Corpo Full Cases

7/23/2019 Corpo Full Cases

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Republic of the Philippines

Supreme CourtManila

THIRD DIVISION

SUBHASH C. PASRICHA and

JOSEPHINE A. PASRICHA,

Petitioners,

- versus -

DON LUIS DISON REALTY, INC.,

Respondent.

G.R. No. 13640

Present:

YNARES-SANTIAGO, J.,

Chairperson,

QUISUMBING,AUSTRIA-MARTINE!,"#I"O-NA!ARIO, $nd

NA"#URA, JJ ..

Pro%u&'$ted: M$r() *+,

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J .!

T)is is $ petition /or revie0 on certiorari under Ru&e +1 o/ t)e Ru&es o/

"ourt see2in' t)e revers$& o/ t)e 3e(ision4*5 o/ t)e "ourt o/ Appe$&s 6"A7

d$ted M$8 9, * $nd its Reso&ution45 d$ted 3e(e%;er *, * in "A-G.R. SP

No. <==< dis%issin' t)e petition /i&ed ;8 petitioners >osep)ine $nd Su;)$s)

P$sri()$.

T)e /$(ts o/ t)e ($se, $s (u&&ed /ro% t)e re(ords, $re $s /o&&o0s:

http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/136409.htm#_ftn1






Respondent 3on ?uis 3ison Re$&t8, In(. $nd petitioners e@e(uted t0o

"ontr$(ts o/ ?e$se4<5 0)ere;8 t)e /or%er, $s &essor, $'reed to &e$se to t)e &$tter

Units , +, <, <<, <+, <1, <9, <= $nd < o/ t)e S$n ?uis Bui&din', &o($ted $t

*9 M.Y. Oros$ (or. T.M. $&$0 Streets, Er%it$, M$ni&$. Petitioners, in turn,$'reed to p$8 %ont)&8 rent$&s, $s /o&&o0s:

"o# Roo$% 3&'3(:

ro% M$r() *, ** to Au'ust <*, ** P1,.CP*,.ro% Septe%;er *, ** to e;ru$r8 , * P1,1.CP**,.ro% M$r() *, * to e;ru$r8 , *< P9,1.CP*,*.ro% M$r() *, *< to e;ru$r8 , *+ P9,911.CP*<,<*.ro% M$r() *, *+ to e;ru$r8 , *1 P=,<.1CP*+,9+*.ro% M$r() *, *1 to e;ru$r8 , *9 P,1.11CP*9,*1.*ro% M$r() *, *9 to e;ru$r8 , *= P,1=.*CP*=,=*1.9*ro% M$r() *, *= to e;ru$r8 , * P,=+<.1CP*,+=.*=ro% M$r() *, * to e;ru$r8 , * P*,=*=.1CP*,+<1.ro% M$r() *, * to e;ru$r8 , P**,=.=1CP<,1=.+4+5

"o# Roo$% && and &4!

E//e(tive >u&8 *, * P*,. 0it) $n in(re%ent o/ *D ever8 t0o 8e$rs.415

"o# Roo$% 33 and 34!

E//e(tive Apri& *, * P1,. 0it) $n in(re%ent o/ *D ever8 t0o 8e$rs.495

"o# Roo$% 36, 3) and 3*!

E//e(tive 0)en ten$nts v$($te s$id pre%ises P*,. 0it) $n in(re%ent o/ *D ever8 t0o 8e$rs.4=5

Petitioners 0ere, &i2e0ise, reuired to p$8 /or t)e (ost o/ e&e(tri( (onsu%ption,

0$ter ;i&&s $nd t)e use o/ te&ep)one ($;&es.45

T)e &e$se o/ Roo%s <9, <= $nd < did not %$teri$&iFe &e$vin' on&8 Roo%s , +,

<, <<, <+ $nd <1 $s su;e(ts o/ t)e &e$se (ontr$(ts.45 H)i&e t)e (ontr$(ts 0ere in

e//e(t, petitioners de$&t 0it) r$n(is P$()e(o 6P$()e(o7, t)en Gener$& M$n$'er o/

priv$te respondent. T)ere$/ter, P$()e(o 0$s rep&$(ed ;8 Ros0ind$ B$utist$ 6Ms.

















B$utist$7.4*5Petitioners re&i'ious&8 p$id t)e %ont)&8 rent$&s unti& M$8 *.4**5 A/ter t)$t, )o0ever, despite repe$ted de%$nds, petitioners (ontinuous&8 re/used

to p$8 t)e stipu&$ted rent."onseuent&8, respondent 0$s (onstr$ined to re/er t)e

%$tter to its &$08er 0)o, in turn, %$de $ /in$& de%$nd on petitioners /or t)e p$8%ent o/ t)e $((rued rent$&s $%ountin' toP*9,11.1.4*5 Be($use petitioners

sti&& re/used to (o%p&8, $ (o%p&$int /or ee(t%ent 0$s /i&ed ;8 priv$te respondent

t)rou') its represent$tive, Ms. B$utist$, ;e/ore t)e Metropo&it$n Tri$& "ourt

6MeT"7 o/ M$ni&$.4*<5 T)e ($se 0$s r$//&ed to Br$n() I $nd 0$s do(2eted $s

"ivi& "$se No. *+<1-"J.

Petitioners $d%itted t)eir /$i&ure to p$8 t)e stipu&$ted rent /or t)e &e$sed pre%ises

st$rtin' >u&8 unti& Nove%;er *, ;ut (&$i%ed t)$t su() re/us$& 0$s usti/ied

;e($use o/ t)e intern$& su$;;&e in respondent (o%p$n8 $s to t)e person $ut)oriFed

to re(eive p$8%ent.4*+5 To /urt)er usti/8 t)eir non-p$8%ent o/ rent, petitioners

$&&e'ed t)$t t)e8 0ere prevented /ro% usin' t)e units 6roo%s7 su;e(t %$tter o/ t)e

&e$se (ontr$(t, e@(ept Roo% <1. Petitioners eventu$&&8 p$id t)eir %ont)&8 rent /or

3e(e%;er * in t)e $%ount o/P<,., $nd (&$i%ed t)$t respondent 0$ived

its ri')t to (o&&e(t t)e rents /or t)e %ont)s o/ >u&8 to Nove%;er * sin(e

petitioners 0ere prevented /ro% usin' Roo%s , +, <, <<, $nd <+.4*15 #o0ever,t)e8 $'$in 0it))e&d p$8%ent o/ rents st$rtin' >$nu$r8 *< ;e($use o/ respondents

re/us$& to turn over Roo%s <9, <= $nd <.4*95 To s)o0 'ood /$it) $nd 0i&&in'ness to

p$8 t)e rents, petitioners $&&e'ed t)$t t)e8 prep$red t)e ()e(2 vou()ers /or t)eir

%ont)&8 rent$&s /ro% >$nu$r8 *< to >$nu$r8 *+.4*=5 Petitioners /urt)er $verred

in t)eir A%ended Ans0er 4*5 t)$t t)e (o%p&$int /or ee(t%ent 0$s pre%$ture&8

/i&ed, $s t)e (ontrovers8 0$s not re/erred to t)e barangay /or (on(i&i$tion.

or /$i&ure o/ t)e p$rties to re$() $n $%i($;&e sett&e%ent, t)e pre-tri$& (on/eren(e

0$s ter%in$ted. T)ere$/ter, t)e8 su;%itted t)eir respe(tive position p$pers.

On Nove%;er +, *+, t)e MeT" rendered $ 3e(ision dis%issin' t)e (o%p&$int

/or ee(t%ent.4*5 It (onsidered petitioners non-p$8%ent o/ rent$&s $s























unusti/ied. T)e (ourt )e&d t)$t %ere 0i&&in'ness to p$8 t)e rent did not $%ount to

p$8%ent o/ t)e o;&i'$tionK petitioners s)ou&d )$ve deposited t)eir p$8%ent in t)e

n$%e o/ respondent (o%p$n8. On t)e %$tter o/ possession o/ t)e su;e(t pre%ises,

t)e (ourt did not 'ive (reden(e to petitioners (&$i% t)$t priv$te respondent /$i&ed toturn over possession o/ t)e pre%ises. T)e (ourt, )o0ever, dis%issed t)e (o%p&$int

;e($use o/ Ms. B$utist$s $&&e'ed &$(2 o/ $ut)orit8 to sue on ;e)$&/ o/ t)e

(orpor$tion.

3e(idin' t)e ($se on $ppe$&, t)e Re'ion$& Tri$& "ourt 6RT"7 o/ M$ni&$, Br$n() *,

in "ivi& "$se No. +-=1*1, reversed $nd set $side t)e MeT" 3e(ision in t)is

0ise:

H#EREORE, t)e $ppe$&ed de(ision is )ere;8 reversed $nd set $side $nd$not)er one is rendered orderin' de/end$nts-$ppe&&ees $nd $&& persons (&$i%in'ri')ts under t)e%, $s /o&&o0s:

6*7 to v$($te t)e &e$sed pre%ised 6si(7 $nd restore possession t)ereo/ to p&$inti//-$ppe&&$ntK

67 to p$8 p&$inti//-$ppe&&$nt t)e su% o/ P9=,*1. representin' t)e$((rued rents in $rre$rs $s o/ Nove%;er *<, $nd t)e rents on t)e&e$sed pre%ises /or t)e su((eedin' %ont)s in t)e $%ounts st$ted in p$r$'r$p) 1 o/ t)e (o%p&$int unti& /u&&8 p$idK $nd

6<7 to p$8 $n $ddition$& su% euiv$&ent to 1D o/ t)e rent $((ounts $s$nd /or $ttorne8s /ees p&us t)e (osts o/ t)is suit.

SO OR3ERE3.45

T)e (ourt $dopted t)e MeT"s /indin' on petitioners unusti/ied re/us$& to p$8 t)e

rent, 0)i() is $ v$&id 'round /or ee(t%ent. It, )o0ever, /$u&ted t)e MeT" in

dis%issin' t)e ($se on t)e 'round o/ &$(2 o/ ($p$(it8 to sue. Inste$d, it up)e&d Ms.

B$utist$s $ut)orit8 to represent respondent not0it)st$ndin' t)e $;sen(e o/ $ ;o$rdreso&ution to t)$t e//e(t, sin(e )er $ut)orit8 0$s i%p&ied /ro% )er po0er $s $

'ener$& %$n$'erCtre$surer o/ t)e (o%p$n8.4*5

A''rieved, petitioners e&ev$ted t)e %$tter to t)e "ourt o/ Appe$&s in $ petition /or

revie0 on certiorari.45 On M$r() *, *, petitioners /i&ed $n O%ni;us









Motion4<5 to (ite Ms. B$utist$ /or (onte%ptK to stri2e do0n t)e MeT" $nd RT"

3e(isions $s &e'$& nu&&itiesK $nd to (ondu(t )e$rin's $nd o(u&$r inspe(tions or

de&e'$te t)e re(eption o/ eviden(e.Hit)out reso&vin' t)e $/ores$id %otion, on M$8

9, *, t)e "A $//ir%ed4+5

t)e RT" 3e(ision ;ut de&eted t)e $0$rd o/ $ttorne8s/ees.415

Petitioners %oved /or t)e re(onsider$tion o/ t)e $/ores$id de(ision.495 T)ere$/ter, t)e8 /i&ed sever$& %otions $s2in' t)e #onor$;&e >usti(e Ru;en T.

Re8es to in)i;it /ro% /urt)er pro(eedin' 0it) t)e ($se $&&e'ed&8 ;e($use o/ )is

(&ose $sso(i$tion 0it) Ms. B$utist$s un(&e-in-&$0.4=5

In $ Reso&ution45 d$ted 3e(e%;er *, *, t)e "A denied t)e %otions /or &$(2 o/

%erit. T)e $ppe&&$te (ourt (onsidered s$id %otions $s repetitive o/ t)eir previous

$r'u%ents, irre&ev$nt $nd o;vious&8 di&$tor8.45 As to t)e %otion /or in)i;ition o/

t)e #onor$;&e >usti(e Re8es, t)e s$%e 0$s denied, $s t)e $ppe&&$te (ourt usti(e

stressed t)$t t)e de(ision $nd t)e reso&ution 0ere not $//e(ted ;8 e@tr$neous

%$tters.4<5 ?$st&8, t)e $ppe&&$te (ourt 'r$nted respondents %otion /or e@e(ution $nd

dire(ted t)e RT" to issue $ ne0 0rit o/ e@e(ution o/ its de(ision, 0it) t)e

e@(eption o/ t)e $0$rd o/ $ttorne8s /ees 0)i() t)e "A de&eted.4<*5

Petitioners no0 (o%e ;e/ore t)is "ourt in t)is petition /or revie0

on certiorari r$isin' t)e /o&&o0in' issues:

I.

H)et)er t)is ee(t%ent suit s)ou&d ;e dis%issed $nd 0)et)er petitioners$re entit&ed to d$%$'es /or t)e un$ut)oriFed $nd %$&i(ious /i&in' ;8 Ros$rio 6si(7B$utist$ o/ t)is ee(t%ent ($se, it ;ein' (&e$r t)$t 4Ros0ind$5 0)et)er $s 'ener$&

%$n$'er or ;8 virtue o/ )er su;seuent desi'n$tion ;8 t)e Bo$rd o/ 3ire(tors $st)e (orpor$tions $ttorne8-in-/$(t )$d no +-a+ a/a2 o n% 5$n

%, independent&8 o/ 0)et)er 3ire(tor P$($n$s Order settin' $side t)e SE"revo($tion Order is $ %ere s(r$p o/ p$per.

II.






















H)et)er t)e RT"s $nd t)e #onor$;&e "ourt o/ Appe$&s /$i&ure $nd re/us$& toreso&ve t)e %ost /und$%ent$& /$(tu$& issues in t)e inst$nt ee(t%ent ($se render s$id de(isions od on # 7a 82 #a%on o7 o$/+ a8daon ;8 t)eRT" $nd t)e #onor$;&e >usti(e Ru;en Re8es o/ t)eir on%ona+ d2 no

on+2 o (&e$r&8 $nd distin(t&8 st$te t)e /$(ts $nd t)e &$0 on 0)i() $ de(ision is

;$sed 8 a+%o o reso&ve t)e de(isive /$(tu$& issues in $n8 'iven ($se. III.

H)et)er t)e 6*7 /$i&ure $nd re/us$& o/ #onor$;&e >usti(e Ru;en Re8es to in)i;it)i%se&/, despite )is $d%ission ;8 re$son o/ )is si&en(e o/ petitioners $((us$tiont)$t t)e s$id >usti(e eno8ed $ L=,. s()o&$rs)ip 'r$nt (ourtes8 o/ t)e un(&e-in-&$0 o/ respondent (orpor$tions purported 'ener$& %$n$'er $nd 67, 0orse, )is$(t o/ ru&in' $'$inst t)e petitioners $nd in /$vor o/ t)e respondent (orpor$tion(onstitute $n un(onstitution$& depriv$tion o/ petitioners propert8 0it)out due pro(ess o/ &$0.4<5

In $ddition to Ms. B$utist$s &$(2 o/ ($p$(it8 to sue, petitioners insist t)$t

respondent (o%p$n8 )$s no st$ndin' to sue $s $ uridi($& person in vie0 o/ t)e

suspension $nd eventu$& revo($tion o/ its (erti/i($te o/ re'istr$tion.4<<5 T)e8

&i2e0ise uestion t)e /$(tu$& /indin's o/ t)e (ourt on t)e ;$ses o/ t)eir ee(t%ent

/ro% t)e su;e(t pre%ises. Spe(i/i($&&8, t)e8 /$u&t t)e $ppe&&$te (ourt /or not

/indin' t)$t: *7 t)eir non-p$8%ent o/ rent$&s 0$s usti/iedK 7 t)e8 0ere deprived o/

possession o/ $&& t)e units su;e(t o/ t)e &e$se (ontr$(t e@(ept Roo% <1K $nd <7

respondent vio&$ted t)e ter%s o/ t)e (ontr$(t ;8 its (ontinued re/us$& to turn over

possession o/ Roo%s <9, <= $nd <. Petitioners /urt)er pr$8ed t)$t $ Te%por$r8

Restr$inin' Order 6TRO7 ;e issued enoinin' t)e "A /ro% en/or(in' its Reso&ution

dire(tin' t)e issu$n(e o/ $ Hrit o/ E@e(ution. T)us, in $ Reso&ution4<+5 d$ted>$nu$r8

*, *, t)is "ourt dire(ted t)e p$rties to %$int$in t)e status quo e//e(tive

i%%edi$te&8 unti& /urt)er orders.

T)e petition &$(2s %erit.

He up)o&d t)e ($p$(it8 o/ respondent (o%p$n8 to institute t)e ee(t%ent

($se. A&t)ou') t)e Se(urities $nd E@()$n'e "o%%ission 6SE"7 suspended $nd

eventu$&&8 revo2ed respondents (erti/i($te o/ re'istr$tion on e;ru$r8 *9, *1,










re(ords s)o0 t)$t it instituted t)e $(tion /or ee(t%ent on 3e(e%;er *1,

*<. A((ordin'&8, 0)en t)e ($se 0$s (o%%en(ed, its re'istr$tion 0$s not 8et

revo2ed.4<15 Besides, $s (orre(t&8 )e&d ;8 t)e $ppe&&$te (ourt, t)e SE" &$ter set $side

its e$r&ier orders o/ suspension $nd revo($tion o/ respondents (erti/i($te, renderin't)e issue %oot $nd $($de%i(.4<95

He &i2e0ise $//ir% Ms. B$utist$s ($p$(it8 to sue on ;e)$&/ o/ t)e (o%p$n8 despite

&$(2 o/ proo/ o/ $ut)orit8 to so represent it. A (orpor$tion )$s no po0ers e@(ept

t)ose e@press&8 (on/erred on it ;8 t)e "orpor$tion "ode $nd t)ose t)$t $re i%p&ied

/ro% or $re in(ident$& to its e@isten(e. In turn, $ (orpor$tion e@er(ises s$id po0ers

t)rou') its ;o$rd o/ dire(tors $ndCor its du&8 $ut)oriFed o//i(ers $nd

$'ents. P)8si($& $(ts, &i2e t)e si'nin' o/ do(u%ents, ($n ;e per/or%ed on&8 ;8

n$tur$& persons du&8 $ut)oriFed /or t)e purpose ;8 (orpor$te ;8-&$0s or ;8 $

spe(i/i( $(t o/ t)e ;o$rd o/ dire(tors. 4<=5 T)us, $n8 person suin' on ;e)$&/ o/ t)e

(orpor$tion s)ou&d present proo/ o/ su() $ut)orit8. A&t)ou') Ms. B$utist$ initi$&&8

/$i&ed to s)o0 t)$t s)e )$d t)e ($p$(it8 to si'n t)e veri/i($tion $nd institute t)e

ee(t%ent ($se on ;e)$&/ o/ t)e (o%p$n8, 0)en (on/ronted 0it) su() uestion, s)e

i%%edi$te&8 presented t)e Se(ret$r8s "erti/i($te4<5 (on/ir%in' )er $ut)orit8 to

represent t)e (o%p$n8.

T)ere is $%p&e urispruden(e )o&din' t)$t su;seuent $nd su;st$nti$&

(o%p&i$n(e %$8 ($&& /or t)e re&$@$tion o/ t)e ru&es o/ pro(edure in t)e interest o/

usti(e.4<5 In Novelty Phils., Inc. v. Court of Appeals,4+5 t)e "ourt /$u&ted t)e

$ppe&&$te (ourt /or dis%issin' $ petition so&e&8 on petitioners /$i&ure to ti%e&8

su;%it proo/ o/ $ut)orit8 to sue on ;e)$&/ o/ t)e (orpor$tion. In Pfizer, Inc. v.

Galan,4+*5 0e up)e&d t)e su//i(ien(8 o/ $ petition veri/ied ;8 $n e%p&o8%ent

spe(i$&ist despite t)e tot$& $;sen(e o/ $ ;o$rd reso&ution $ut)oriFin' )er to $(t /or

$nd on ;e)$&/ o/ t)e (orpor$tion. ?$st&8, in China Baning Corporation v.

!on"ragon International Philippines, Inc,4+5 0e re&$@ed t)e ru&es o/ pro(edure

;e($use t)e (orpor$tion r$ti/ied t)e %$n$'ers st$tus $s $n $ut)oriFed si'n$tor8. In

$&& o/ t)e $;ove ($ses, 0e ;rus)ed $side te()ni($&ities in t)e interest o/ usti(e. T)is



















is not to s$8 t)$t 0e disre'$rd t)e reuire%ent o/ prior $ut)orit8 to $(t in t)e n$%e

o/ $ (orpor$tion. T)e re&$@$tion o/ t)e ru&es $pp&ies on&8 to )i')&8 %eritorious

($ses, $nd 0)en t)ere is su;st$nti$& (o%p&i$n(e. H)i&e it is true t)$t ru&es o/

pro(edure $re intended to pro%ote r$t)er t)$n /rustr$te t)e ends o/ usti(e, $nd0)i&e t)e s0i/t un(&o''in' o/ (ourt do(2ets is $ &$ud$;&e o;e(tive, 0e s)ou&d not

insist on stri(t $d)eren(e to t)e ru&es $t t)e e@pense o/ su;st$nti$& usti(e.4+<5 Te()ni($& $nd pro(edur$& ru&es $re intended to )e&p se(ure, not suppress, t)e

($use o/ usti(eK $nd $ devi$tion /ro% t)e ri'id en/or(e%ent o/ t)e ru&es %$8 ;e

$&&o0ed to $tt$in t)$t pri%e o;e(tive, /or, $/ter $&&, t)e dispens$tion o/ usti(e is

t)e (ore re$son /or t)e e@isten(e o/ (ourts.4++5

As to t)e deni$& o/ t)e %otion to in)i;it >usti(e Re8es, 0e /ind t)e s$%e to ;e in

order. #irst, t)e %otion to in)i;it ($%e $/ter t)e $ppe&&$te (ourt rendered t)e

$ss$i&ed de(ision, t)$t is, $/ter >usti(e Re8es )$d $&re$d8 rendered )is opinion on

t)e %erits o/ t)e ($se. It is sett&ed t)$t $ %otion to in)i;it s)$&& ;e denied i/ /i&ed

$/ter $ %e%;er o/ t)e (ourt )$d $&re$d8 'iven $n opinion on t)e %erits o/ t)e ($se,

t)e r$tion$&e ;ein' t)$t $ &iti'$nt ($nnot ;e per%itted to spe(u&$te on t)e $(tion o/

t)e (ourt @ @ @ 6on&8 to7 r$ise $n o;e(tion o/ t)is sort $/ter t)e de(ision )$s ;een

rendered.4+15 $econ", it is sett&ed t)$t %ere suspi(ion t)$t $ ud'e is p$rti$& to one o/ t)e p$rties is not enou')K t)ere s)ou&d ;e eviden(e to su;st$nti$te t)e

suspi(ion. Bi$s $nd preudi(e ($nnot ;e presu%ed, espe(i$&&8 0)en 0ei')ed

$'$inst $ ud'es s$(red p&ed'e under )is o$t) o/ o//i(e to $d%inister usti(e 0it)out

re'$rd /or $n8 person $nd to do ri')t eu$&&8 to t)e poor $nd t)e ri(). T)ere %ust

;e $ s)o0in' o/ ;i$s $nd preudi(e ste%%in' /ro% $n e@tr$udi(i$& sour(e,

resu&tin' in $n opinion on t)e %erits ;$sed on so%et)in' ot)er t)$n 0)$t t)e ud'e

&e$rned /ro% )is p$rti(ip$tion in t)e ($se.

4+95

He 0ou&d &i2e to reiter$te, $t t)is point, t)e po&i(8 o/ t)e "ourt not to to&er$te $(ts o/ &iti'$nts 0)o, /or ust $;out $n8

(on(eiv$;&e re$son, see2 to disu$&i/8 $ ud'e 6or usti(e7 /or t)eir o0n purpose,

under $ p&e$ o/ ;i$s, )osti&it8, preudi(e or preud'%ent. 4+=5













He no0 (o%e to t)e %ore su;st$ntive issue o/ 0)et)er or not t)e petitioners %$8

;e v$&id&8 ee(ted /ro% t)e &e$sed pre%ises.

Un&$0/u& det$iner ($ses $re su%%$r8 in n$ture. In su() ($ses, t)e e&e%ents to ;e

proved $nd reso&ved $re t)e /$(t o/ &e$se $nd t)e e@pir$tion or vio&$tion o/ its

ter%s.4+5Spe(i/i($&&8, t)e essenti$& reuisites o/ un&$0/u& det$iner $re: *7 t)e /$(t o/

&e$se ;8 virtue o/ $ (ontr$(t, e@press or i%p&iedK 7 t)e e@pir$tion or ter%in$tion o/

t)e possessors ri')t to )o&d possessionK <7 0it))o&din' ;8 t)e &essee o/ possession

o/ t)e &$nd or ;ui&din' $/ter t)e e@pir$tion or ter%in$tion o/ t)e ri')t to possessK +7

&etter o/ de%$nd upon &essee to p$8 t)e rent$& or (o%p&8 0it) t)e ter%s o/ t)e &e$se

$nd v$($te t)e pre%isesK $nd 17 t)e /i&in' o/ t)e $(tion 0it)in one 8e$r /ro% t)e

d$te o/ t)e &$st de%$nd re(eived ;8 t)e de/end$nt.4+5

It is undisputed t)$t petitioners $nd respondent entered into t0o sep$r$te (ontr$(ts

o/ &e$se invo&vin' nine 67 roo%s o/ t)e S$n ?uis Bui&din'. Re(ords, &i2e0ise,

s)o0 t)$t respondent repe$ted&8 de%$nded t)$t petitioners v$($te t)e pre%ises, ;ut

t)e &$tter re/used to )eed t)e de%$ndK t)us, t)e8 re%$ined in possession o/ t)e

pre%ises. T)e on&8 (ontentious issue is 0)et)er t)ere 0$s indeed $ vio&$tion o/ t)e

ter%s o/ t)e (ontr$(t: on t)e p$rt o/ petitioners, 0)et)er t)e8 /$i&ed to p$8 t)estipu&$ted rent 0it)out usti/i$;&e ($useK 0)i&e on t)e p$rt o/ respondent, 0)et)er it

prevented petitioners /ro% o((up8in' t)e &e$sed pre%ises e@(ept Roo% <1.

T)is issue invo&ves uestions o/ /$(t, t)e reso&ution o/ 0)i() reuires t)e

ev$&u$tion o/ t)e eviden(e presented. T)e MeT", t)e RT" $nd t)e "A $&& /ound

t)$t petitioners /$i&ed to per/or% t)eir o;&i'$tion to p$8 t)e stipu&$ted rent. It is

sett&ed do(trine t)$t in $ (ivi& ($se, t)e (on(&usions o/ /$(t o/ t)e tri$& (ourt,

espe(i$&&8 0)en $//ir%ed ;8 t)e "ourt o/ Appe$&s, $re /in$& $nd (on(&usive, $nd

($nnot ;e revie0ed on $ppe$& ;8 t)e Supre%e "ourt.415 A&;eit t)e ru&e $d%its o/

e@(eptions, not one o/ t)e% o;t$ins in t)is ($se.41*5











To sett&e t)is issue on(e $nd /or $&&, 0e dee% it proper to $ssess t)e $rr$8 o/ /$(tu$&

/indin's supportin' t)e (ourts (on(&usion.

T)e eviden(e o/ petitioners non-p$8%ent o/ t)e stipu&$ted rent is

over0)e&%in'. Petitioners, )o0ever, (&$i% t)$t su() non-p$8%ent is usti/ied ;8

t)e /o&&o0in': *7 t)e re/us$& o/ respondent to $&&o0 petitioners to use t)e &e$sed

properties, e@(ept roo% <1K 7 respondents re/us$& to turn over Roo%s <9, <= $nd

<K $nd <7 respondents re/us$& to $((ept p$8%ent tendered ;8 petitioners.

Petitioners usti/i($tions $re ;e&ied ;8 t)e eviden(e on re(ord. As (orre(t&8 )e&d ;8

t)e "A, petitioners (o%%uni($tions to respondent prior to t)e /i&in' o/ t)e

(o%p&$int never %entioned t)eir $&&e'ed in$;i&it8 to use t)e roo%s. 415 H)$t t)e8

pointed out in t)eir &etters is t)$t t)e8 did not 2no0 to 0)o% p$8%ent s)ou&d ;e

%$de, 0)et)er to Ms. B$utist$ or to P$()e(o. 41<5 In t)eir >u&8 9 $nd O(to;er <,

*< &etters, petitioners on&8 uestioned t)e %et)od o/ (o%putin' t)eir e&e(tri(

;i&&in's 0it)out, )o0ever, r$isin' $ (o%p&$int $;out t)eir /$i&ure to use t)e roo%s.41+5 A&t)ou') petitioners st$ted in t)eir 3e(e%;er <, *< &etter t)$t respondent

/$i&ed to /u&/i&& its p$rt o/ t)e (ontr$(t,4115 no0)ere did t)e8 spe(i/i($&&8 re/er to t)eir

in$;i&it8 to use t)e &e$sed roo%s. Besides, $t t)$t ti%e, t)e8 0ere $&re$d8 in de/$u&ton t)eir rent$&s /or %ore t)$n $ 8e$r.

I/ it 0ere true t)$t t)e8 0ere $&&o0ed to use on&8 one o/ t)e nine 67 roo%s

su;e(t o/ t)e (ontr$(t o/ &e$se, $nd (onsiderin' t)$t t)e roo%s 0ere intended /or $

;usiness purpose, 0e ($nnot underst$nd 0)8 t)e8 did not spe(i/i($&&8 $ssert t)eir

ri')t. I/ 0e ;e&ieve petitioners (ontention t)$t t)e8 )$d ;een prevented /ro% usin'

t)e roo%s /or %ore t)$n $ 8e$r ;e/ore t)e (o%p&$int /or ee(t%ent 0$s /i&ed, t)e8

s)ou&d )$ve de%$nded spe(i/i( per/or%$n(e /ro% t)e &essor $nd (o%%en(ed $n

$(tion in (ourt. Hit) t)e e@e(ution o/ t)e (ontr$(t, petitioners 0ere $&re$d8 in $

position to e@er(ise t)eir ri')t to t)e use $nd eno8%ent o/ t)e propert8 $((ordin'

to t)e ter%s o/ t)e &e$se (ontr$(t.4195 As ;orne out ;8 t)e re(ords, t)e /$(t is t)$t

respondent turned over to petitioners t)e 2e8s to t)e &e$sed pre%ises $nd













petitioners, in /$(t, renov$ted t)e roo%s. T)us, t)e8 0ere p&$(ed in possession o/

t)e pre%ises $nd t)e8 )$d t)e ri')t to t)e use $nd eno8%ent o/ t)e s$%e. T)e8,

&i2e0ise, )$d t)e ri')t to resist $n8 $(t o/ intrusion into t)eir pe$(e/u& possession o/

t)e propert8, even $s $'$inst t)e &essor itse&/. Yet, t)e8 did not &i/t $ /in'er to prote(t t)eir ri')t i/, indeed, t)ere 0$s $ vio&$tion o/ t)e (ontr$(t ;8 t)e &essor.

H)$t 0$s, inste$d, (&e$r&8 est$;&is)ed ;8 t)e eviden(e 0$s petitioners non-

p$8%ent o/ rent$&s ;e($use ostensi;&8 t)e8 did not 2no0 to 0)o% p$8%ent s)ou&d

;e %$de.#o0ever, t)is did not usti/8 t)eir /$i&ure to p$8, ;e($use i/ su() 0ere t)e

($se, t)e8 0ere not 0it)out $n8 re%ed8. T)e8 s)ou&d )$ve $v$i&ed o/ t)e

provisions o/ t)e "ivi& "ode o/ t)e P)i&ippines on t)e (onsi'n$tion o/ p$8%ent $nd

o/ t)e Ru&es o/ "ourt on interp&e$der.

Arti(&e *19 o/ t)e "ivi& "ode provides:

Arti(&e *19. I/ t)e (reditor to 0)o% tender o/ p$8%ent )$s ;een %$dere/uses 0it)out ust ($use to $((ept it, t)e de;tor s)$&& ;e re&e$sed /ro%responsi;i&it8 ;8 t)e (onsi'n$tion o/ t)e t)in' or su% due.

"onsi'n$tion $&one s)$&& produ(e t)e s$%e e//e(t in t)e /o&&o0in' ($ses: @ @ @ @

6+7 H)en t0o or %ore persons (&$i% t)e s$%e ri')t to (o&&e(tK @ @ @ @.

"onsi'n$tion s)$&& ;e %$de ;8 depositin' t)e t)in's due $t t)e dispos$& o/ $

udi(i$& $ut)orit8, ;e/ore 0)o% t)e tender o/ p$8%ent s)$&& ;e proved in $ proper

($se, $nd t)e $nnoun(e%ent o/ t)e (onsi'n$tion in ot)er ($ses.41=5

In t)e inst$nt ($se, (onsi'n$tion $&one 0ou&d )$ve produ(ed t)e e//e(t o/

p$8%ent o/ t)e rent$&s. T)e r$tion$&e /or (onsi'n$tion is to $void t)e per/or%$n(e

o/ $n o;&i'$tion ;e(o%in' %ore onerous to t)e de;tor ;8 re$son o/ ($uses not

i%put$;&e to )i%.415 Petitioners (&$i% t)$t t)e8 %$de $ 0ritten tender o/ p$8%ent

$nd $(tu$&&8 prep$red vou()ers /or t)eir %ont)&8 rent$&s. But t)$t 0$s insu//i(ient







to (onstitute $ v$&id tender o/ p$8%ent. Even $ssu%in' t)$t it 0$s v$&id tender,

sti&&, it 0ou&d not (onstitute p$8%ent /or 0$nt o/ (onsi'n$tion o/ t)e $%ount. He&&-

sett&ed is t)e ru&e t)$t tender o/ p$8%ent %ust ;e $((o%p$nied ;8 (onsi'n$tion in

order t)$t t)e e//e(ts o/ p$8%ent %$8 ;e produ(ed.415

Moreover, Se(tion *, Ru&e 9 o/ t)e Ru&es o/ "ourt provides:

Se(tion *. %hen interplea"er proper . H)enever (on/&i(tin' (&$i%s upon t)e s$%esu;e(t %$tter $re or %$8 ;e %$de $'$inst $ person 0)o (&$i%s no interest0)$tever in t)e su;e(t %$tter, or $n interest 0)i() in 0)o&e or in p$rt is notdisputed ;8 t)e (&$i%$nts, )e %$8 ;rin' $n $(tion $'$inst t)e (on/&i(tin'(&$i%$nts to (o%pe& t)e% to interp&e$d $nd &iti'$te t)eir sever$& (&$i%s $%on't)e%se&ves.

Ot)er0ise st$ted, $n $(tion /or interp&e$der is proper 0)en t)e &essee does not

2no0 to 0)o% p$8%ent o/ rent$&s s)ou&d ;e %$de due to (on/&i(tin' (&$i%s on t)e

propert8 6or on t)e ri')t to (o&&e(t7.495 T)e re%ed8 is $//orded not to prote(t $

person $'$inst dou;&e &i$;i&it8 ;ut to prote(t )i% $'$inst dou;&e ve@$tion in respe(t

o/ one &i$;i&it8.49*5

Not$;&8, inste$d o/ $v$i&in' o/ t)e $;ove re%edies, petitioners opted tore/r$in /ro% %$2in' p$8%ents.

Neit)er ($n petitioners v$&id&8 invo2e t)e non-de&iver8 o/ Roo%s <9, <= $nd < $s

$ usti/i($tion /or non-p$8%ent o/ rent$&s. A&t)ou') t)e t0o (ontr$(ts e%;r$(ed t)e

&e$se o/ nine 67 roo%s, t)e ter%s o/ t)e (ontr$(ts - 0it) t)eir p$rti(u&$r re/eren(e

to spe(i/i( roo%s $nd t)e %ont)&8 rent$& /or e$() - e$si&8 r$ise t)e in/eren(e t)$t

t)e p$rties intended t)e &e$se o/ e$() roo% sep$r$te /ro% t)$t o/ t)e ot)ers. T)ere

is not)in' in t)e (ontr$(t 0)i() 0ou&d &e$d to t)e (on(&usion t)$t t)e &e$se o/ one

or %ore roo%s 0$s to ;e %$de dependent upon t)e &e$se o/ $&& t)e nine 67

roo%s. A((ordin'&8, t)e use o/ e$() roo% ;8 t)e &essee '$ve rise to t)e

(orrespondin' o;&i'$tion to p$8 t)e %ont)&8 rent$& /or t)e s$%e. Not$;&8,









respondent de%$nded p$8%ent o/ rent$&s on&8 /or t)e roo%s $(tu$&&8 de&ivered to,

$nd used ;8, petitioners.

It %$8 $&so ;e %entioned t)$t t)e (ontr$(t spe(i/i($&&8 provides t)$t t)e &e$se o/

Roo%s <9, <= $nd < 0$s to t$2e e//e(t on&8 0)en t)e ten$nts t)ereo/ 0ou&d v$($te

t)e pre%ises.A;sent $ (&e$r s)o0in' t)$t t)e previous ten$nts )$d v$($ted t)e

pre%ises, respondent )$d no o;&i'$tion to de&iver possession o/ t)e su;e(t roo%s

to petitioners. T)us, petitioners ($nnot use t)e non-de&iver8 o/ Roo%s <9, <= $nd

< $s $n e@(use /or t)eir /$i&ure to p$8 t)e rent$&s due on t)e ot)er roo%s t)e8

o((upied.

In &i')t o/ t)e /ore'oin' disuisition, respondent )$s ever8 ri')t to e@er(ise )is

ri')t to ee(t t)e errin' &essees. T)e p$rties (ontr$(ts o/ &e$se (ont$in identi($&

provisions, to 0it:

In ($se o/ de/$u&t ;8 t)e ?ESSEE in t)e p$8%ent o/ rent$& on t)e /i/t) 61 t)7 d$8 o/ e$() %ont), t)e $%ount o0in' s)$&& $s pen$&t8 ;e$r interest $t t)e r$te o/ OUR per(ent 6+D7 per %ont), to ;e p$id, 0it)out preudi(e to t)e ri')t o/ t)e ?ESSOR to ter%in$te )is (ontr$(t, enter t)e pre%ises, $ndCor ee(t t)e ?ESSEE $s)erein$/ter set /ort)K495

Moreover, Arti(&e *9=<49<5 o/ t)e "ivi& "ode 'ives t)e &essor t)e ri')t to udi(i$&&8

ee(t t)e &essees in ($se o/ non-p$8%ent o/ t)e %ont)&8 rent$&s. A (ontr$(t o/ &e$se

is $ (onsensu$&, ;i&$ter$&, onerous $nd (o%%ut$tive (ontr$(t ;8 0)i() t)e o0ner

te%por$ri&8 'r$nts t)e use o/ )is propert8 to $not)er, 0)o undert$2es to p$8 t)e

rent t)ere/or .49+5or /$i&ure to p$8 t)e rent, petitioners )$ve no ri')t to re%$in in t)e

&e$sed pre%ises.

9HERE"ORE, pre%ises (onsidered, t)e petition is DENIED $nd t)e $tatus

&uo Order d$ted >$nu$r8 *, * is )ere;8 LI"TED. T)e 3e(ision o/ t)e "ourt

o/ Appe$&s d$tedM$8 9, * $nd its Reso&ution d$ted 3e(e%;er *, * in "A-

G.R. SP No. <==< $re A""IR:ED.










SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

HE "ON"UR:

CONSUELO YNARES;SANTIAGO

Asso(i$te >usti(e

")$irperson

LEONARDO A. <UISU:BING :A. ALICIA AUSTRIA;:ARTINE=

Asso(i$te >usti(e Asso(i$te >usti(e

:INITA V. CHICO;NA=ARIO

Asso(i$te >usti(e

REYNATO S. PUNO

")ie/ >usti(e




SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 150283 April 16, 2008

RYUICHI YAMAMOTO,petitioner,

vs.

NISHINO LEATHER INDUSTRIES, INC. and IKUO NISHINO,respondents.

D E C I S I O N

CARPIO MORALES,J.:

In 1983, petitioner, Ryuichi Yamamoto (Yamamoto), a Japanese national,

organized under Philippine laws Wako Enterprises Manila, Incorporated

(WAKO), a corporation engaged principally in leather tanning, now known as

Nishino Leather Industries, Inc. (NLII), one of herein respondents.

In 1987, Yamamoto and the other respondent, Ikuo Nishino (Nishino), also a

Japanese national, forged a Memorandum of Agreement under which they

agreed to enter into a joint venture wherein Nishino would acquire such

number of shares of stock equivalent to 70% of the authorized capital stock of

WAKO.

Eventually, Nishino and his brother1 Yoshinobu Nishino (Yoshinobu) acquired

more than 70% of the authorized capital stock of WAKO, reducing Yamamoto’s

investment therein to, by his claim, 10%,2 less than 10% according to Nishino.3

The corporate name of WAKO was later changed to, as reflected earlier, its

current name NLII.

Negotiations subsequently ensued in light of a planned takeover of NLII by

Nishino who would buy-out the shares of stock of Yamamoto. In the course of

the negotiations, Yoshinobu and Nishino’s counsel Atty. Emmanuel G. Doce

(Atty. Doce) advised Yamamoto by letter dated October 30, 1991, the pertinent

portions of which follow:

http://www.lawphil.net/judjuris/juri2008/apr2008/gr_150283_2008.html#fnt1








Hereunder is a simple memorandum of the subject matters discussed

with me by Mr. Yoshinobu Nishino yesterday, October 29th, based on the

letter of Mr. Ikuo Nishino from Japan, and which I am now transmitting

to you.4

x x x x

12. Machinery and Equipment:

The following machinery/equipment have been contributed by you to the

company:

Splitting

machine

- 1 unit

Samming

machine

- 1 unit

Forklift - 1 unit

Drums - 4 units

Toggling

machine

- 2 units

Regarding the above machines, you may take them out with you (for your

own use and sale) if you want,provided, the value of such machines is

deducted from your and Wako’s capital contributions, which will be paid

to you.

Kindly let me know of your comments on all the above, soonest.

x x x x5 (Emphasis and underscoring supplied)







On the basis of such letter, Yamamoto attempted to recover the machineries

and equipment which were, by Yamamoto’s admission, part of his investment in

the corporation,6 but he was frustrated by respondents, drawing Yamamoto to

file on January 15, 1992 before the Regional Trial Court (RTC) of Makati a

complaint7 against them for replevin.

Branch 45 of the Makati RTC issued a writ of replevin after Yamamoto filed a

bond.8

In their Answer with Counterclaim,9 respondents claimed that the machineries

and equipment subject of replevin form part of Yamamoto’s capital

contributions in consideration of his equity in NLII and should thus be treated

as corporate property; and that the above-said letter of Atty. Doce to Yamamoto

was merely a proposal, "conditioned on [Yamamoto’s] sell-out to . . . Nishino of

his entire equity,"10

which proposal was yet to be authorized by thestockholders and Board of Directors of NLII.

By way of Counterclaim, respondents, alleging that they suffered damage due

to the seizure via the implementation of the writ of replevin over the

machineries and equipment, prayed for the award to them of moral and

exemplary damages, attorney’s fees and litigation expenses, and costs of suit.

The trial court, by Decision of June 9, 1995, decided the case in favor of

Yamamoto,11 disposing thus:

WHEREFORE, judgment is hereby rendered: (1) declaring plaintiff as the

rightful owner and possessor of the machineries in question, and making

the writ of seizure permanent; (2) ordering defendants to pay plaintiff

attorney’s fees and expenses of litigation in the amount of Fifty Thousand

Pesos (P50,000.00), Philippine Currency; (3) dismissing defendants’

counterclaims for lack of merit; and (4) ordering defendants to pay the

costs of suit.

SO ORDERED.12 (Underscoring supplied)

On appeal,13 the Court of Appeals held in favor of herein respondents and

accordinglyreversed the RTC decision and dismissed the complaint.14 In so

holding, the appellate court found that the machineries and equipment claimed

by Yamamoto are corporate property of NLII and may not thus be retrieved

without the authority of the NLII Board of Directors;15 and that petitioner’s

argument that Nishino and Yamamoto cannot hide behind the shield of























corporate fiction does not lie,16 nor does petitioner’s invocation of the doctrine

of promissory estoppel.17 At the same time, the Court of Appeals found no

ground to support respondents’ Counterclaim.18

The Court of Appeals having denied19 his Motion for

Reconsideration,20 Yamamoto filed the present petition,21faulting the Court of

Appeals

A.

x x x IN HOLDING THAT THE VEIL OF CORPORATE FICTION SHOULD

NOT BE PIERCED IN THE CASE AT BAR.

B.

x x x IN HOLDING THAT THE DOCTRINE OF PROMISSORY ESTOPPEL

DOES NOT APPLY TO THE CASE AT BAR.

C.

x x x IN HOLDING THAT RESPONDENTS ARE NOT LIABLE FOR

ATTORNEY’S FEES.22

The resolution of the petition hinges, in the main, on whether the advice in the

letter of Atty. Doce that Yamamoto may retrieve the machineries and

equipment, which admittedly were part of his investment, bound the

corporation. The Court holds in the negative.

Indeed, without a Board Resolution authorizing respondent Nishino to act for

and in behalf of the corporation, he cannot bind the latter. Under the

Corporation Law, unless otherwise provided, corporate powers are exercised by

the Board of Directors.23

Urging this Court to pierce the veil of corporate fiction, Yamamoto argues,viz:

During the negotiations, the issue as to the ownership of the

Machiner[ies] never came up. Neither did the issue on the proper

procedure to be taken to execute the complete take-over of the Company

come up since Ikuo, Yoshinobu, and Yamamoto were the owners thereof,

the presence of other stockholders being only for the purpose of

complying with the minimum requirements of the law.



















What course of action the Company decides to do or not to do depends

not on the "other members of the Board of Directors".It depends on

what Ikuo and Yoshinobu decide. The Company is but a mere

instrumentality of Ikuo [and] Yoshinobu.24

x x x x

x x x The Company hardly holds board meetings. It has an inactive

board, the directors are directors in name only and are there to do the

bidding of the Nish[i]nos, nothing more. Its minutes are paper minutes. x

x x25

x x x x

The fact that the parties started at a 70-30 ratio and Yamamoto’spercentage declined to 10% does not mean the 20% went to others. x x x

The 20% went to no one else but Ikuo himself. x x x Yoshinobu is the

younger brother of Ikuo and has no say at all in the business. Only

Ikuo makes the decisions. There were, therefore, no other members

of the Board who have not given their approval.26(Emphasis and

underscoring supplied)

While the veil of separate corporate personality may be pierced when the

corporation is merely an adjunct, a business conduit, or alter ego of a

person,27 the mere ownership by a single stockholder of even all or nearly all of

the capital stocks of a corporation is not by itself a sufficient ground to

disregard the separate corporate personality.28

The elements determinative of the applicability of the doctrine of piercing the

veil of corporate fiction follow:

"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 thistransaction 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 the plaintiff’s 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 defendant’s relationship to that

operation."29 (Italics in the original; emphasis and underscoring supplied)

In relation to the second element, to disregard the separate juridical

personality of a corporation, the wrongdoing or unjust act in contravention of a

plaintiff’s legal rights must be clearly and convincingly established; it cannot be

presumed.30 Without a demonstration that any of the evils sought to be

prevented by the doctrine is present, it does not apply.31

In the case at bar, there is no showing that Nishino used the separate

personality of NLII to unjustly act or do wrong to Yamamoto in contravention of

his legal rights.

Yamamoto argues, in another vein, that promissory estoppel lies against

respondents, thus:

Under the doctrine of promissory estoppel, x x x estoppel may arise from

the making of a promise, even though without consideration, if it was

intended that the promise should be relied upon and in fact it was reliedupon, and if a refusal to enforce it would be virtually to sanction the

perpetration of fraud or would result in other injustice.

x x x Ikuo and Yoshinobu wanted Yamamoto out of the Company. For this

purpose negotiations were had between the parties. Having expressly

given Yamamoto, through the Letter and through a subsequent meeting

at the Manila Peninsula where Ikuo himself confirmed that Yamamoto

may take out the Machinery from the Company anytime, respondents

should not be allowed to turn around and do the exact opposite of what

they have represented they will do.

In paragraph twelve (12) of the Letter, Yamamoto was expressly advised

that he could take out the Machinery if he wanted to so, provided that

the value of said machines would be deducted from his capital

contribution x x x.









x x x x

Respondents cannot now argue that they did not intend for Yamamoto to

rely upon the Letter. That was the purpose of the Letter to begin with.

Petitioner[s] in fact, relied upon said Letter and such reliance was further

strengthened during their meeting at the Manila Peninsula.

To sanction respondents’ attempt to evade their obligation would be to

sanction the perpetration of fraud and injustice against

petitioner.32 (Underscoring supplied)

It bears noting, however, that the aforementioned paragraph 12 of the letter is

followed by a request for Yamamoto to give his "comments on all the above,

soonest."33

What was thus proffered to Yamamoto was not a promise, but a mere offer,

subject to his acceptance. Without acceptance, a mere offer produces no

obligation.34

Thus, under Article 1181 of the Civil Code, "[i]n conditional obligations, the

acquisition of rights, as well as the extinguishment or loss of those already

acquired, shall depend upon the happening of the event which constitutes the

condition." In the case at bar, there is no showing of compliance with the

condition for allowing Yamamoto to take the machineries and equipment,

namely, his agreement to the deduction of their value from his capitalcontribution due him in the buy-out of his interests in NLII. Yamamoto’s

allegation that he agreed to the condition35 remained just that, no proof thereof

having been presented.

The machineries and equipment, which comprised Yamamoto’s investment in

NLII,36 thus remained part of the capital property of the corporation.37

It is settled that the property of a corporation is not the property of its

stockholders or members.38 Under thetrust fund doctrine, the capital stock,

property, and other assets of a corporation are regarded as equity in trust forthe payment of corporate creditors which are preferred over the stockholders in

the distribution of corporate assets.39 The distribution of corporate assets and

property cannot be made to depend on the whims and caprices of the

stockholders, officers, or directors of the corporation unless the indispensable

conditions and procedures for the protection of corporate creditors are

followed.40





















WHEREFORE, the petition isDENIED.

Costs against petitioner.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

WE CONCUR:




Supreme CourtManila

THIRD DIVISION

VIRGILIO S. DELI:A, G.R. No. *=<1Petitioner,Present:

Yn$res-S$nti$'o, J . 6")$irperson7,

- versus - Austri$-M$rtineF,")i(o-N$F$rio,Re8es, $ndBrion, JJ.

SUSAN :ERCAIDA GOIS,

Respondent. Pro%u&'$ted: >une *=,

@ ---------------------------------------------------------------------------------------- @

DECISION

YNARES;SANTIAGO, J .:

T)is petition /or revie0 under Ru&e +1 o/ t)e Ru&es o/ "ourt $ss$i&s t)e 3e(e%;er

*, 9 3e(ision4*5 o/ t)e "ourt o/ Appe$&s 0)i() $nnu&&ed $nd set $side t)e M$8

<*, 9$nd Au'ust , 9 Reso&utions o/ t)e N$tion$& ?$;or Re&$tions

"o%%ission 6N?R"7 in N?R" "$se No. J-*-9 $nd ordered )erein petitioner to return t)e ($s) ;ond re&e$sed to )i%. A&so $ss$i&ed is t)e e;ru$r8 1,

= Reso&ution45 den8in' t)e Motion /or Re(onsider$tion.

T)e $nte(edent /$(ts $re $s /o&&o0s:

http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/178352.htm#_ftn1








A ($se /or i&&e'$& dis%iss$& 0$s /i&ed ;8 petitioner Jir'i&io S. 3e&i%$ $'$inst

Go&den Union Au$%$rine "orpor$tion 6Go&den7, Prospero Gois $nd )erein

respondent Sus$n Mer($id$ Gois ;e/ore t)e Re'ion$& Ar;itr$tion Br$n() No. JIII

o/ t)e N$tion$& ?$;or Re&$tions "o%%ission on O(to;er , +, do(2eted $s

N?R" RAB JIII "$se No. *-<*-+.

On Apri& , 1, ?$;or Ar;iter P)i&ip B. Mont$(es rendered $ de(ision, t)e

dispositive portion o/ 0)i() re$ds:

H#EREORE, pre%ises (onsidered, ud'%ent is )ere;8 rendered *. indin' i&&e'$&it8 in t)e dis%iss$& o/ (o%p&$in$nt Jir'i&io 3e&i%$

/ro% )is e%p&o8%entK

. Orderin' respondent Go+dn Unon A>a$a#n Co#/o#aon to

p$8 (o%p&$in$nt t)e /o&&o0in': $. B$(20$'es 6>u&8 <, + to Apri& , 1

%os.K P1,<1.1 @ %ont)s7 .... P +,*1+.1 ;. Sep$r$tion P$8 6P1,<1.1 @ + 8e$rs7 *,+.(. S$&$r8 3i//erenti$&s <,9=.d. Servi(e In(entive ?e$ve P$8 ,.Su;-Tot$& P*1,11.1

e. Attorne8s /ee 6*D7 *,11.11T O T A ? P**1,19*.1

<. 3is%issin' $&& ot)er (&$i%s /or &$(2 o/ %erit.

SO OR3ERE3.4<5

Go&den /$i&ed to $ppe$& t)e $/ores$id de(isionK )en(e, it ;e($%e /in$& $nd

e@e(utor8. A 0rit o/ e@e(ution 0$s issued $nd $n IsuFu >eep 0it) p&$te nu%;er PGE-1<* 0$s $tt$()ed.

T)ere$/ter, respondent Gois /i&ed $n A//id$vit o/ T)ird P$rt8 "&$i% (&$i%in' t)$t

t)e $tt$()%ent o/ t)e ve)i(&e 0$s irre'u&$r ;e($use s$id ve)i(&e 0$s re'istered in





)er n$%e $nd not Go&densK $nd t)$t s)e 0$s not $ p$rt8 to t)e i&&e'$& dis%iss$& ($se

/i&ed ;8 3e&i%$ $'$inst Go&den.4+5

In $n Order 415 d$ted 3e(e%;er , 1, t)e ?$;or Ar;iter denied respondents

t)ird-p$rt8 (&$i% on 'rounds t)$t respondent 0$s n$%ed in t)e (o%p&$int $s one o/ t)e respondentsK t)$t su%%ons 0ere served upon )er $nd Prospero GoisK t)$t ;ot)

veri/ied Go&dens Position P$per $nd $&&e'ed t)erein t)$t t)e8 $re t)e respondentsK

$nd t)$t respondent is one o/ t)e in(orpor$torsCo//i(ers o/ t)e (orpor$tion.

Gois /i&ed $n $ppe$& ;e/ore t)e N?R". At t)e s$%e ti%e, s)e /i&ed $ %otion

;e/ore t)e ?$;or Ar;iter to re&e$se t)e %otor ve)i(&e $/ter su;stitutin' t)e s$%e

0it) $ ($s) ;ond in t)e $%ount o/ P**1,19*.1.

On >$nu$r8 *9, 9, $n Order 0$s issued ;8 t)e ?$;or Ar;iter 0)i() st$tes: i&ed ;8 T)ird P$rt8 "&$i%$nt SUSAN M. GOIS is $ Motion to

Re&e$se Motor Je)i(&e $/ter su;stitutin' s$%e 0it) $ ($s) ;ond o/ P**1,19*.1 under O.R. No. <=<9 0)i() $%ount is euiv$&ent to t)e

ud'%ent $0$rd in t)e inst$nt ($se, in t)e %e$nti%e t)$t s)e )$s$ppe$&ed t)e Order den8in' )er T)ird P$rt8 "&$i%.

indin' s$id Motion in order $nd 0it) %erit, S)eri// e&i(isi%o T.

B$si&io is dire(ted to re&e$se /ro% )is (ustod8 t)e IsuFu eep 0it) P&$te

No. PGE-1< $nd return s$%e to SUSAN M. GOIS.SO OR3ERE3.495

Me$n0)i&e, on M$8 <*, 9, t)e N?R" issued $ Reso&ution 4=5 0)i() dis%issed

respondents $ppe$& /or &$(2 o/ %erit. A Motion /or Re(onsider$tion45 0$s /i&ed ;ut

it 0$s denied on Au'ust , 9.45 On Septe%;er *, 9, t)e N?R" Reso&ution

;e($%e /in$& $nd e@e(utor8K su;seuent&8, $n Entr8 o/ >ud'%ent4*5 0$s issued

on Septe%;er , 9.

On O(to;er *<, 9, Gois /i&ed $ petition /or (ertior$ri4**5

;e/ore t)e "ourt o/ Appe$&s $s 0e&& $s $ Supp&e%ent to Petition 4*5 on O(to;er =, 9. Gois $&&e'ed

t)$t t)e N?R" (o%%itted 'r$ve $;use o/ dis(retion 0)en it dis%issed )er

$ppe$&. S)e (&$i%ed t)$t ;8 den8in' )er t)ird-p$rt8 (&$i%, s)e 0$s in e//e(t

(onde%ned to p$8 $ ud'%ent de;t issued $'$inst $ (orpor$tion o/ 0)i() s)e is

neit)er $ president nor $ %$orit8 o0ner ;ut %ere&8 $ sto(2)o&der. S)e /urt)er





















$r'ued t)$t )er person$&it8 is sep$r$te $nd distin(t /ro% t)$t o/ Go&denK t)us, t)e

ud'%ent orderin' t)e (orpor$tion to p$8 t)e petitioner (ou&d not ;e s$tis/ied out o/

)er person$& $ssets.

On 3e(e%;er *, 9, t)e $ppe&&$te (ourt rendered $ 3e(ision in /$vor o/ respondent, 0)i() re$ds in p$rt:

In t)e de(ision d$ted Apri& , 1 rendered ;8 ?$;or Ar;iter Mont$(es, t)e dispositive portion (on/ined itse&/ in dire(tin' Go&denUnion Au$%$rine "orpor$tion on&8, no %ore $nd no &ess, to p$8 priv$terespondent t)e $0$rd st$ted t)erein, ;ut did not %ention t)$t t)e &i$;i&it8is oint $nd so&id$r8 0it) petitioner Sus$n Gois $&t)ou') t)e (o%p&$int/i&ed ;8 t)e priv$te respondent in(&uded petitioner $s $%on' t)e

respondents t)erein. It ;e$rs stress $&so t)$t (orpor$te o//i(ers ($nnot ;e )e&d &i$;&e /or d$%$'es on $((ount o/ t)e e%p&o8ees dis%iss$& ;e($use t)e e%p&o8er (orpor$tion )$s $ person$&it8 sep$r$te $nd distin(t /ro% its o//i(ers 0)o%ere&8 $(ted $s its $'ents. T)e8 $re on&8 so&id$ri&8 &i$;&e 0it) t)e(orpor$tion /or t)e ter%in$tion o/ e%p&o8%ent o/ e%p&o8ees i/ t)e s$%e0$s done 0it) %$&i(e or in ;$d /$it). In t)e ($se $t ;en(), it 0$s not(&e$r&8 s)o0n $nd est$;&is)ed t)$t t)e ter%in$tion o/ priv$te respondent/ro% e%p&o8%ent 0$s t$inted 0it) evident %$&i(e $nd ;$d /$it). As

e&u(id$ted in t)e ($se o/ Re$)s "orpor$tion vs. N?R", t)e %$in do(trineo/ sep$r$te person$&it8 o/ $ (orpor$tion s)ou&d re%$in $s t)e 'uidin' ru&ein deter%inin' (orpor$te &i$;i&it8 to its e%p&o8ees, $nd t)$t, $t t)e ver8&e$st, to usti/8 so&id$r8 &i$;i&it8, t)ere %ust ;e $n $&&e'$tion or s)o0in't)$t t)e o//i(ers o/ t)e (orpor$tion de&i;er$te&8 or %$&i(ious&8 desi'nedto ev$de t)e /in$n(i$& o;&i'$tion o/ t)e (orpor$tion to its e%p&o8ees. urt)er, $s 0ise&8 put ;8 t)e petitioner, 0)i&e it %$8 ;e true t)$t t)esu;e(t ve)i(&e 0$s used ;8 t)e (orpor$tion in tr$nsportin' t)e produ(ts

;ou')t ;8 t)e (orpor$tion /ro% E$stern S$%$r to M$ni&$, it does not

ne(ess$ri&8 /o&&o0 t)$t it is o0ned ;8 t)e (orpor$tion $s in /$(t petitioner 0$s $;&e to du&8 est$;&is) t)$t t)e s$id ve)i(&e is )ers $nd is re'isteredunder )er n$%e. Nor does it i%p&8 t)$t t)e (orpor$tion is /ree to disposeo/ t)e s$%e $nd neit)er does it i%p&8 t)$t t)e s$id ve)i(&e %$8 $nd ($n

;e &evied ;8 respondent N?R" to s$tis/8 $ ud'%ent $'$inst t)e(orpor$tion.



H#EREORE, in vie0 o/ t)e /ore'oin' pre%ises, ud'%ent is)ere;8 rendered ;8 us GRANTING t)e petition /i&ed in t)is ($se,ANNU??ING $nd SETTING ASI3E t)e Reso&utions d$ted M$8 <*,9 $nd Au'ust , 9, respe(tive&8, issued ;8 t)e respondent

N$tion$& ?$;or Re&$tions "o%%ission 6N?R"7, +t) 3ivision in N?R"

"$se No. J-*-9 $nd OR3ERING priv$te respondent to returnto petitioner t)e ($s) ;ond e$r&ier re&e$sed to )i%. SO OR3ERE3.4*<5

Petitioner /i&ed $ Motion /or Re(onsider$tion4*+5 0)i() 0$s denied. #en(e, t)e

present petition r$isin' t)e /o&&o0in' issues:

H#ET#ER OR NOT T#E #ONORAB?E "OURT O

APPEA?S, NINETEENT# 6*t)7 3IJISION, ERRE3:

*. H#EN IT OMMITE3 PRIJATE RESPON3ENT AS ONE O T#EPRIN"IPA? RESPON3ENTS IN T#E ORIGINA?"OMP?AINT AS I??USTRATE3 IN ITS BRIE STATEMENTO A"TSK

. H#EN IT "ONSI3ERE3 T#AT T#E JE#I"?E PRIN"IPA??Y

USE3 IN T#E BUSINESS OPERATIONS O T#E"ORPORATION, H#I"# HAS REGISTERE3 UN3ER T#E

NAME O PRIJATE RESPON3ENT H#O HAS A?SO T#E"ORPORATION PRESI3ENT, "ANNOT BE SUB>E"T OGARNIS#MENTK

<. H#EN IT ANNU??E3 AN3 SET ASI3E A INA? AN3

EE"UTE3 OR3ERCRESO?UTION O T#E NATIONA??ABOR RE?ATIONS "OMMISSION.4*15

A (orpor$tion )$s $ person$&it8 distin(t $nd sep$r$te /ro% its individu$&

sto(2)o&ders or %e%;ers $nd /ro% t)$t o/ its o//i(ers 0)o %$n$'e $nd run its

$//$irs. T)e ru&e is t)$t o;&i'$tions in(urred ;8 t)e (orpor$tion, $(tin' t)rou') itsdire(tors, o//i(ers $nd e%p&o8ees, $re its so&e &i$;i&ities. T)us, propert8 ;e&on'in'

to $ (orpor$tion ($nnot ;e $tt$()ed to s$tis/8 t)e de;t o/ $ sto(2)o&der $nd vi(e

vers$, t)e &$tter )$vin' on&8 $n indire(t interest in t)e $ssets $nd ;usiness o/ t)e

/or%er.4*95











Sin(e t)e 3e(ision o/ t)e ?$;or Ar;iter d$ted Apri& , 1 dire(ted on&8

Go&den to p$8 t)e petitioner t)e su% o/ P**1,19*.1 $nd t)e s$%e 0$s not oint

$nd so&id$r8 o;&i'$tion 0it) Gois, t)en t)e &$tter (ou&d not ;e )e&d person$&&8

&i$;&e sin(e Go&den )$s $ sep$r$te $nd distin(t person$&it8 o/ its o0n. It re%$ins

undisputed t)$t t)e su;e(t ve)i(&e 0$s o0ned ;8 Gois, )en(e it s)ou&d not ;e$tt$()ed to $ns0er /or t)e &i$;i&ities o/ t)e (orpor$tion. Un&ess t)e8 )$ve e@(eeded

t)eir $ut)orit8, (orpor$te o//i(ers $re, $s $ 'ener$& ru&e, not person$&&8 &i$;&e /or

t)eir o//i(i$& $(ts, ;e($use $ (orpor$tion, ;8 &e'$& /i(tion, )$s $ person$&it8 sep$r$te

$nd distin(t /ro% its o//i(ers, sto(2)o&ders $nd %e%;ers. No eviden(e 0$s

presented to s)o0 t)$t t)e ter%in$tion o/ t)e petitioner 0$s done 0it) %$&i(e or in

;$d /$it) /or it to )o&d t)e (orpor$te o//i(ers, su() $s Gois, so&id$ri&8 &i$;&e 0it) t)e

(orpor$tion.

He note t)$t t)e Reso&ution o/ t)e N?R" dis%issin' respondents $ppe$& 0$s

entered in t)e Boo2 o/ Entries o/ >ud'%ent on Septe%;er , 9 $/ter it

$&&e'ed&8 ;e($%e /in$& $nd e@e(utor8 on Septe%;er *, 9.

It 0i&& ;e re($&&ed, )o0ever, t)$t t)e N?R" issued t)e Reso&ution dis%issin'

t)e $ppe$& o/ t)e respondent on M$8 <*, 9. A %otion /or re(onsider$tion 0$s

/i&ed on >u&8 +, 9 ;ut it 0$s denied ;8 t)e N?R" on Au'ust , 9. "op8 o/

t)e deni$& 0$s re(eived ;8 t)e respondent on Septe%;er *, 9.4*=5 T)us,

respondent )$s si@t8 697 d$8s /ro% re(eipt o/ t)e deni$& o/ t)e %otion /or re(onsider$tion or unti& O(to;er <*, 9, 0it)in 0)i() to /i&e t)e petition /or

(ertior$ri under Se(tion + o/ Ru&e 91 o/ t)e Ru&es o/ "ourt. T)us, t)e petition /or

(ertior$ri /i&ed ;8 respondent ;e/ore t)e "ourt o/ Appe$&s on O(to;er *<, 9 0$s

ti%e&8.4*5 "onseuent&8, t)e N?R" erred in de(&$rin' its M$8 <*, 9 Reso&ution

/in$& $nd e@e(utor8.

A de(ision issued ;8 $ (ourt is /in$& $nd e@e(utor8 0)en su() de(ision

disposes o/ t)e su;e(t %$tter in its entiret8 or ter%in$tes $ p$rti(u&$r pro(eedin' or $(tion, &e$vin' not)in' e&se to ;e done ;ut to en/or(e ;8 e@e(ution 0)$t )$s ;een

deter%ined ;8 t)e (ourt, su() $s 0)en $/ter t)e &$pse o/ t)e re'&e%ent$r8 period to

$ppe$&, no $ppe$& )$s ;een per/e(ted.4*5

In t)e inst$nt ($se, it is undisputed t)$t 0)en t)e entr8 o/ ud'%ent 0$s

issued ;8 t)e N?R" on Septe%;er *, 9 $nd entered in t)e Boo2 o/ Entries o/










>ud'%ent onSepte%;er , 9, t)e re'&e%ent$r8 period to /i&e $ petition /or

(ertior$ri )$s not 8et &$psed. In /$(t, 0)en t)e petition /or (ertior$ri 0$s /i&ed

on O(to;er *<, 9, t)e s$%e 0$s sti&& 0it)in t)e re'&e%ent$r8 period. It ;e$rs

stressin' t)$t $ petition /or (ertior$ri under Ru&e 91 %ust ;e /i&ed not &$ter t)$n 9

d$8s /ro% noti(e o/ t)e ud'%ent, order or reso&ution sou')t to ;e $nnu&&ed.45

T)e period or %$nner o/ $ppe$& /ro% t)e N?R" to t)e "ourt o/ Appe$&s is

'overned ;8 Ru&e 91 pursu$nt to t)e ru&in' o/ t)is "ourt in t)e ($se o/ $t. !artin

#uneral 'o(e v. National )abor *elations Co((ission.4*5 Se(tion + o/ Ru&e 91, $s

$%ended, st$tes t)$t t)e petition %$8 ;e /i&ed not &$ter t)$n si@t8 697 d$8s /ro%

noti(e o/ t)e ud'%ent, or reso&ution sou')t to ;e $ss$i&ed.45

"oro&&$ri&8, Se(tion +, Ru&e III o/ t)e Ne0 Ru&es o/ Pro(edure o/ t)e N?R"e@press&8 %$nd$tes t)$t 6/7or t)e purpose6s7 o/ (o%putin' t)e period o/ $ppe$&, t)e

s$%e s)$&& ;e (ounted /ro% re(eipt o/ su() de(isions, $0$rds or orders ;8 t)e

(ounse& o/ re(ord. A&t)ou') t)is ru&e e@p&i(it&8 (onte%p&$tes $n $ppe$& ;e/ore t)e

?$;or Ar;iter $nd t)e N?R", 0e do not see $n8 (o'ent re$son 0)8 t)e s$%e ru&e

s)ou&d not $pp&8 to petitions /or (ertior$ri /i&ed 0it) t)e "ourt o/ Appe$&s /ro%

de(isions o/ t)e N?R".4<5

He note t)$t in t)e dispositive portion o/ its 3e(ision, t)e $ppe&&$te (ourt

ordered petitioner to return to respondent t)e ($s) ;ond e$r&ier re&e$sed to)i%. #o0ever, petitioner $d%itted t)$t t)e %onies 0ere spent to de/r$8 t)e %edi($&

e@penses o/ )is $i&in' %ot)er. "onsiderin' t)$t petitioner is &e'$&&8 entit&ed to

re(eive s$id $%ount, Go&den %ust rei%;urse respondent Gois t)e $%ount o/

P**1,19*.1. To ru&e ot)er0ise 0ou&d resu&t in unust enri()%ent o/ Go&den. T)e

(orpor$tion )$s ;ene/ited /ro% t)e p$8%ent %$de ;8 Gois ;e($use it 0$s re&ieved

/ro% its o;&i'$tion to p$8 to petitioner t)e ud'%ent de;t.

9HERE"ORE, t)e petition is PARTLY GRANTED. T)e $ss$i&ed3e(ision o/ t)e "ourt o/ Appe$&s d$ted 3e(e%;er *, 9 $nnu&&in' $nd settin'

$side t)e M$8 <*, 9 $nd Au'ust , 9 Reso&utions o/ t)e N$tion$& ?$;or

Re&$tions "o%%issionK $nd its Reso&ution d$ted e;ru$r8 1, =

$re A""IR:ED ? :ODI"ICATIONt)$t Go&den Union Au$%$rine

"orpor$tion is ordered to REI:BURSE respondent Sus$n M. Gois t)e $%ount o/

P**1,19*.1.











SO ORDERED.

CONSUELO YNARES;SANTIAGOAsso(i$te >usti(e

9E CONCUR!

:A. ALICIA AUSTRIA;:ARTINE=

Asso(i$te >usti(e

:INITA V. CHICO;NA=ARIO RUBEN T. REYES

Asso(i$te >usti(e Asso(i$te >usti(e

ARTURO D. BRION

Asso(i$te >usti(e

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