1. Magsaysay-Labrador vs. CA G.R. No.

58168 December 19, 1989

2. Bataan Shipyard vs. PCGG G.R. No. 75885 May 27, 1987
3. (X) Coastal Pacific Trading vs. Southern Rolling Mills., Co. G.R. No. 118692 July 28, 2006
4. Filipinas Broadcasting Network vs. Ago Medical and Educational Center G.R. No. 141994.
January 17, 2005
5. (X)Times Transportation Co. vs. Santos Sotelo G.R. No. 163786. February 16, 2005
6. Concept Builders vs. NLRC G.R. No. 108734. May 29, 1996"

Magsaysay-Labrador vs CA Case Digest

Magsaysay-Labrador, et. al. vs. Court of Appeals
[GR 58168, 19 December 1989]
Facts:
On 9 February 1979, Adelaida Rodriguez-Magsaysay, widow and special administratix of the
estate of the late Senator Genaro Magsaysay, brought before the then Court of First Instance of
Olongapo an action against Artemio Panganiban, Subic Land Corporation (SUBIC), Filipinas
Manufacturer's Bank (FILMANBANK) and the Register of Deeds of Zambales, for the annulment
of the Deed of Assignment executed by the late Senator in favor of SUBIC (as a result of which
TCT 3258 was cancelled and TCT 22431 issued in the name of SUBIC), for the annulment of
the Deed of Mortgage executed by SUBIC in favor of FILMANBANK (dated 28 April 1977 in the
amount of P 2,700,000.00), and cancellation of TCT 22431 by the Register of Deeds, and for
the latter to issue a new title in her favor. On 7 March 1979, Concepcion Magsaysay-Labrador,
Soledad Magsaysay-Cabrera, Luisa Magsaysay-Corpuz, Felicidad Magsaysay, and Mercedes
Magsaysay-Diaz, sisters of the late senator, filed a motion for intervention on the ground that on
20 June 1978, their brother conveyed to them 1/2 of his shareholdings in SUBIC or a total of
416,566.6 shares and as assignees of around 41 % of the total outstanding shares of such
stocks of SUBIC, they have a substantial and legal interest in the subject matter of litigation and
that they have a legal interest in the success of the suit with respect to SUBIC. On 26 July 1979,
the trial court denied the motion for intervention, and ruled that petitioners have no legal interest
whatsoever in the matter in litigation and their being alleged assignees or transferees of certain
shares in SUBIC cannot legally entitle them to intervene because SUBIC has a personality
separate and distinct from its stockholders.
On appeal, the Court of Appeals found no factual or legal justification to disturb the findings of
the lower court. The appellate court further stated that whatever claims the Magsaysay sisters
have against the late Senator or against SUBIC for that matter can be ventilated in a separate
proceeding. The motion for reconsideration of the Magsaysay sisters was denied. Hence, the
petition for review on certiorari.
Issue:
Whether the Magsaysay sister, allegedly stockholders of SUBIC, are interested parties in a case
where corporate properties are in dispute.
Held:
Viewed in the light of Section 2, Rule 12 of the Revised Rules of Court, the Magsaysay sisters
have no legal interest in the subject matter in litigation so as to entitle them to intervene in the
proceedings. To be permitted to intervene in a pending action, the party must have a legal
interest in the matter in litigation, or in the success of either of the parties or an interest against
both, or he must be so situated as to be adversely affected by a distribution or other disposition
of the property in the custody of the court or an officer thereof . Here, the interest, if it exists at
all, of the Magsaysay sisters is indirect, contingent, remote, conjectural, consequential and
collateral. At the very least, their interest is purely inchoate, or in sheer expectancy of a right in
the management of the corporation and to share in the profits thereof and in the properties and
assets thereof on dissolution, after payment of the corporate debts and obligations. While a
share of stock represents a proportionate or aliquot interest in the property of the

corporation, it does not vest the owner thereof with any legal right or title to any of the
property, his interest in the corporate property being equitable or beneficial in nature.
Shareholders are in no legal sense the owners of corporate property, which is owned by
the corporation as a distinct legal person.

150 SCRA 181 Business Organization Corporation Law A Corporation

Cannot Invoke the Right Against Self-Incrimination
FACTS:
When President Corazon Aquino took power, the Presidential Commission on Good
Government (PCGG) was formed in order to recover ill gotten wealth allegedly acquired by
former President Marcos and his cronies. Aquino then issued two executive orders in 1986 and
pursuant thereto, a sequestration and a takeover order were issued against Bataan Shipyard &
engineering Co., Inc. (BASECO). BASECO was alleged to be in actuality owned and controlled
by the Marcoses through the Romualdez family, and in turn, through dummy stockholders.
The sequestration order issued in 1986 required, among others, that BASECO produce
corporate records from 1973 to 1986 under pain of contempt of the PCGG if it fails to do so.
BASECO assails this order as it avers, among others, that it is against BASECOs right against
self incrimination and unreasonable searches and seizures.
ISSUE:
Whether or not BASECO is correct.
HELD:
No. First of all, PCGG has the right to require the production of such documents pursuant to the
power granted to it. Second, and more importantly, right against self-incrimination has no
application to juridical persons. There is a reserve right in the legislature to investigate the
contracts of a corporation and find out whether it has exceeded its powers. It would be a strange
anomaly to hold that a state, having chartered a corporation like BASECO to make use of
certain franchises, could not, in the exercise of sovereignty, inquire how these franchises had
been employed, and whether they had been abused, and demand the production of the
corporate books and papers for that purpose.
Neither is the right against unreasonable searches and seizures applicable here. There were no
searches made and no seizure pursuant to any search was ever made. BASECO was merely
ordered to produce the corporate records.

G.R. No. 75885, May 27, 1987

Bataan Shipyard & Engineering Co
vs. PCGG
Ponente: Narvasa
Facts:
Bataan Shipyard and Engineering Co., Inc (BASECO) private corporation
Presidential Commission on Good Government (PCGG) issued the sequestration
order
The corporation known as BASECO was owned or controlled by President Marcos
during his administration, through nominees, by taking undue advantage of his
public office and/or using his powers, authority, or influence, and that it
was by and through the same means, that BASECO had taken over the business
and/or assets of the National Shipyard and Engineering Co., Inc., and other
government-owned or controlled entities.
As evidence found in Malacanang shortly after the sudden flight of President
Marcos were certificates corresponding to more than ninety-five percent (95%)
of all the outstanding shares of stock of BASECO, endorsed in blank, together
with deeds of assignment of practically all the outstanding shares of stock
of the three (3) corporations above mentioned (which hold 95.82% of all
BASECO stock), signed by the owners thereof although not notarized. While the
petitioner's counsel was quick to dispute this asserted fact, assuring the
Court that the BASECO stockholders were still in possession of their
respective stock certificates and had never endorsed them in blank or to
anyone else, that denial is exposed by his own prior and subsequent recorded
statements as a mere gesture of defiance rather than a verifiable factual
declaration.
In accordance with Executive Orders Numbered 1 and 2 promulgated by President
Corazon
Aquino,
PCGG
through
its
commissioners
and
agent
ordered
sequestration, takeover and other provisional orders affecting BASECO.
Commissioner Diaz invoked the provisions of Section 3 (c) of Executive Order
No. 1, empowering the Commission To provisionally takeover in the public
interest or to prevent its disposal or dissipation, business enterprises and
properties taken over by the government of the Marcos Administration or by
entities or persons close to former President Marcos, until the transactions
leading to such acquisition by the latter can be disposed of by the
appropriate authorities.
Issues:
1.
Are the provisional remedies involved in this case unconstitutional?
2.
Are the acts of PCGG and its Commissioners done without or in excess
of its powers or with grave abuse of discretion?
3.
Was there a violation of the right against self-Incrimination and
unreasonable searches and seizures?

Ruling:
1. No.
The Provisional or "Freedom" Constitution recognizes the power and duty of
the President to enact "measures to achieve the mandate of the people to
recover ill- gotten properties amassed by the leaders and supporters of the
Marcos regime and protect the interest of the people through orders of
sequestration or freezing of assets or accounts. And as also already adverted
to, Section 26, Article XVIII of the 1987 Constitution treats of, and
ratifies the authority to issue sequestration or freeze orders under
Proclamation No. 3. The institution of these provisional remedies is also
premised upon the State's inherent police power, regarded, as t lie power of
promoting the public welfare by restraining and regulating the use of liberty
and property, and as the most essential, insistent and illimitable of powers
in the promotion of general welfare and the public interest, and said to be
co-extensive with self-protection and not inaptly termed also the law of
overruling necessity.
2. No, PCGGs general function is to conduct investigations in order to
collect
evidence
establishing
instances
of
ill-gotten
wealth,
issue
sequestration, and such orders as may be warranted by the evidence thus
collected and as may be necessary to preserve and conserve the assets of
which it takes custody and control and prevent their disappearance, loss or
dissipation; and eventually file and prosecute in the proper court of
competent jurisdiction all cases investigated by it as may be warranted by
its findings. It does not try and decide, or hear and determine, or
adjudicate with any character of finality or compulsion, cases involving the
essential issue of whether or not property should be forfeited and
transferred to the State because ill-gotten within the meaning of the
Constitution and the executive orders.

3. No. The right against self-incrimination has no application to juridical

persons. While an individual may lawfully refuse to answer incriminating
questions unless protected by an immunity statute, it does not follow that a
corporation, vested with special privileges and franchises, may refuse to
show its hand when charged with an abuse of such privileges.

Concept Builders Inc. vs. NLRC (May 29, 1996)

FACTS:
1. Private Respondents were the employees of the Petitioner Corporation. They filed illegal
dismissal, unfair labor practice and claimed for their benefits with the NLRC. They alleged that
their contract of employment had not yet expired and the project in which they were hired were
not yet completed, as stated in the written notices sent by the Company.
2. NLRC, ruled in favor of the Employees. At the time of the termination of private respondents
employment, the project in which they were hired had not yet been finished and
completed. Petitioner had to engage the services of sub-contractors whose workers performed
the functions of private respondents.
3. An alias Writ of Execution was issued by the Labor Arbiter to collect the balance of the
judgment award and to reinstate private respondents. However, the sheriff failed to enforce
because the security guard on the premises refused him to enter on the ground that, it is no longer
occupied by the petitioner.
4. A certain Dennis Cuyegkeng filed a third-party claim with the Labor Arbiter alleging that the
properties sought to be levied upon by the sheriff were owned by Hydro (Phils.), Inc. (HPPI) of
which he is the Vice-President. He alleged that HPPI is a manufacturing firm while petitioner
was then engaged in construction.
5. Private respondents filed a Motion for Issuance of a Break-Open Order, alleging that HPPI
and petitioner corporation were owned by the same incorporator and stockholders. NLRC
granted the Motion.
ISSUES:
1. WON the Sister Company (HPPI) has a personality separate and distinct from the petitioner
corporation (CONCEPT BUILDERS)?
2. WON HPPI is used as a shield to evade the corporations subsidiary liability for damages?
3. WON NLRC commited a grave abuse of discretion when it issued a break open order?

HELD:
PETITIONER DENIED.
1. The Sister Company has NO separate and distinct personality from the Concept Builders 2.
HPPI is used to Evade Corporations liability.
3. NLRC did not commit a grave abuse of discretion when it issued a break-open order against
HHPI.
RATIONALE:
1. It is a fundamental principle of corporation law that a corporation is an entity separate and
distinct from its stockholders and from other corporations to which it may be connected.8 But,
this separate and distinct personality of a corporation is merely a fiction created by law for
convenience and to promote justice.9 So, when the notion of separate juridical personality is
used to defeat public convenience, justify wrong, protect fraud or defend crime, or is used as a
device to defeat the labor laws,10 this separate personality of the corporation may be disregarded
or the veil of corporate fiction pierced.11 This is true likewise when the corporation is merely an
adjunct, a business conduit or an alter ego of another corporation
2. The conditions under which the juridical entity may be disregarded vary according to the
peculiar facts and circumstances of each case. No hard and fast rule can be accurately laid down,
but certainly, there are some probative factors of identity that will justify the application of the
doctrine of piercing the corporate veil, to wit:
1. Stock ownership by one or common ownership of both corporations.
2. Identity of directors and officers.
3. The manner of keeping corporate books and records.
4. Methods of conducting the business.13
3. The test in determining the applicability of the doctrine of piercing the veil of corporate fiction
is as follows:
1. Control, not mere majority or complete stock control, but complete domination, not only of
finances but of policy and business practice in respect to the transaction attacked so that the
corporate entity as to this transaction had at the time no separate mind, will or existence of its
own;
2. Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the
violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention
of plaintiffs legal rights; and
3. The aforesaid control and breach of duty must proximately cause the injury or unjust loss
complained of.

The absence of any one of these elements prevents piercing the corporate veil. in applying the
instrumentality or alter ego doctrine, the courts are concerned with reality and not form, with
how the corporation operated and the individual defendants relationship to that operation.

4. NLRC stated that:

Both information sheets were filed by the same Virgilio O. Casino as the corporate secretary of
both corporations. It would also not be amiss to note that both corporations had
the same president, the same board of directors, the same corporate officers, and substantially
the same subscribers.
From the foregoing, it appears that, among other things, the respondent (herein petitioner) and
the third-party claimant shared the same address and/or premises. Under this circumstances,
(sic) it cannot be said that the property levied upon by the sheriff were not of respondents.16
Clearly, petitioner ceased its business operations in order to evade the payment to private
respondents of backwages and to bar their reinstatement to their former positions. HPPI is
obviously a business conduit of petitioner corporation and its emergence was skillfully
orchestrated to avoid the financial liability that already attached to petitioner corporation.
5. It is very obvious that the second corporation seeks the protective shield of a corporate fiction
whose veil in the present case could, and should, be pierced as it was deliberately and
maliciously designed to evade its financial obligation to its employees.
In view of the failure of the sheriff, in the case at bar, to effect a levy upon the property subject
of the execution, private respondents had no other recourse but to apply for a break-open order
after the third-party claim of HPPI was dismissed for lack of merit by the NLRC.
WHEREFORE, the petition is DISMISSED and the assailed resolutions of the NLRC,
dated April 23, 1992 and December 3, 1992, are AFFIRMED.
SO ORDERED