDERED. Davi e, !r., C.!., P$no, 5ap$nan, an Par o, !!., (on($r.

FIRST DIVISION P&ILIPPINE NATIONAL BANA, petitioner, vs. RITRATTO GROUP INC., RIATTO INTERNATIONAL, INC., an DADASAN GENERAL MERCHANDISE, respon ents. G.R. No. 142+1+ J23: *1, 2;;1 S#NOPSIS On Ma' @8, 788D, PNB Internationa& 3inan(e Lt . 4PNBJI3L9, a s$%si iar' (o)pan' o, petitioner P*i&ippine Nationa& Ban; 4PNB9, an respon ents entere into &oan (ontra(ts -*ere%' t*e ,or)er e2ten e (re it ,a(i&it' in ,avor o, t*e &atter se($re %' rea& estate )ort+a+es (onstit$te over ,o$r 469 par(e&s o, &an in Ma;ati Cit'. B*en respon ents ,ai&e to pa' t*eir o%&i+ations, a ,ore(&os$re pro(ee in+ -as instit$te %' PNBJI3L, t*ro$+* its attorne'JinJ,a(t, PNB. Hen(e, respon ents ,i&e a (o)p&aint ,or in/$n(tion -it* pra'er ,or t*e iss$an(e o, a -rit o, pre&i)inar' in/$n(tion an Hor te)porar' restrainin+ or er %e,ore t*e Re+iona& Tria& Co$rt o, Ma;ati. Respon ents an(*ore t*eir pra'er ,or in/$n(tion on a&&e+e inva&i provisions o, t*e (ontra(t. Petitioner ,i&e a )otion to is)iss on t*e +ro$n s o, ,ai&$re to state a (a$se o, a(tion an t*e a%sen(e o, an' privit' %et-een t*e petitioner an respon ents. T*e tria& (o$rt +rante respon ents1 app&i(ation ,or pre&i)inar' in/$n(tion an event$a&&' enie petitioner1s )otion ,or &a(; o, )erit. App&'in+ t*e o(trine o, 0Pier(in+ t*e Vei& o, Corporate I entit',0 t*e tria& (o$rt r$&e t*at sin(e PNBJI3L is a -*o&&' o-ne s$%si iar' o, petitioner PNB, t*e s$it a+ainst t*e petitioner is a s$it a+ainst PNBJI3L. A petition ,or (ertiorari an pro*i%ition -as t*erea,ter ,i&e %' t*e petitioner %e,ore t*e Co$rt o, Appea&s, %$t t*e sa)e -as enie %' t*e appe&&ate (o$rt. Hen(e, petitioner so$+*t re(o$rse %e,ore t*e S$pre)e Co$rt. In +rantin+ t*e petition, t*e Co$rt *e& t*at t*e respon ents o not *ave a (a$se o, a(tion a+ainst t*e petitioner, as t*e &atter -as not a priv' to t*e (ontra(t t*e provisions o, -*i(* respon ents see; to e(&are voi . T*e Co$rt ,o$n t*e o(trine o, pier(in+ t*e (orporate vei& %ase on t*e a&ter e+o or instr$)enta&it' o(trine inapp&i(a%&e in t*e (ase at %ar. Asi e ,ro) t*e ,a(t t*at PNBJI3L is a -*o&&' o-ne s$%si iar' o, petitioner PNB, t*ere -as no s*o-in+ o, t*e in i(ative ,a(tors t*at t*e ,or)er (orporation -as a )ere instr$)enta&it' o, t*e &atter are present. Neit*er -as t*ere a e)onstration t*at an' o, t*e evi&s so$+*t to %e prevente %' t*e o(trine o, pier(in+ t*e (orporate vei& e2ist. Anent t*e pre&i)inar' in/$n(tion iss$e , t*e Co$rt or ere t*at t*e sa)e %e &i,te as t*ere -as no s*o-in+ t*at respon ents -ere entit&e to t*e iss$an(e o, t*e -rit. Respon ents *ave ,ai&e to prove t*at t*e' *ave a ri+*t prote(te an t*at t*e a(t a+ainst -*i(* t*e -rit is to %e ire(te are vio&ative o, sai ri+*t.

S#LLABUS 1. CO((ERCIAL LA$% CORPORATION LA$% CORPORATION% &AS A PERSONALIT# SEPARATE AND DISTINCT FRO( ITS STOCA&OLDERS OR (E(BERS. # T*e +enera& r$&e is t*at as a &e+a& entit', a (orporation *as a persona&it' istin(t an separate ,ro) its in ivi $a& sto(;*o& ers or )e)%ers, an is not a,,e(te %' t*e persona& ri+*ts, o%&i+ations an transa(tions o, t*e &atter. T*e )ere ,a(t t*at a (orporation o-ns a&& o, t*e sto(;s o, anot*er (orporation, ta;en a&one is not s$,,i(ient to /$sti,' t*eir %ein+ treate as one entit'. I, $se to per,or) &e+iti)ate ,$n(tions, a s$%si iar'1s separate e2isten(e )a' %e respe(te , an t*e &ia%i&it' o, t*e parent (orporation as -e&& as t*e s$%si iar' -i&& %e (on,ine to t*ose arisin+ in t*eir respe(tive %$siness. T*e (o$rts )a' in t*e e2er(ise o, /$ i(ia& is(retion step in to prevent t*e a%$ses o, separate entit' privi&e+e an pier(e t*e vei& o, (orporate entit'. 2. ID.% ID.% ID.% DOCTRINE OF PIERCING T&E VEIL OF CORPORATE FICTION% CIRCU(STANCES RENDERING SUBSIDIAR# A (ERE INSTRU(ENTALIT#. # B*i&e t*ere e2ists no e,inite test o, +enera& app&i(ation in eter)inin+ -*en a s$%si iar' )a' %e treate as a )ere instr$)enta&it' o, t*e parent (orporation, so)e ,a(tors *ave %een i enti,ie t*at -i&& /$sti,' t*e app&i(ation o, t*e treat)ent o, t*e o(trine o, t*e pier(in+ o, t*e (orporate vei&. T*e (ase o, Garett vs. So$t*ern Rai&-a' Co. is en&i+*tenin+. T*e (ase invo&ve a s$it a+ainst t*e So$t*ern Rai&-a' Co)pan'. P&ainti,, -as e)p&o'e %' Lenoir Car Bor;s an a&&e+e t*at *e s$staine in/$ries -*i&e -or;in+ ,or Lenoir. He, *o-ever, ,i&e a s$it a+ainst So$t*ern Rai&-a' Co)pan' on t*e +ro$n t*at So$t*ern *a a(:$ire t*e entire (apita& sto(; o, Lenoir Car Bor;s, *en(e, t*e &atter (orporation -as %$t a )ere instr$)enta&it' o, t*e ,or)er. T*e Tennessee S$pre)e Co$rt state t*at as a +enera& r$&e t*e sto(; o-ners*ip a&one %' one (orporation o, t*e sto(; o, anot*er oes not t*ere%' ren er t*e o)inant (orporation &ia%&e ,or t*e torts o, t*e s$%si iar' $n&ess t*e separate (orporate e2isten(e o, t*e s$%si iar' is a )ere s*a), or $n&ess t*e (ontro& o, t*e s$%si iar' is s$(* t*at it is %$t an instr$)enta&it' or a /$n(t o, t*e o)inant (orporation. Sai Co$rt t*en o$t&ine t*e (ir($)stan(es -*i(* )a' %e $se,$& in t*e eter)ination o, -*et*er t*e s$%si iar' is %$t a )ere instr$)enta&it' o, t*e parentJ(orporation. T*e Cir($)stan(es ren erin+ t*e s$%si iar' an instr$)enta&it'. It is )ani,est&' i)possi%&e to (ata&o+$e t*e in,inite variations o, ,a(t t*at (an arise %$t t*ere are (ertain (o))on (ir($)stan(es -*i(* are i)portant an -*i(*, i, present in t*e proper (o)%ination, are (ontro&&in+. T*ese are as ,o&&o-s? 4a9 T*e parent (orporation o-ns a&& or )ost o, t*e (apita& sto(; o, t*e s$%si iar'. 4%9 T*e parent an s$%si iar' (orporations *ave (o))on ire(tors or o,,i(ers. 4(9 T*e parent (orporation ,inan(es t*e s$%si iar'. 4 9 T*e parent (orporation s$%s(ri%es to a&& t*e (apita& sto(; o, t*e s$%si iar' or ot*er-ise (a$ses its in(orporation. 4e9 T*e s$%si iar' *as +ross&' ina e:$ate (apita&. 4,9 T*e parent (orporation pa's t*e sa&aries an ot*er e2penses or &osses o, t*e s$%si iar'. 4+9 T*e s$%si iar' *as s$%stantia&&' no %$siness e2(ept -it* t*e parent (orporation or no assets e2(ept t*ose (onve'e to or %' t*e parent (orporation. 4*9 In t*e papers o, t*e parent (orporation or in t*e state)ents o, its o,,i(ers, t*e s$%si iar' is es(ri%e as a epart)ent or ivision o, t*e parent (orporation, or its %$siness or ,inan(ia& responsi%i&it' is re,erre to as t*e parent (orporation1s o-n. 4i9 T*e parent (orporation $ses t*e propert' o, t*e s$%si iar' as its

o-n. 4/9 T*e ire(tors or e2e($tives o, t*e s$%si iar' o not a(t in epen ent&' in t*e interest o, t*e s$%si iar' %$t ta;e t*eir or ers ,ro) t*e parent (orporation. 4;9 T*e ,or)a& &e+a& re:$ire)ents o, t*e s$%si iar' are not o%serve . T*e Tennessee S$pre)e Co$rt t*$s r$&e > In t*e (ase at %ar on&' t-o o, t*e e&even &iste in i(ia o(($r, na)e&', t*e o-ners*ip o, )ost o, t*e (apita& sto(; o, Lenoir %' So$t*ern, an possi%&' s$%s(ription to t*e (apita& sto(; o, Lenoir . . . T*e (o)p&aint )$st %e is)isse . *. ID.% ID.% ID.% ID.% $&EN APPLICABLE. # In t*is /$ris i(tion, -e *ave *e& t*at t*e o(trine o, pier(in+ t*e (orporate vei& is an e:$ita%&e o(trine eve&ope to a ress sit$ations, -*ere t*e separate (orporate persona&it' o, a (orporation is a%$se or $se ,or -ron+,$& p$rposes. T*e o(trine app&ies -*en t*e (orporate ,i(tion is $se to e,eat p$%&i( (onvenien(e, /$sti,' -ron+, prote(t ,ra$ or e,en (ri)e, or -*en it is )a e as a s*ie& to (on,$se t*e &e+iti)ate iss$es, or -*ere a (orporation is t*e )ere a&ter e+o or %$siness (on $it o, a person, or -*ere t*e (orporation is so or+ani.e an (ontro&&e an its a,,airs are so (on $(te as to )a;e it )ere&' an instr$)enta&it', a+en(', (on $it or a /$n(t o, anot*er (orporation. 4. ID.% ID.% ID.% ID.% ELE(ENTS. @ In Con(ept B$i& ers, In(. v. NLRC, -e *ave &ai t*e test in eter)inin+ t*e app&i(a%i&it' o, t*e o(trine o, pier(in+ t*e vei& o, (orporate ,i(tion, to -it> 7. Contro&, not )ere )a/orit' or (o)p&ete (ontro&, %$t (o)p&ete o)ination, not on&' o, ,inan(es %$t o, po&i(ies an %$siness pra(ti(e in respe(t to t*e transa(tion atta(;e so t*at t*e (orporate entit' as to t*is transa(tion *a at t*e ti)e no separate )in , -i&& or e2isten(e o, its o-n. @. S$(* (ontro& )$st *ave %een $se %' t*e e,en ant to (o))it ,ra$ or -ron+, to perpet$ate t*e vio&ation o, a stat$tor' or ot*er positive &e+a& $t', or is*onest an $n/$st a(t in (ontravention o, p&ainti,,1s &e+a& ri+*ts? an , <. T*e a,oresai (ontro& an %rea(* o, $t' )$st pro2i)ate&' (a$se t*e in/$r' or $n/$st &oss (o)p&aine o,. T*e a%sen(e o, an' one o, t*ese e&e)ents prevents 0pier(in+ t*e (orporate vei&.0 In app&'in+ t*e 0instr$)enta&it'0 or 0a&ter e+o0 o(trine, t*e (o$rts are (on(erne -it* rea&it' an not ,or), -it* *o- t*e (orporation operate an t*e in ivi $a& e,en ant1s re&ations*ip to t*e operation. 5. ID.% ID.% ID.% ID.% NOT APPLICABLE TO CASE AT BAR. # Asi e ,ro) t*e ,a(t t*at PNBJI3L is a -*o&&' o-ne s$%si iar' o, petitioner PNB, t*ere is no s*o-in+ o, t*e in i(ative ,a(tors t*at t*e ,or)er (orporation is a )ere instr$)enta&it' o, t*e &atter are present. Neit*er is t*ere a e)onstration t*at an' o, t*e evi&s so$+*t to %e prevente %' t*e o(trine o, pier(in+ t*e (orporate vei& e2ists. Ines(apa%&', t*ere,ore, t*e o(trine o, pier(in+ t*e (orporate vei& %ase on t*e a&ter e+o or instr$)enta&it' o(trine ,in s no app&i(ation in t*e (ase at %ar. +. ID.% PROVISIONAL RE(EDIES% $RIT OF PRELI(INAR# INJUNCTION% DIS(ISSAL OF T&E PRINCIPAL ACTION RESULTS IN DENIAL OF ISSUANCE T&EREOF. # Anent t*e iss$an(e o, t*e pre&i)inar' in/$n(tion, t*e sa)e )$st %e &i,te as it is a )ere provisiona& re)e ' %$t a /$n(t to t*e )ain s$it. A -rit o, pre&i)inar' in/$n(tion is an an(i&&ar' or preventive re)e ' t*at )a' on&' %e resorte to %' a &iti+ant to prote(t or preserve *is ri+*ts or interests an ,or no ot*er p$rposes $rin+ t*e pen en(' o, t*e prin(ipa& a(tion. T*e is)issa& o, t*e prin(ipa&

a(tion t*$s res$&ts in t*e enia& o, t*e pra'er ,or t*e iss$an(e o, t*e -rit. 3$rt*er, t*ere is no s*o-in+ t*at respon ents are entit&e to t*e iss$an(e o, t*e -rit. <. ID.% ID.% ID.% $&EN (A# BE GRANTED. # An in/$n(tive re)e ' )a' on&' %e resorte to -*en t*ere is a pressin+ ne(essit' to avoi in/$rio$s (onse:$en(es -*i(* (annot %e re)e ie $n er an' stan ar (o)pensation. Respon ents o not en' t*eir in e%te ness. T*eir properties are %' t*eir o-n (*oi(e en($)%ere %' rea& estate )ort+a+es. Upon t*e nonJpa')ent o, t*e &oans, -*i(* -ere se($re %' t*e )ort+a+es so$+*t to %e ,ore(&ose , t*e )ort+a+e properties are proper&' s$%/e(t to a ,ore(&os$re sa&e. Moreover, respon ents :$estione t*e a&&e+e voi stip$&ations in t*e (ontra(t on&' -*en petitioner initiate t*e ,ore(&os$re pro(ee in+s. C&ear&', respon ents *ave ,ai&e to prove t*at t*e' *ave a ri+*t prote(te an t*at t*e a(ts a+ainst -*i(* t*e -rit is to %e ire(te are vio&ative o, sai ri+*t. T*e Co$rt is not $n)in ,$& o, t*e ,in in+s o, %ot* t*e tria& (o$rt an t*e appe&&ate (o$rt t*at t*ere )a' %e serio$s +ro$n s to n$&&i,' t*e provisions o, t*e &oan a+ree)ent. Ho-ever, as ear&ier is($sse , respon ents (o))itte t*e )ista;e o, ,i&in+ t*e (ase a+ainst t*e -ron+ part', t*$s, t*e' )$st s$,,er t*e (onse:$en(es o, t*eir error. ". CIVIL LA$% AGENC#% A SUIT AGAINST AN AGENT, ABSENT CO(PELLING REASONS, IS NOT A SUIT AGAINST T&E PRINCIPAL. # In an' (ase, t*e parentJs$%si iar' re&ations*ip %et-een PNB an PNBJI3L is not t*e si+ni,i(ant &e+a& re&ations*ip invo&ve in t*is (ase sin(e t*e petitioner -as not s$e %e(a$se it is t*e parent (o)pan' o, PNBJI3L. Rat*er, t*e petitioner -as s$e %e(a$se it a(te as an attorne'JinJ,a(t o, PNBJI3L in initiatin+ t*e ,ore(&os$re pro(ee in+s. As s$it a+ainst an a+ent (annot -it*o$t (o)pe&&in+ reasons %e (onsi ere as a s$it a+ainst t*e prin(ipa&. Un er t*e R$&es o, Co$rt, ever' a(tion )$st %e prose($te o, e,en e in t*e na)e o, t*e rea& part'JinJinterest, $n&ess ot*er-ise a$t*ori.e %' &a- or t*ese R$&es. In )an ator' ter)s, t*e R$&es re:$ire t*at 0partiesJinJinterest -it*o$t -*o) no ,ina& eter)ination (an %e *a , an a(tion s*a&& %e /oine eit*er as p&ainti,,s or e,en ants.0 In t*e (ase at %ar, t*e in/$n(tion s$it is ire(te on&' a+ainst t*e a+ent, not t*e prin(ipa&. DECISION AAPUNAN, J pIn a petition ,or revie- on (ertiorari $n er R$&e 6K o, t*e Revise R$&es o, Co$rt, petitioner see;s to ann$& an set asi e t*e Co$rt o, Appea&s1 e(ision in C.A. CV G.R. S.P. No. KK<A6 ate Mar(* @A, @CCC, a,,ir)in+ t*e Or er iss$in+ a -rit o, pre&i)inar' in/$n(tion o, t*e Re+iona& Tria& Co$rt o, Ma;ati, Bran(* 76A ate !$ne <C, 7888, an its Or er ate O(to%er 6, 7888, -*i(* enie petitioner1s )otion to is)iss. T*e ante(e ents o, t*is (ase are as ,o&&o-s> Petitioner P*i&ippine Nationa& Ban; is a o)esti( (orporation or+ani.e an e2istin+ $n er P*i&ippine &a-. Mean-*i&e, respon ents Ritratto Gro$p, In(., Riatto Internationa&, In(. an Da asan Genera& Mer(*an ise are o)esti( (orporations, &i;e-ise, or+ani.e an e2istin+ $n er P*i&ippine &a-.

On Ma' @8, 788D, PNB Internationa& 3inan(e Lt . 4PNBJI3L9 a s$%si iar' (o)pan' o, PNB, or+ani.e an oin+ %$siness in Hon+ 5on+, e2ten e a &etter o, (re it in ,avor o, t*e respon ents in t*e a)o$nt o, USQ<CC,CCC.CC se($re %' rea& estate )ort+a+es (onstit$te over ,o$r 469 par(e&s o, &an in Ma;ati Cit'. T*is (re it ,a(i&it' -as &ater in(rease s$((essive&' to USQ7,76C,CCC.CC in Septe)%er 788D? to USQ7,@8C,CCC.CC in Nove)%er 788D? to USQ7,6@K,CCC.CC in 3e%r$ar' 788A? an e(rease to USQ7,6@7,<7D.7= in Apri& 788=. Respon ents )a e repa')ents o, t*e &oan in($rre %' re)ittin+ t*ose a)o$nts to t*eir &oan a((o$nt -it* PNBJI3L in Hon+ 5on+. Ho-ever, as o, Apri& <C, 788=, t*eir o$tstan in+ o%&i+ations stoo at USQ7,68A,@A6.AC. P$rs$ant to t*e ter)s o, t*e rea& estate )ort+a+es, PNBJI3L, t*ro$+* its attorne'JinJ,a(t PNB, noti,ie t*e respon ents o, t*e ,ore(&os$re o, a&& t*e rea& estate )ort+a+es an t*at t*e properties s$%/e(t t*ereo, -ere to %e so& at a p$%&i( a$(tion on Ma' @A, 7888 at t*e Ma;ati Cit' Ha&&. On Ma' @K, 7888, respon ents ,i&e a (o)p&aint ,or in/$n(tion -it* pra'er ,or t*e iss$an(e o, a -rit o, pre&i)inar' in/$n(tion an Hor te)porar' restrainin+ or er %e,ore t*e Re+iona& Tria& Co$rt o, Ma;ati. T*e E2e($tive !$ +e o, t*e Re+iona& Tria& Co$rt o, Ma;ati iss$e a A@J*o$r te)porar' restrainin+ or er. On Ma' @=, 7888, t*e (ase -as ra,,&e to Bran(* 76A o, t*e Re+iona& Tria& Co$rt o, Ma;ati. T*e tria& /$ +e t*en set a *earin+ on !$ne =, 7888. At t*e *earin+ o, t*e app&i(ation ,or pre&i)inar' in/$n(tion, petitioner -as +iven a perio o, seven a's to ,i&e its -ritten opposition to t*e app&i(ation. On !$ne 7K, 7888, petitioner ,i&e an opposition to t*e app&i(ation ,or a -rit o, pre&i)inar' in/$n(tion to -*i(* t*e respon ents ,i&e a rep&'. On !$ne @K, 7888, petitioner ,i&e a )otion to is)iss on t*e +ro$n s o, ,ai&$re to state a (a$se o, a(tion an t*e a%sen(e o, an' privit' %et-een t*e petitioner an respon ents. On !$ne <C, 7888, t*e tria& (o$rt /$ +e iss$e an Or er ,or t*e iss$an(e o, a -rit o, pre&i)inar' in/$n(tion, -*i(* -rit -as (orrespon in+&' iss$e on !$&' 76, 7888. On O(to%er 6, 7888, t*e )otion to is)iss -as enie %' t*e tria& (o$rt /$ +e ,or &a(; o, )erit Petitioner, t*erea,ter, in a petition ,or (ertiorari an pro*i%ition assai&e t*e iss$an(e o, t*e -rit o, pre&i)inar' in/$n(tion %e,ore t*e Co$rt o, Appea&s. In t*e i)p$+ne e(ision, t*e appe&&ate (o$rt is)isse t*e petition. Petitioner t*$s see;s re(o$rse to t*is Co$rt an raises t*e ,o&&o-in+ errors> 7. THE COURT O3 APPEALS PALPABL" ERRED IN NOT DISMISSING THE COMPLAINT A LUO, CONSIDERING THAT B" THE ALLEGATIONS O3 THE COMPLAINT, NO CAUSE O3 ACTION EOISTS AGAINST PETITIONER, BHICH IS NOT A REAL PART" IN INTEREST BEING A MERE ATTORNE"JINJ3ACT AUTHORIPED TO EN3ORCE AN ANCILLAR" CONTRACT. @. THE COURT O3 APPEALS PALPABL" ERRED IN ALLOBING THE TRIAL COURT TO ISSUE IN EOCESS OR LAC5 O3 !URISDICTION A BRIT O3 PRELIMINAR" IN!UNCTION OVER AND BE"OND BHAT BAS PRA"ED 3OR

IN THE COMPLAINT A LUO CONTRAR" TO CHIE3 O3 STA33, A3P VS. GUADIP !R., 7C7 SCRA =@A. Petitioner pra's, inter a&ia, t*at t*e Co$rt o, Appea&s1 De(ision ate Mar(* @A, @CCC an t*e tria& (o$rt1s Or ers ate !$ne <C, 7888 an O(to%er 6, 7888 %e set asi e an t*e is)issa& o, t*e (o)p&aint in t*e instant (ase. In t*eir Co))ent, respon ents ar+$e t*at even ass$)in+ ar+$en o t*at petitioner an PNBJI3L are t-o separate entities, petitioner is sti&& t*e part'JinJinterest in t*e app&i(ation ,or pre&i)inar' in/$n(tion %e(a$se it is tas;e to (o))it a(ts o, ,ore(&osin+ respon ents1 properties. Respon ents )aintain t*at t*e entire (re it ,a(i&it' is voi as it (ontains stip$&ations in vio&ation o, t*e prin(ip&e o, )$t$a&it' o, (ontra(ts. In a ition, respon ents /$sti,ie t*e a(t o, t*e (o$rt a :$o in app&'in+ t*e o(trine o, 0Pier(in+ t*e Vei& o, Corporate I entit'0 %' statin+ t*at petitioner is )ere&' an a&ter e+o or a %$siness (on $it o, PNBJI3L. T*e petition is i)presse -it* )erit. Respon ents, in t*eir (o)p&aint, an(*or t*eir pra'er ,or in/$n(tion on a&&e+e inva&i provisions o, t*e (ontra(t> GROUNDS I THE DETERMINATION O3 THE INTEREST RATES BEING LE3T TO THE SOLE DISCRETION O3 THE DE3ENDANT PNB CONTRAVENES THE PRINCIPAL O3 MUTUALIT" O3 CONTRACTS. II THERE BEING A STIPULATION IN THE LOAN AGREEMENT THAT THE RATE O3 INTEREST AGREED UPON MA" BE UNILATERALL" MODI3IED B" DE3ENDANT, THERE BAS NO STIPULATION THAT THE RATE O3 INTEREST SHALL BE REDUCED IN THE EVENT THAT THE APPLICABLE MAOIMUM RATE O3 INTEREST IS REDUCED B" LAB OR B" THE MONETAR" BOARD. Base on t*e a,ore)entione +ro$n s, respon ents so$+*t to en/oin an restrain PNB ,ro) t*e ,ore(&os$re an event$a& sa&e o, t*e propert' in or er to prote(t t*eir ri+*ts to sai propert' %' reason o, voi (re it ,a(i&ities as %ases ,or t*e rea& estate )ort+a+e over t*e sai propert'. T*e (ontra(t :$estione is one entere into %et-een respon ent an PNBJI3L, not PNB. In t*eir (o)p&aint, respon ents a )it t*at petitioner is a )ere attorne'JinJ,a(t ,or t*e PNBJI3L -it* ,$&& po-er an a$t*orit' to, inter a&ia, ,ore(&ose on t*e properties )ort+a+e to se($re t*eir &oan o%&i+ations -it* PNBJI3L. In ot*er -or s, *erein petitioner is an a+ent -it* &i)ite a$t*orit' an spe(i,i( $ties $n er a spe(ia& po-er o, attorne' in(orporate in t*e rea& estate )ort+a+e. It is not priv' to t*e &oan (ontra(ts entere into %' respon ents an PNBJI3L.

T*e iss$e o, t*e va&i it' o, t*e &oan (ontra(ts is a )atter %et-een PNBJI3L, t*e petitioner1s prin(ipa& an t*e part' to t*e &oan (ontra(ts, an t*e respon ents. "et, espite t*e re(o+nition t*at petitioner is a )ere a+ent, t*e respon ents in t*eir (o)p&aint pra'e t*at t*e petitioner PNB %e or ere to reJ(o)p$te t*e res(*e $&in+ o, t*e interest to %e pai %' t*e) in a((or an(e -it* t*e ter)s an (on itions in t*e o($)ents evi en(in+ t*e (re it ,a(i&ities, an (re itin+ t*e a)o$nt previo$s&' pai to PNB %' *erein respon ents. C&ear&', petitioner not %ein+ a part to t*e (ontra(t *as no po-er to reJ(o)p$te t*e interest rates set ,ort* in t*e (ontra(t. Respon ents, t*ere,ore, o not *ave an' (a$se o, a(tion a+ainst petitioner. T*e tria& (o$rt, *o-ever, in its Or er ate O(to%er 6, 7886, r$&e t*at sin(e PNBJI3L is a -*o&&' o-ne s$%si iar' o, e,en ant P*i&ippine Nationa& Ban;, t*e s$it a+ainst t*e e,en ant PNB is a s$it a+ainst PNBJI3L. In /$sti,'in+ its r$&in+, t*e tria& (o$rt, (itin+ t*e (ase o, 5oppe& P*i&. In(. vs. "at(o, reasone t*at t*e (orporate entit' )a' %e isre+ar e -*ere a (orporation is t*e )ere a&ter e+o, or %$siness (on $it o, a person or -*ere t*e (orporation is so or+ani.e an (ontro&&e an its a,,airs are so (on $(te , as to )a;e it )ere&' an instr$)enta&it', a+en(', (on $it or a /$n(t o, anot*er (orporation. Be isa+ree. T*e +enera& r$&e is t*at as a &e+a& entit', a (orporation *as a persona&it' istin(t an separate ,ro) its in ivi $a& sto(;*o& ers or )e)%ers, an is not a,,e(te %' t*e persona& ri+*ts, o%&i+ations an transa(tions o, t*e &atter. T*e )ere ,a(t t*at a (orporation o-ns a&& o, t*e sto(;s o, anot*er (orporation, ta;en a&one is not s$,,i(ient to /$sti,' t*eir %ein+ treate as one entit'. I, $se to per,or) &e+iti)ate ,$n(tions, a s$%si iar'1s separate e2isten(e )a' %e respe(te , an t*e &ia%i&it' o, t*e parent (orporation as -e&& as t*e s$%si iar' -i&& %e (on,ine to t*ose arisin+ in t*eir respe(tive %$siness. T*e (o$rts )a' in t*e e2er(ise o, /$ i(ia& is(retion step in to prevent t*e a%$ses o, separate entit' privi&e+e an pier(e t*e vei& o, (orporate entit'. Be ,in , *o-ever, t*at t*e r$&in+ in 5oppe& ,in s no app&i(ation in t*e (ase at %ar. In sai (ase, t*is Co$rt isre+ar e t*e separate e2isten(e o, t*e parent an t*e s$%si iar' on t*e +ro$n t*at t*e &atter -as ,or)e )ere&' ,or t*e p$rpose o, eva in+ t*e pa')ent o, *i+*er ta2es. In t*e (ase at %ar, respon ents ,ai& to s*o- an' (o+ent reason -*' t*e separate entities o, t*e PNB an PNBJI3L s*o$& %e isre+ar e . B*i&e t*ere e2ists no e,inite test o, +enera& app&i(ation in eter)inin+ -*en a s$%si iar' )a' %e treate as a )ere instr$)enta&it' o, t*e parent (orporation, so)e ,a(tors *ave %een i enti,ie t*at -i&& /$sti,' t*e app&i(ation o, t*e treat)ent o, t*e o(trine o, t*e pier(in+ o, t*e (orporate vei&. T*e (ase o, Garrett vs. So$t*ern Rai&-a' Co. is en&i+*tenin+. T*e (ase invo&ve a s$it a+ainst t*e So$t*ern Rai&-a' Co)pan'. P&ainti,, -as e)p&o'e %' Lenoir Car Bor;s an a&&e+e t*at *e s$staine in/$ries -*i&e -or;in+ ,or Lenoir. He, *o-ever, ,i&e a s$it a+ainst So$t*ern Rai&-a' Co)pan' on t*e +ro$n t*at So$t*ern *a a(:$ire t*e entire (apita& sto(; o, Lenoir Car Bor;s, *en(e, t*e &atter

(orporation -as %$t a )ere instr$)enta&it' o, t*e ,or)er. T*e Tennessee S$pre)e Co$rt state t*at as a +enera& r$&e t*e sto(; o-ners*ip a&one %' one (orporation o, t*e sto(; o, anot*er oes not t*ere%' ren er t*e o)inant (orporation &ia%&e ,or t*e torts o, t*e s$%si iar' $n&ess t*e separate (orporate e2isten(e o, t*e s$%si iar' is a )ere s*a), or $n&ess t*e (ontro& o, t*e s$%si iar' is s$(* t*at it is %$t an instr$)enta&it' or a /$n(t o, t*e o)inant (orporation. Sai Co$rt t*en o$t&ine t*e (ir($)stan(es -*i(* )a' %e $se,$& in t*e eter)ination o, -*et*er t*e s$%si iar' is %$t a )ere instr$)enta&it' o, t*e parentJ(orporation> T*e Cir($)stan(e ren erin+ t*e s$%si iar' an instr$)enta&it'. It is )ani,est&' i)possi%&e to (ata&o+$e t*e in,inite variations o, ,a(t t*at (an arise %$t t*ere are (ertain (o))on (ir($)stan(es -*i(* are i)portant an -*i(*, i, present in t*e proper (o)%ination, are (ontro&&in+. T*ese are as ,o&&o-s> 4a9 T*e parent (orporation o-ns a&& or )ost o, t*e (apita& sto(; o, t*e s$%si iar'. 4%9 T*e parent an s$%si iar' (orporations *ave (o))on ire(tors or o,,i(ers. 4(9 T*e parent (orporation ,inan(es t*e s$%si iar'. 4 9 T*e parent (orporation s$%s(ri%es to a&& t*e (apita& sto(; o, t*e s$%si iar' or ot*er-ise (a$ses its in(orporation. 4e9 T*e s$%si iar' *as +ross&' ina e:$ate (apita&. 4,9 T*e parent (orporation pa's t*e sa&aries an ot*er e2penses or &osses o, t*e s$%si iar'. 4+9 T*e s$%si iar' *as s$%stantia&&' no %$siness e2(ept -it* t*e parent (orporation or no assets e2(ept t*ose (onve'e to or %' t*e parent (orporation. 4*9 In t*e papers o, t*e parent (orporation or in t*e state)ents o, its o,,i(ers, t*e s$%si iar' is es(ri%e as a epart)ent or ivision o, t*e parent (orporation, or its %$siness or ,inan(ia& responsi%i&it' is re,erre to as t*e parent (orporation1s o-n. 4i9 T*e parent (orporation $ses t*e propert' o, t*e s$%si iar' as its o-n. 4/9 T*e ire(tors or e2e($tives o, t*e s$%si iar' o not a(t in epen ent&' in t*e interest o, t*e s$%si iar' %$t ta;e t*eir or ers ,ro) t*e parent (orporation. 4;9 T*e ,or)a& &e+a& re:$ire)ents o, t*e s$%si iar' are not o%serve . T*e Tennessee S$pre)e Co$rt t*$s r$&e > In t*e (ase at %ar on&' t-o o, t*e e&even &iste in i(ia o(($r, na)e&', t*e o-ners*ip o, )ost o, t*e (apita& sto(; o, Lenoir %' So$t*ern, an possi%&' s$%s(ription to t*e (apita& sto(; o, Lenoir. . . T*e (o)p&aint )$st %e is)isse . Si)i&ar&', in t*is /$ris i(tion, -e *ave *e& t*at t*e o(trine o, pier(in+ t*e (orporate vei& is an e:$ita%&e o(trine eve&ope to a ress sit$ations -*ere t*e separate (orporate persona&it' o, a (orporation is a%$se or $se ,or -ron+,$& p$rposes. T*e o(trine app&ies -*en t*e (orporate ,i(tion is $se to e,eat p$%&i( (onvenien(e, /$sti,' -ron+, prote(t ,ra$ or e,en (ri)e, or -*en it is )a e as a s*ie& to (on,$se t*e &e+iti)ate iss$es, or -*ere a (orporation is t*e )ere a&ter e+o or %$siness (on $it o, a person, or -*ere t*e (orporation is so or+ani.e an (ontro&&e an its a,,airs are so (on $(te as to )a;e it )ere&' an instr$)enta&it', a+en(', (on $it or a /$n(t o, anot*er (orporation.

In Con(ept B$i& ers, In(. v. NLRC, -e *ave &ai t*e test in eter)inin+ t*e app&i(a%i&it' o, t*e o(trine o, pier(in+ t*e vei& o, (orporate ,i(tion, to -it> 7. Contro&, not )ere )a/orit' or (o)p&ete (ontro&, %$t (o)p&ete o)ination, not on&' o, ,inan(es %$t o, po&i(' an %$siness pra(ti(e in respe(t to t*e transa(tion atta(;e so t*at t*e (orporate entit' as to t*is transa(tion *a at t*e ti)e no separate )in , -i&& or e2isten(e o, its o-n. @. S$(* (ontro& )$st *ave %een $se %' t*e e,en ant to (o))it ,ra$ or -ron+, to perpet$ate t*e vio&ation o, a stat$tor' or ot*er positive &e+a& $t', or is*onest an , $n/$st a(t in (ontravention o, p&ainti,,s &e+a& ri+*ts? an , <. T*e a,oresai (ontro& an %rea(* o, $t' )$st pro2i)ate&' (a$se t*e in/$r' or $n/$st &oss (o)p&aine o,. T*e a%sen(e o, an' one o, t*ese e&e)ents prevents 0pier(in+ t*e (orporate vei&.0 In app&'in+ t*e 0instr$)enta&it'0 or 0a&ter e+o0 o(trine, t*e (o$rts are (on(erne -it* rea&it' an not ,or), -it* *o- t*e (orporation operate an t*e in ivi $a& e,en ant1s re&ations*ip to t*e operation. Asi e ,ro) t*e ,a(t t*at PNBJI3L is a -*o&&' o-ne s$%si iar' o, petitioner PNB, t*ere is no s*o-in+ o, t*e in i(ative ,a(tors t*at t*e ,or)er (orporation is a )ere instr$)enta&it' o, t*e &atter are present. Neit*er is t*ere a e)onstration t*at an' o, t*e evi&s so$+*t to %e prevente %' t*e o(trine o, pier(in+ t*e (orporate vei& e2ists. Ines(apa%&', t*ere,ore, t*e o(trine o, pier(in+ t*e (orporate vei& %ase on t*e a&ter e+o or instr$)enta&it' o(trine ,in s no app&i(ation in t*e (ase at %ar. In an' (ase, t*e parentJs$%si iar' re&ations*ip %et-een PNB an PNBJI3L is not t*e si+ni,i(ant &e+a& re&ations*ip invo&ve in t*is (ase sin(e t*e petitioner -as not s$e %e(a$se it is t*e parent (o)pan' o, PNBJI3L. Rat*er, t*e petitioner -as s$e %e(a$se it a(te as an attorne'JinJ,a(t o, PNBJI3L in initiatin+ t*e ,ore(&os$re pro(ee in+s. A s$it a+ainst an a+ent (annot -it*o$t (o)pe&&in+ reasons %e (onsi ere a s$it a+ainst t*e prin(ipa&. Un er t*e R$&es o, Co$rt, ever' a(tion )$st %e prose($te or e,en e in t*e na)e o, t*e rea& part'JinJinterest, $n&ess ot*er-ise a$t*ori.e %' &a- or t*ese R$&es. In )an ator' ter)s, t*e R$&es re:$ire t*at 0partiesJinJinterest -it*o$t -*o) no ,ina& eter)ination (an %e *a , an a(tion s*a&& %e /oine eit*er as p&ainti,,s or e,en ants.0 In t*e (ase at %ar, t*e in/$n(tion s$it is ire(te on&' a+ainst t*e a+ent, not t*e prin(ipa&. Anent t*e iss$an(e o, t*e pre&i)inar' in/$n(tion, t*e sa)e )$st %e &i,te as it is a )ere provisiona& re)e ' %$t a /$n(t to t*e )ain s$it. A -rit o, pre&i)inar' in/$n(tion is an an(i&&ar' or preventive re)e ' t*at )a' on&' %e resorte to %' a &iti+ant to prote(t or preserve *is ri+*ts or interests an ,or no ot*er p$rpose $rin+ t*e pen en(' o, t*e prin(ipa& a(tion. T*e is)issa& o, t*e prin(ipa& a(tion t*$s res$&ts in t*e enia& o, t*e pra'er ,or t*e iss$an(e o, t*e -rit. 3$rt*er, t*ere is no s*o-in+ t*at respon ents are entit&e to t*e iss$an(e o, t*e -rit. Se(tion <, R$&e K=, o, t*e 788A R$&es o, Civi& Pro(e $re provi es>

SECTION <. Gro$n s ,or iss$an(e o, pre&i)inar' in/$n(tion. # A pre&i)inar' in/$n(tion )a' %e +rante -*en it is esta%&is*e > 4a9 T*at t*e app&i(ant is entit&e to t*e re&ie, e)an e , an t*e -*o&e or part o, s$(* re&ie, (onsists in restrainin+ t*e (o))ission or (ontin$an(e o, t*e a(t or a(ts (o)p&aine o,, or in re:$irin+ t*e per,or)an(e o, an a(t or a(ts, eit*er ,or a &i)ite perio or perpet$a&&', 4%9 T*at t*e (o))ission, (ontin$an(e or nonJper,or)an(e o, t*e a(ts or a(ts (o)p&aine o, $rin+ t*e &iti+ation -o$& pro%a%&' -or; in/$sti(e to t*e app&i(ant? or 4(9 T*at a part', (o$rt, a+en(' or a person is oin+, t*reatenin+, or is atte)ptin+ to o, or is pro($rin+ or s$,,erin+ to %e one, so)e a(t or a(ts pro%a%&' in vio&ation o, t*e ri+*ts o, t*e app&i(ant respe(tin+ t*e s$%/e(t o, t*e a(tion or pro(ee in+, an ten in+ to ren er t*e /$ +)ent ine,,e(t$a&. T*$s, an in/$n(tive re)e ' )a' on&' %e resorte to -*en t*ere is a pressin+ ne(essit' to avoi in/$rio$s (onse:$en(es -*i(* (annot %e re)e ie $n er an' stan ar (o)pensation. Respon ents o not en' t*eir in e%te ness. T*eir properties are %' t*eir o-n (*oi(e en($)%ere %' rea& estate )ort+a+es. Upon t*e nonJpa')ent o, t*e &oans, -*i(* -ere se($re %' t*e )ort+a+es so$+*t to %e ,ore(&ose , t*e )ort+a+e properties are proper&' s$%/e(t to a ,ore(&os$re sa&e. Moreover, respon ents :$estione t*e a&&e+e voi stip$&ations in t*e (ontra(t on&' -*en petitioner initiate t*e ,ore(&os$re pro(ee in+s. C&ear&', respon ents *ave ,ai&e to prove t*at t*e' *ave a ri+*t prote(te an t*at t*e a(ts a+ainst -*i(* t*e -rit is to %e ire(te are vio&ative o, sai ri+*t. T*e Co$rt is not $n)in ,$& o, t*e ,in in+s o, %ot* t*e tria& (o$rt an t*e appe&&ate (o$rt t*at t*ere )a' %e serio$s +ro$n s to n$&&i,' t*e provisions o, t*e &oan a+ree)ent. Ho-ever, as ear&ier is($sse , respon ents (o))itte t*e )ista;e o, ,i&in+ t*e (ase a+ainst t*e -ron+ part', t*$s, t*e' )$st s$,,er t*e (onse:$en(es o, t*eir error. A&& to& , respon ents o not *ave a (a$se o, a(tion a+ainst t*e petitioner as t*e &atter is not priv' to t*e (ontra(t t*e provisions o, -*i(* respon ents see; to e(&are voi . A((or in+&', t*e (ase %e,ore t*e Re+iona& Tria& Co$rt )$st %e is)isse an t*e pre&i)inar' in/$n(tion iss$e in (onne(tion t*ere-it*, )$st %e &i,te . IN VIEB O3 THE 3OREGOING, t*e petition is *ere%' GRANTED. T*e assai&e e(ision o, t*e Co$rt o, Appea&s is *ere%' REVERSED. T*e Or ers ate !$ne <C, 7888 an O(to%er 6, 7888 o, t*e Re+iona& Tria& Co$rt o, Ma;ati, Bran(* 76A in Civi& Case No. 88J7C<A are *ere%' ANNULLED an SET ASIDE an t*e (o)p&aint in sai (ase DISMISSED. SO ORDERED. P$no, Par o an Santia+o, !!., (on($r. Davi e, !r., C.!., is on o,,i(ia& &eave.

SECOND DIVISION R#UIC&I #A(A(OTO, petitioner, vs. NIS&INO LEAT&ER INDUSTRIES, INC. an I5UO NISHINO, respon ents. G.R. No. 15;2"*. Ap!43 1+, 2;;" DECISION CARPIO?(ORALES, J pIn 78=<, petitioner, R'$i(*i "a)a)oto 4"a)a)oto9, a !apanese nationa&, or+ani.e $n er P*i&ippine &a-s Ba;o Enterprises Mani&a, In(orporate 4BA5O9, a (orporation en+a+e prin(ipa&&' in &eat*er tannin+, no- ;no-n as Nis*ino Leat*er In $stries, In(. 4NLII9, one o, *erein respon ents. In 78=A, "a)a)oto an t*e ot*er respon ent, I;$o Nis*ino 4Nis*ino9, a&so a !apanese nationa&, ,or+e a Me)oran $) o, A+ree)ent $n er -*i(* t*e' a+ree to enter into a /oint vent$re -*erein Nis*ino -o$& a(:$ire s$(* n$)%er o, s*ares o, sto(; e:$iva&ent to ACE o, t*e a$t*ori.e (apita& sto(; o, BA5O. Event$a&&', Nis*ino an *is %rot*er "os*ino%$ Nis*ino 4"os*ino%$9 a(:$ire )ore t*an ACE o, t*e a$t*ori.e (apita& sto(; o, BA5O, re $(in+ "a)a)oto1s invest)ent t*erein to, %' *is (&ai), 7CE, &ess t*an 7CE a((or in+ to Nis*ino. T*e (orporate na)e o, BA5O -as &ater (*an+e to, as re,&e(te ear&ier, its ($rrent na)e NLII. Ne+otiations s$%se:$ent&' ens$e in &i+*t o, a p&anne ta;eover o, NLII %' Nis*ino -*o -o$& %$'Jo$t t*e s*ares o, sto(; o, "a)a)oto. In t*e (o$rse o, t*e ne+otiations, "os*ino%$ an Nis*ino1s (o$nse& Att'. E))an$e& G. Do(e 4Att'. Do(e9 a vise "a)a)oto %' &etter ate O(to%er <C, 7887, t*e pertinent portions o, -*i(* ,o&&o-> Here$n er is a si)p&e )e)oran $) o, t*e s$%/e(t )atters is($sse -it* )e %' Mr. "os*ino%$ Nis*ino 'ester a', O(to%er @8t*, %ase on t*e &etter o, Mr. I;$o Nis*ino ,ro) !apan, an -*i(* I a) no- trans)ittin+ to 'o$. 222 222 222 7@. Ma(*iner' an E:$ip)ent> T*e ,o&&o-in+ )a(*iner'He:$ip)ent *ave %een (ontri%$te %' 'o$ to t*e (o)pan'> Sp&ittin+ )a(*ine J 7 $nit Sa))in+ )a(*ine J 7 $nit 3or;&i,t J 7 $nit Dr$)s J 6 $nits To++&in+ )a(*ine J @ $nits

Re+ar in+ t*e a%ove )a(*ines, 'o$ )a' ta;e t*e) o$t -it* 'o$ 4,or 'o$r o-n $se an sa&e9 i, 'o$ -ant, provi e , t*e va&$e o, s$(* )a(*ines is e $(te ,ro) 'o$r an Ba;o1s (apita& (ontri%$tions, -*i(* -i&& %e pai to 'o$. 5in &' &et )e ;no- o, 'o$r (o))ents on a&& t*e a%ove, soonest. 222 222 222 4E)p*asis an $n ers(orin+ s$pp&ie 9 On t*e %asis o, s$(* &etter, "a)a)oto atte)pte to re(over t*e )a(*ineries an e:$ip)ent -*i(* -ere, %' "a)a)oto1s a )ission, part o, *is invest)ent in t*e (orporation, %$t *e -as ,r$strate %' respon ents, ra-in+ "a)a)oto to ,i&e on !an$ar' 7K, 788@ %e,ore t*e Re+iona& Tria& Co$rt 4RTC9 o, Ma;ati a (o)p&aint a+ainst t*e) ,or rep&evin. Bran(* 6K o, t*e Ma;ati RTC iss$e a -rit o, rep&evin a,ter "a)a)oto ,i&e a %on . = In t*eir Ans-er -it* Co$nter(&ai), respon ents (&ai)e t*at t*e )a(*ineries an e:$ip)ent s$%/e(t o, rep&evin ,or) part o, "a)a)oto1s (apita& (ontri%$tions in (onsi eration o, *is e:$it' in NLII an s*o$& t*$s %e treate as (orporate propert'? an t*at t*e a%oveJsai &etter o, Att'. Do(e to "a)a)oto -as )ere&' a proposa&, 0(on itione on F"a)a)oto1sG se&&Jo$t to . . . Nis*ino o, *is entire e:$it'0, -*i(* proposa& -as 'et to %e a$t*ori.e %' t*e sto(;*o& ers an Boar o, Dire(tors o, NLII. B' -a' o, Co$nter(&ai), respon ents, a&&e+in+ t*at t*e' s$,,ere a)a+e $e to t*e sei.$re via t*e i)p&e)entation o, t*e -rit o, rep&evin over t*e )a(*ineries an e:$ip)ent, pra'e ,or t*e a-ar to t*e) o, )ora& an e2e)p&ar' a)a+es, attorne'1s ,ees an &iti+ation e2penses, an (osts o, s$it. T*e tria& (o$rt, %' De(ision o, !$ne 8, 788K, e(i e t*e (ase in ,avor o, "a)a)oto, isposin+ t*$s> BHERE3ORE, /$ +)ent is *ere%' ren ere > 479 e(&arin+ p&ainti,, as t*e ri+*t,$& o-ner an possessor o, t*e )a(*ineries in :$estion, an )a;in+ t*e -rit o, sei.$re per)anent? 4@9 or erin+ e,en ants to pa' p&ainti,, attorne'1s ,ees an e2penses o, &iti+ation in t*e a)o$nt o, 3i,t' T*o$san Pesos 4PKC,CCC.CC9, P*i&ippine C$rren('? 4<9 is)issin+ e,en ants1 (o$nter(&ai)s ,or &a(; o, )erit? an 469 or erin+ e,en ants to pa' t*e (osts o, s$it. SO ORDERED. 4Un ers(orin+ s$pp&ie 9 On appea&, t*e Co$rt o, Appea&s *e& in ,avor o, *erein respon ents an a((or in+&' reverse t*e RTC e(ision an is)isse t*e (o)p&aint. In so *o& in+, t*e appe&&ate (o$rt ,o$n t*at t*e )a(*ineries an e:$ip)ent (&ai)e %' "a)a)oto are (orporate propert' o, NLII an )a' not t*$s %e retrieve -it*o$t t*e a$t*orit' o, t*e NLII Boar o, Dire(tors? an t*at petitioner1s ar+$)ent t*at Nis*ino an "a)a)oto (annot *i e %e*in t*e s*ie& o, (orporate ,i(tion oes not &ie, nor oes petitioner1s invo(ation o, t*e o(trine o, pro)issor' estoppe&. At t*e sa)e ti)e, t*e Co$rt o, Appea&s ,o$n no +ro$n to s$pport respon ents1 Co$nter(&ai).

T*e Co$rt o, Appea&s *avin+ enie *is Motion ,or Re(onsi eration, "a)a)oto ,i&e t*e present petition, ,a$&tin+ t*e Co$rt o, Appea&s> A. . . . IN HOLDING THAT THE VEIL O3 CORPORATE 3ICTION SHOULD NOT BE PIERCED IN THE CASE AT BAR. B. . . . IN HOLDING THAT THE DOCTRINE O3 PROMISSOR" ESTOPPEL DOES NOT APPL" TO THE CASE AT BAR. C. . . . IN HOLDING THAT RESPONDENTS ARE NOT LIABLE 3OR ATTORNE"1S 3EES. T*e reso&$tion o, t*e petition *in+es, in t*e )ain, on -*et*er t*e a vi(e in t*e &etter o, Att'. Do(e t*at "a)a)oto )a' retrieve t*e )a(*ineries an e:$ip)ent, -*i(* a )itte &' -ere part o, *is invest)ent, %o$n t*e (orporation. T*e Co$rt *o& s in t*e ne+ative. In ee , -it*o$t a Boar Reso&$tion a$t*ori.in+ respon ent Nis*ino to a(t ,or an in %e*a&, o, t*e (orporation, *e (annot %in t*e &atter. Un er t*e Corporation La-, $n&ess ot*er-ise provi e , (orporate po-ers are e2er(ise %' t*e Boar o, Dire(tors. Ur+in+ t*is Co$rt to pier(e t*e vei& o, (orporate ,i(tion, "a)a)oto ar+$es, vi..> D$rin+ t*e ne+otiations, t*e iss$e as to t*e o-ners*ip o, t*e Ma(*inerFiesG never (a)e $p. Neit*er i t*e iss$e on t*e proper pro(e $re to %e ta;en to e2e($te t*e (o)p&ete ta;eJover o, t*e Co)pan' (o)e $p sin(e I;$o, "os*ino%$, an "a)a)oto -ere t*e o-ners t*ereo,, t*e presen(e o, ot*er sto(;*o& ers %ein+ on&' ,or t*e p$rpose o, (o)p&'in+ -it* t*e )ini)$) re:$ire)ents o, t*e &a-. B*at (o$rse o, a(tion t*e Co)pan' e(i es to o or not to o epen s not on t*e 0ot*er )e)%ers o, t*e Boar o, Dire(tors0. It epen s on -*at I;$o an "os*ino%$ e(i e. T*e Co)pan' is %$t a )ere instr$)enta&it' o, I;$o Fan G "os*ino%$. 222 222 222 . . . T*e Co)pan' *ar &' *o& s %oar )eetin+s. It *as an ina(tive %oar , t*e ire(tors are ire(tors in na)e on&' an are t*ere to o t*e %i in+ o, t*e Nis*FiGnos, not*in+ )ore. Its )in$tes are paper )in$tes. . . . 222 222 222 T*e ,a(t t*at t*e parties starte at a ACJ<C ratio an "a)a)oto1s per(enta+e e(&ine to 7CE oes not )ean t*e @CE -ent to ot*ers. . . . T*e @CE -ent to no one e&se %$t I;$o *i)se&,. . . . "os*ino%$ is t*e 'o$n+er %rot*er o, I;$o an *as no sa' at a&& in t*e %$siness. On&' I;$o )a;es t*e e(isions. T*ere -ere, t*ere,ore, no ot*er )e)%ers o, t*e Boar -*o *ave not +iven t*eir approva&. @D 4E)p*asis an $n ers(orin+ s$pp&ie 9 B*i&e t*e vei& o, separate (orporate persona&it' )a' %e pier(e -*en t*e (orporation is )ere&' an a /$n(t, a %$siness (on $it, or a&ter e+o o, a person, t*e )ere o-ners*ip %' a

sin+&e sto(;*o& er o, even a&& or near&' a&& o, t*e (apita& sto(;s o, a (orporation is not %' itse&, a s$,,i(ient +ro$n to isre+ar t*e separate (orporate persona&it'. T*e e&e)ents eter)inative o, t*e app&i(a%i&it' o, t*e o(trine o, pier(in+ t*e vei& o, (orporate ,i(tion ,o&&o-> 07. Contro&, not )ere )a/orit' or (o)p&ete sto(; (ontro&, %$t (o)p&ete o)ination, not on&' o, ,inan(es %$t o, po&i(' an %$siness pra(ti(e in respe(t to t*e transa(tion atta(;e so t*at t*e (orporate entit' as to t*is transa(tion *a at t*e ti)e no separate )in , -i&& or e2isten(e o, its o-n? @. S$(* (ontro& )$st *ave %een $se %' t*e e,en ant to (o))it ,ra$ or -ron+, to perpet$ate t*e vio&ation o, a stat$tor' or ot*er positive &e+a& $t', or is*onest an $n/$st a(t in (ontravention o, t*e p&ainti,,1s &e+a& ri+*ts? an <. T*e a,oresai (ontro& an %rea(* o, $t' )$st pro2i)ate&' (a$se t*e in/$r' or $n/$st &oss (o)p&aine o,. T*e a%sen(e o, an' one o, t*ese e&e)ents prevents 0pier(in+ t*e (orporate vei&.0 In app&'in+ t*e 1instr$)enta&it'1 or 1a&ter e+o1 o(trine, t*e (o$rts are (on(erne -it* rea&it' an not ,or), -it* *o- t*e (orporation operate an t*e in ivi $a& e,en ant1s re&ations*ip to t*at operation.0 4Ita&i(s in t*e ori+ina&? e)p*asis an $n ers(orin+ s$pp&ie 9 In re&ation to t*e se(on e&e)ent, to isre+ar t*e separate /$ri i(a& persona&it' o, a (orporation, t*e -ron+ oin+ or $n/$st a(t in (ontravention o, a p&ainti,,1s &e+a& ri+*ts )$st %e (&ear&' an (onvin(in+&' esta%&is*e ? it (annot %e pres$)e . Bit*o$t a e)onstration t*at an' o, t*e evi&s so$+*t to %e prevente %' t*e o(trine is present, it oes not app&'. In t*e (ase at %ar, t*ere is no s*o-in+ t*at Nis*ino $se t*e separate persona&it' o, NLII to $n/$st&' a(t or o -ron+ to "a)a)oto in (ontravention o, *is &e+a& ri+*ts. "a)a)oto ar+$es, in anot*er vein, t*at pro)issor' estoppe& &ies a+ainst respon ents, t*$s> Un er t*e o(trine o, pro)issor' estoppe&, . . . estoppe& )a' arise ,ro) t*e )a;in+ o, a pro)ise, even t*o$+* -it*o$t (onsi eration, i, it -as inten e t*at t*e pro)ise s*o$& %e re&ie $pon an in ,a(t it -as re&ie $pon, an i, a re,$sa& to en,or(e it -o$& %e virt$a&&' to san(tion t*e perpetration o, ,ra$ or -o$& res$&t in ot*er in/$sti(e. . . . I;$o an "os*ino%$ -ante "a)a)oto o$t o, t*e Co)pan'. 3or t*is p$rpose ne+otiations -ere *a %et-een t*e parties. Havin+ e2press&' +iven "a)a)oto, t*ro$+* t*e Letter an t*ro$+* a s$%se:$ent )eetin+ at t*e Mani&a Penins$&a -*ere I;$o *i)se&, (on,ir)e t*at "a)a)oto )a' ta;e o$t t*e Ma(*iner' ,ro) t*e Co)pan' an'ti)e, respon ents s*o$& not %e a&&o-e to t$rn aro$n an o t*e e2a(t opposite o, -*at t*e' *ave represente t*e' -i&& o. In para+rap* t-e&ve 47@9 o, t*e Letter, "a)a)oto -as e2press&' a vise t*at *e (o$& ta;e o$t t*e Ma(*iner' i, *e -ante to so, provi e t*at t*e va&$e o, sai )a(*ines -o$& %e e $(te ,ro) *is (apita& (ontri%$tion . . . . 222 222 222

Respon ents (annot no- ar+$e t*at t*e' i not inten ,or "a)a)oto to re&' $pon t*e Letter. T*at -as t*e p$rpose o, t*e Letter to %e+in -it*. PetitionerFsG in ,a(t, re&ie $pon sai Letter an s$(* re&ian(e -as ,$rt*er stren+t*ene $rin+ t*eir )eetin+ at t*e Mani&a Penins$&a. To san(tion respon ents1 atte)pt to eva e t*eir o%&i+ation -o$& %e to san(tion t*e perpetration o, ,ra$ an in/$sti(e a+ainst petitioner. 4Un ers(orin+ s$pp&ie 9 It %ears notin+, *o-ever, t*at t*e a,ore)entione para+rap* 7@ o, t*e &etter is ,o&&o-e %' a re:$est ,or "a)a)oto to +ive *is 0(o))ents on a&& t*e a%ove, soonest.0 B*at -as t*$s pro,,ere to "a)a)oto -as not a pro)ise, %$t a )ere o,,er, s$%/e(t to *is a((eptan(e. Bit*o$t a((eptan(e, a )ere o,,er pro $(es no o%&i+ation. T*$s, $n er Arti(&e 77=7 o, t*e Civi& Co e, 0FiGn (on itiona& o%&i+ations, t*e a(:$isition o, ri+*ts, as -e&& as t*e e2tin+$is*)ent or &oss o, t*ose a&rea ' a(:$ire , s*a&& epen $pon t*e *appenin+ o, t*e event -*i(* (onstit$tes t*e (on ition.0 In t*e (ase at %ar, t*ere is no s*o-in+ o, (o)p&ian(e -it* t*e (on ition ,or a&&o-in+ "a)a)oto to ta;e t*e )a(*ineries an e:$ip)ent, na)e&', *is a+ree)ent to t*e e $(tion o, t*eir va&$e ,ro) *is (apita& (ontri%$tion $e *i) in t*e %$'Jo$t o, *is interests in NLII. "a)a)oto1s a&&e+ation t*at *e a+ree to t*e (on ition re)aine /$st t*at, no proo, t*ereo, *avin+ %een presente . T*e )a(*ineries an e:$ip)ent, -*i(* (o)prise "a)a)oto1s invest)ent in NLII, <D t*$s re)aine part o, t*e (apita& propert' o, t*e (orporation. It is sett&e t*at t*e propert' o, a (orporation is not t*e propert' o, its sto(;*o& ers or )e)%ers. Un er t*e tr$st ,$n o(trine, t*e (apita& sto(;, propert', an ot*er assets o, a (orporation are re+ar e as e:$it' in tr$st ,or t*e pa')ent o, (orporate (re itors -*i(* are pre,erre over t*e sto(;*o& ers in t*e istri%$tion o, (orporate assets. T*e istri%$tion o, (orporate assets an propert' (annot %e )a e to epen on t*e -*i)s an (apri(es o, t*e sto(;*o& ers, o,,i(ers, or ire(tors o, t*e (orporation $n&ess t*e in ispensa%&e (on itions an pro(e $res ,or t*e prote(tion o, (orporate (re itors are ,o&&o-e . BHERE3ORE, t*e petition is DENIED. Costs a+ainst petitioner. SO ORDERED. Tin+a, Ve&as(o, !r. an Brion, !!., (on($r. L$is$)%in+, !., is on o,,i(ia& &eave.