Facts:
Hannah Serana, a senior student of the University of the Philippines- Cebu, was appointed by
then President Joseph Estrada to serve a one-year term as student Regent. Serana, along with her
siblings, registered the Office of the Student Regent Foundation, INC. (OSRFI) with a project to
renovate the Vinzons Hall Annex in which President Estrada gave Fifteen Million Pesos as
financial assistance sourced from the Office of the President.
Land Bank check No. 91353 was delivered and encashed by Jade and was misappropriated for
their personal use and benefit.
Her successor, Kristine Clare Bugayong filed a complaint for Malversation of Public Funds and
Property with the Office of the Ombudsman in which the latter found probable cause to indict
Serana and her brother for the crime of Estafa.
Serena argues that the Sandiganbayan does not have jurisdiction (1) over the offense estafa, but
only on crimes enumerated under Section 4 (A) of PD 1606 as amended; (2) over her person, in
her capacity as UP student regent, since she was not a public officer- and assuming that she was
a public officer, it was not in relation to public office.
​
Issues:
1. Does the Sandiganbayan have jurisdiction over the crime of estafa.

2. Does the Sandiganbayan have jurisdiction over Serena, an appointed student regent.

a. Is Serena considered a public official.

b. Was Estafa committed in relation to public office.

RULING:
1. Yes, the Sandiganbayan has jurisdiction over the crime of estafa. Section 4(B) of PD
1606 as amended, expressly provides that the Sandiganbayan has exclusive original
jurisdiction on all cases involving “other offenses” committed by public officials in
relation to their office. The SC held that there is no plausible reason to exclude estafa in
one of those other felonies.
2. Yes, the Sandiganbayan has jurisdiction over Serena. The Supreme Court held that
jurisdiction is simply subject to the twin requirement that (a) the offense is committed by
public officials and employees mentioned in section 4(A) of P.D. No. 1606, as amended ,
and that (b) the offense is committed in relation to their office for the Sandiganbayan to
have exclusive original jurisdiction over her person.

a. Yes, Serena is considered a public official by express enumeration under
Section 4 (A)(1)(g) P.D. No. 1606 as amended. The same law expressly provides
that the Sandiganbayan is vested with jurisdiction over “Presidents, directors, or
trustees, or managers of government-owned or controlled corporations, state
universities or educational institutions or foundations.” The Supreme Court
agreed to the argument of the ombudsman that Serena, a student regent, is a
member of the Board of Regents which exercises the powers and functions similar
to those of a board of trustees of a non-stock corporation and is thus, within the
enumeration stated above.

b. Yes, the crime of estafa was committed in relation to public office. The
Supreme Court held that jurisdiction is determined by the averments in the
information. It is not affected by the pleas or the theories set up by defendant or
respondent in an answer, a motion to dismiss, or a motion to quash.
Here, the information alleged that Petitioner, “while in the performance of her
official functions, committing the offense in relation to her office and taking
advantage of her position, with intent to gain, conspiring with her brother, Jade
IAN D. Serena, a private individual, did then and there willfully, unlawfully, and
feloniously defraud the government X X X.”.

 Doctrine:
 To  constitute  malicious  prosecution,  there  must  be  proof  that  the  prosecutor  was  prompted  by  a  sinister  or  devious  design  to  vex  and  humiliate  a  person,  and  that i t  was i nitiated  deliberately,  knowing  that  the charges are false and groundless.
 One  cannot  be  held l iable  for  damages f or  malicious  prosecution  where  he  acted  with  probable  cause.  We  also  held  that  a  determination  that  there i s  no  probable  cause  cannot  be  made  to  rest  solely  on  the f act  that  the  trial  court  after  trial  decided  to  acquit  the  accused.  Neither  can l ack  of  probable  cause  be  made  to  rest  on  the f act  that  the f inding  of  probable  cause  of  the  Special  Counsel  was  reversed  by  the  Secretary  of  Justice  or  the  Ombudsman  as  the  case  may  be.  The  mere  act  of  submitting  the  case  to  the  authorities  for  prosecution  does  not  make  one l iable f or  malicious  prosecution.  Moreover,  the  adverse  result  of  an  action  does  not  per  se  make  the  action  wrongful  and  subject  the  action  to  damages,  for  the l aw  could  not  have  meant  to i mpose  a  penalty  on  the  right  to l itigate.  If  damages  result  from  a  person’s  exercise of a right, it is damnum absque injuria
 the  Sandiganbayan  ruled i n i ts  decision i n  Criminal  Cases  Nos.  1835-1837  that  Saber  had  the i mplied  authority  as  Executive  Vice-President  to  sell  tickets  on  credit  via  postdated  checks  and  to  allow  Basman  to l oad  his  cargoes i n  the  cargo  section  of  the  M/V  Sweet  Homes;  that  Saber  acted i n  good  faith;  hence,  was  not  criminally l iable  therefor;  that  the  respondent  bank  resorted  to  the  dubious  expedience  of  charging  the  receivables  against  the  account  of
 Saber, i nstead  of  availing i tself  of l egal  remedies f or  their  collection.  However,  it  cannot  thereby  be  concluded  that  the  Board  of  Directors of respondent PAB acted in bad faith or with malice.
 Facts:
●     On  April  8,  1974  then  President  Ferdinand  E.  Marcos  appointed
 Dr.  Mamitua  Saber,  then  Dean  of  Research  at  the  Mindanao  State  University  and  Acting  Director,  National  Science  Museum,  as  Executive Vice-President of the Philippine Amanah Bank (PAB).
●     He w as a lso d esignated  as  the  Officer-in-Charge  of  the  bank  pending the election of its president by the Board of Directors.
●     Executive  Secretary  Alejandro M elchor i nformed C hairman  of  the  PAB  Board  of  Directors D r.  Cesar  A.  Majul, t hat  the  bank  had  been  designated t o m ake  appropriate  preparations  and  arrangements f or  the  annual  pilgrimage o f  Filipino  Muslims  to  Mecca.
●     Considering  that  Saber  had  no e xperience  thereon,  the P AB B oard  of  Directors  designated Sa ludo  as  the h ead  of  the o ne-man  oversight committee to oversee the preparations.
●     Saber  executed  a  Uniform T ime-Charter  on  October 1 5,  1974 u nder w hich t he P AB c hartered  the  M/V  Sweet H omes  to t ransport  the  pilgrims  to  Mecca a nd  back  to t he P hilippines  for P 5,300,000 cash, the amount budgeted by the PAB.
●     Sa ber w rote  then  President  Marcos  requesting  that  other  parties n ot  be  allowed t o c harter a ny  ship  or a ircraft b ringing  pilgrims  to J eddah, t o a void u nfair  competition  with  the P AB. H owever, P resident  Marcos  granted C ongressman  Ali D imaporo a nd s ome  politicians f rom L anao  del  Sur  permission t o c harter  a  plane  to  transport the pilgrims.
●     Saber f ormed a  t hree-man  panel c alled t he " Troika,"  composed o f  Atty. L anang  Ali,  Dialel  Basman a nd I brahim M amao, t o  coordinate t he  arrangements  for t he p ilgrimage. R ather t han  allow  the  vessel  to l eave  for M ecca  with m any  vacant  cabins, Sa ber decided to sell tickets to Basman on credit.
●     Al though t hey b elieved t hat t he a greements  of  Saber  with B asman/AGEAC w ere  against t he p olicies o f t he P AB,  the  Troika/Secretariat h ad t o  implement  the  Memoranda,  and  because of Saber’s insistence, gave the tickets to Basman.
●     T he B oard,  after e xhaustive  deliberations, a pproved  Resolution N o. 6 7,  Series  of  1975,  without a ny o bjection,  declaring  Saber
l iable  for  the  receivables  on  the  ground  that  the  Board  did  not  authorize  him  to  sell  tickets  on  credit  payable  via  postdated  checks, and to execute the Freight Contract with AGEAC.
●     On  May  6,  1975, t he  PAB  Board  of D irectors  approved  Resolution N o. 9 2  confirming  the  recommendation  of  the  management  of t he  bank f or  the  creation  of  an  Investigating  Committee  of  five ( 5)  members,  chaired  by  Aradji, t o  look i nto  the  administrative a nd/or  criminal l iabilities o f t he  persons i nvolved  in t he  Pilgrimage Project.
 ○  During t he  formal i nvestigation,  Saber  testified  and  submitted  documentary  evidence. Ar adji  submitted  his  Report  to  the P AB  Board  of  Directors  that t here  was b asis  for  Saber  to  be  charged  with  violation o f  Republic Ac t  No.  3019,  otherwise k nown  as  the  Anti-Graft  and  Corrupt  Practices  Act,  and  recommended  that t he p roper  criminal  complaint  be  filed  against h im.  The  management  approved t he recommendation of Aradji.
●     Saber f iled  a c ivil  complaint  for  damages.  He  pointed  out  that  Martin Sa ludo,  who  was  appointed b y  the  Board o f D irectors  to  oversee  the  preparation  of  the  pilgrimage, a pproved  the  said  transactions;  hence,  he i s  not  personally l iable  for  the  receivables  of P1,033,700.
●     RTC  ruled  that  the P AB  and  Aradji  were  liable  for d amages.  It  also  ruled  that  the s ales o f t he  tickets t o B asman  on c redit  and  the e xecution o f  the  Freight  Contract  were w ith  the  prior  approval o f M artin Sa ludo,  the h ead o f t he O ne-Man O versight C ommittee,  as well as Nestor Kalaw, who was the PNB Legal Counsel.
●     Court o f  Appeals, w hich  rendered  a  judgment  reversing  the  decision of the trial court.
●     The h eirs  of  Saber  alleged  that  Saber w as d eprived  of h is r ight t o  be  investigated b y t he i mpartial  investigator.  The  petitioners  stress  that  respondent Ar adji,  a  non-lawyer, w as d esignated  to  head t he  Investigating  Committee  to  investigate  the  pilgrimage f iasco. T he p etitioners  also a llege  that  Saber  was  denied d ue  process,  as  he  was  never  furnished  with  a  copy  of  the  Report  of  the Investigating Committee.
●     petitioners  aver  that  the  respondents  are l iable  for  damages  for  malicious  prosecution  because  (a)  Saber  alone  was  charged f or  violation  of  Rep.  Act  No.  3019,  although  there  were  others  who  were i nvolved i n  the  pilgrimage  fiasco;  and  (b)  despite  the  dismissal  of  the  criminal  complaint  by  the  Special  Counsel,  the  respondents,  nevertheless,  pursued  their  appeal i n  the  Tanodbayan  who  found  probable  cause  against  Saber  which  finding  was  barren  of  factual  basis  as  confirmed  by  the  decision  of the Sandiganbayan acquitting him of the charges.

 Issue:  Whether  or  not  the  Board  of  Directors  of  the  PAB  acted i n  bad  faith  or  with  malice i n  designating  the  respondent  Aradji  as  chairman  of  the  committee,  and  that  the l atter  acted i n  bad  faith  or  with  malice i n  accepting  the  position  and i n  not i nhibiting  himself f rom  the  said i nvestigation.

 Held:
●     NO
●     We  agree  with  the  petitioners  that  a  person  other  than  respondent  Aradji  should  have  been  designated  as  Chairperson  of  the Investigating Committee to investigate the pilgrimage fiasco.
 ○  This i s  so  because i n  his  Memorandum  to  the  Board  of  Directors  of  the  PAB  on  February  21,  1975,  respondent  Aradji  had  declared  that  the  1974  Mecca  pilgrimage  under  the  supervision  of  Saber  was  mishandled  and  there  were i ndications  then  that  there  was  an  apparent l ack  of  exercise  of  effective l eadership  which  was  so  vital  and  essential  to  make  the  bank  truly  responsive  to  the  needs  of  the  Filipino  Muslims.
 ○  In  fine,  respondent  Aradji  attributed  the p roblems  attendant  to the pilgrimage fiasco to Saber.
●     But  then  Saber  did  not  oppose  the  designation  by  the  Board  of  Directors  for  respondent  Aradji  to  be  the  Chairman  of  the  Investigating Committee, or even asked for the latter’s inhibition.
●     Besides,  respondent  Aradji w as  only  the  chairman o f  the  committee,  and  there  were  four ( 4)  other  members  who  could r ule in Saber’s favor.
●     Moreover,  the  report  and  recommendations o f  the  committee w ere s till  subject  to  the  review  of t he B oard  of  Directors o f  the  respondent  bank,  which  included t hen  Minister  Cesar  Virata.  Respondent  Aradji, f or  his p art,  could  also  still r ule  for  Saber,  based on the evidence on record.
●     Saber  failed t o  adduce  convincing  evidence  that  Saludo a nd r espondent  Aradji c onspired  to  oust  him  from h is p osition  as  Assistant Vice-President of the respondent bank.
 Additional notes:
●     The  Sandiganbayan  ruled i n i ts  decision i n  Criminal  Cases  Nos.  1835-1837  that  Saber  had  the i mplied  authority  as  Executive  Vice-President  to  sell  tickets  on  credit  via  postdated  checks  and  to  allow  Basman  to l oad  his  cargoes i n  the  cargo  section  of  the  M/V  Sweet  Homes;  that  Saber  acted i n  good f aith;  hence,  was  not  criminally l iable  therefor;  that  the  respondent  bank  resorted  to  the  dubious  expedience  of  charging  the  receivables  against  the  account  of  Saber, i nstead  of  availing i tself  of l egal  remedies  for  their  collection.  However,  it  cannot  thereby  be  concluded  that  the  Board  of  Directors  of  respondent  PAB  acted  in  bad  faith or with malice.
●     The  respondent  PAB  cannot  be f aulted, n or  can i t  be o rdered  to  pay  damages  and a ttorney’s  fees f or i ssuing  a  conditional  clearance to Saber after his resignation from respondent PAB.
●     The  respondent P AB  had  no  discretion t o i ssue  a  clearance  to  Saber.  It  bears  stressing  that  a  public o fficer, i n t he  discharge  of  his  duties,  has  to u se  prudence,  caution a nd  attention i n  the  management  of  his a ffairs.  In  fact,  the r espondent  PAB  was  duty  bound  to  withhold  such  clearance  to  Saber  pending  final  determination of his monetary accountabilities.
●     Even  assuming  that  Saber  and/or  the  petitioners  sustained  economic  difficulties  on  account  of  the  conditional  clearance i ssued  by  the  respondent  PAB,  the  petitioners  are  not  entitled  to  moral  and  exemplary  damages.  The  act  of  the  respondent  PAB  was  not  wrongful.  It i s  xfa  case  of  damnum  absque i njuria  and  not of damnum et injuria. 

FACTS: On October 9, 1958, appellant secured in Civil Case No. 58579 of the Municipal Court of Manila against Insular Farms, Inc. — hereinafter referred to as Insular Farms a judgment for the sum of P1,853.80 — representing the unpaid balance of the price of a pump sold by appellant to Insular Farms — with interest on said sum, plus P125.00 as attorney's fees and P84.00 as costs. 
 
A writ of execution, issued after the judgment had become final, on August 14, 1959, was, returned unsatisfied, stating that Insular Farms had no leviable property. 
 
Soon thereafter, or on November 13, 1959, appellant filed with said court the present action against Pacific Farms, Inc. — hereinafter referred to as appellee — for the collection of the judgment aforementioned, upon the theory that appellee is the alter ego of Insular Farms, which appellee has denied. 
 
In due course, the municipal court rendered judgment dismissing appellant's complaint. The record shows that, on March 21, 1958, appellee purchased 1,000 shares of stock of Insular Farms for P285,126.99; that, thereupon, appellee sold said shares of stock to certain individuals, who forthwith reorganized said corporation; and that the board of directors thereof, as reorganized, then caused its assets, including its leasehold rights over a public land in Bolinao, Pangasinan, to be sold to herein appellee for P10,000.00.
 
MTC/RTC/CA Ruling MTC, RTC, and CA dismissed the complaint. CA ruled that the facts above do not prove that Pacific Farms is an alter ego of Insular Farms. Hence this appeal on certiorari. 
 
Issue/s: Whether Pacific Farms is liable for said unpaid obligation of the Insular Farm. 
 
Ruling:
​NO. 
 
Generally ,where one corporation sells or otherwise transfers all of its assets to another corporation, the latter is not liable for the debts and liabilities of the transferor, except: 

1. where the purchaser expressly or impliedly agrees to assume such debts;
2. where the transaction amounts to a consolidation or merger of the corporations; 
3.  where the purchasing corporation is merely a continuation of the selling corporation; and 

  4. where the transaction is entered into fraudulently in order to escape liability for such debts.
 
There is neither proof nor allegation that appellee had expressly or impliedly agreed to assume the debt of Insular Farms in favor of appellant herein, or that the appellee is a continuation of Insular Farms, or that the sale of either the shares of stock or the assets of Insular Farms to the appellee has been entered into fraudulently, in order to escape liability for the debt of the Insular Farms in favor of appellant herein. These sales took place not only over six (6) months before the rendition of the judgment sought to be collected in the present action, but, also, over a month before the filing of the case in which said judgment was rendered. Moreover, appellee purchased the shares of stock of Insular Farms as the highest bidder at an auction sale held at the instance of a bank to which said shares had been pledged as security for an obligation of Insular Farms in favor of said bank. It has, also, been established that the appellee had paid P285,126.99 for said shares of stock, apart from the sum of P10,000.00 it, likewise, paid for the other assets of Insular Farms. Neither is it claimed that these transactions have resulted in the consolidation or merger of the Insular Farms and appellee herein. 
 
On the contrary, appellant's theory to the effect that appellee is an alter ego of the Insular Farms negates such consolidation or merger, for a corporation cannot be its own alter ego. DECISION APPEALED WAS AFFIRMED.

DOCTRINE
As a general rule, a corporation’s representatives are not bound by the terms of the contract executed by the corporation. They are not personally liable for obligations and liabilities incurred on or in behalf of the corporation. Exception, when the piercing the
veil of corporate fiction is applicable

FACTS:
Petitioners   Nolasco   Fernandez   and   Maricris   Fernandez
were the Chief Executive Officer and Member of the Board of Directors of EOL, respectively.
EOL or Everything Online, Inc is a corporation that offers internet services nationwide through franchisees. Respondent Smart ,on the other hand, is a mobile phone service provider.
Sometime in 2006, EOL sought the services of SMART to provide for the mobile requirements of EOLfor its expansions. Meetings ensued and an agreement was reached which led EOL’s corporate president SalustianoG. Samaco III to sign two (2) corporate service applications and letters of undertaking which states:The President and each one of the directors and officers of the corporation shall be held solidarily liable in their personal capacity with the subscriber for all charges for the use of the   SMART Celfones  acquired  by the   said subscriber.
In September 13, 2006, in order to release and approved the remaining phone line applications, there respondent specified the terms of agreements over the phone lines covered, restated and clarified the agreements between EOL and SMART through a letter of agreement, agreeing on the full responsibility as to the terms and conditions mentioned in the agreement. EOL also executed an Undertaking, that again, provides for a stipulation that the President and directors be held solidarily liable in their personal capacity. The same was signed by Samaco and Petitioner Nolasco.
After the execution of the EOL undertaking, Smart averred that its credit and collection departmentsent by email, phone bills to EOL, yet the same were returned and EOL allegedly refused to receive the bills, stating that it was not liable for the payment of bills of phone lines assigned to franchisees.
Despite repeated demands by the respondent, EOL failed to pay its payables which already amounted to P 39,770,810.87 as of October 31, 2008. This prompted the respondent to file an application for a writ of preliminary attachment before the RTC of Makati Branch 62 for the collection of sum of money against EOL including the petitioners.The RTC dismissed the case and granted petitioners’ motion to dismiss and set aside the writ. On appeal by petition for certiorari under Rule 65, the CA reversed the lower court.

ISSUE: WON Spouse Fernandez are not solidarily liable with EOL?

RULING:
Maricris is not solidarily liable while Nolasco is.
As a general rule, a corporation's representatives are not bound by the terms of the contract executed by the corporation. "They are not personally liable for obligations and liabilities incurred on or in behalf of the corporation. " There are instances, however, when the distinction between personalities of directors, officers, and representatives, and of the corporation, are disregarded. This corporation is being abused or being used for wrongful purposes. The piercing of the corporate veil must be done with caution. To justify the piercing of the veil of corporate fiction, "it must be shown by clear and convincing proof that the separate: and distinct personality of the corporation was purposefully employed to evade a legitimate and binding commitment and perpetuate a
fraud or like wrongdoings."
A corporate director, trustee, or officer is to be held solidarily liable with the corporation in the following instances:1. When directors and trustees or, in appropriate cases, the officers of a corporation:
(a)   vote for or assent to patently unlawful acts of the corporation;
(b)  act in bad faith or with gross negligence in directing the corporate affairs;
(c)   are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons;2.
When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did not file
with the corporate secretary his written objection thereto;
3)          When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation; or
4)          When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action.These instances have not been shown in the case of Maricris. While the Amended Complaint alleged that EOL fraudulently refused to pay the amount due, nothing in the said pleading or its annexes would show the basis of Maricris' alleged fraudulent act that warrants piercing the corporate veil. With regard to Nolasco, as CEO, he signed the EOL Undertaking purportedly binding himself to be held solidarily liable in his personal capacity with the franchisee or assignee for all charges forthe use of SMART cell phone units acquired by Everything Online, Inc. "WHEREFORE, premises considered, the petition is PARTLY GRANTED.

DOCTRINE:
Though a subsidiary company's separate corporate personality may be disregarded when the evidence shows that such separate personality was being used by its parent or holding corporation to perpetrate a fraud or evade an existing obligation,85 none of these circumstances were alleged or proved by Spouses Galang. They simply claimed that HSBC-SRP and HSBC acted in bad faith when they foreclosed the mortgaged property though they (Spouses Galang) were up to date in their payments. More, the insistence of Spouses Galang that HSBC was privy to the Mortgage Agreement for its interests are so intertwined with those of HSBC- SRP that they have become identical ï¿½ constitutes a collateral attack on the corporate personality of HSBC-SRP which is prohibited by the Corporation Code of the Philippines.86 Such an inquiry into the legal personality of a corporation may only be made by the Solicitor General in a Quo Warranto proceeding.

FACTS
●     R espondent Ma. Theresa Ofelia G. Galang was a regular employee of petitioner Hongkong and Shanghai Banking Corporation, Ltd. (HSBC), a foreign banking institution duly licensed to do business in the Philippines. HSBC offered benefit plans for its employees, including housing loans, administered and managed by Hongkong and Shanghai
Banking Corporation, Ltd. Staff Retirement Plan (HSBC-SRP)
●     Ma. Theresa applied for a housing loan which HSBC-SRP approved.
●     The monthly amortizations were then paid through deductions from Ma. Theresa's payroll account. The loan was secured by a mortgage on their property in Mandaluyong in favor of HSBC-SRP
●     In January 1993, a labor dispute broke out between HSBC and Hongkong and Shanghai Baking Corporation Employees Union (HSBC-EU), the union of rank-and-file employees of which Ma. Theresa was a member.
●     HSBC was prompted to dismiss almost 90% of its rank and file employees including Ma. Theresa
●     Since she was dropped from the payroll, she was unable to pay the monthly loan amortizations.
●     HSBC-SRP sent Spouses Galang a formal demand for full payment of the loan. Spouses Galang, however, paid only their arrears and resumed remitting their monthly amortizations in December 1994 when they were able to raise enough money. They had since religiously paid their monthly amortizations until October 1996
●     Despite the foregoing, HSBC-SRP sent Sps Galang Installment Overdue Reminders reminding them of the outstanding balance. Then, HSBC- SRP extrajudicially foreclosed the mortgage which covered the outstanding balance. Petitioner Manuel Estacion, Vice President of HSBC and former trustee of HSBC-SRP emerged as the highest bidder.
●     Accordingly, Sps Galang sued HSBC and HSBC-SRP       for
Annulment of Sale with Damages and Preliminary Injunction.
●     In its answer, HSBC-SRP asserted that the complaint stated no cause of action.
➢ For based on the HSBC Retirement Plan Rules and Regulations, upon termination of Ma. Theresa's employment with HSBC, her loan balance automatically became due and demandable. Since she failed to settle this amount in full upon demand, foreclosure of her mortgage logically followed.
●     As for HSBC, it also sought to dismiss the case on the ground that it was not a privy to the real estate mortgage contract between Spouses Galang and HSBC-SRP, a different and separate entity from HSBC itself. In any event, its relationship with Ma. Theresa was purely one of employer-employee - no other.
●     Court of Appeals: the Court of Appeals seemingly applied a variation of the doctrine of piercing the veil of corporate fiction, thus: when two business enterprises are owned, conducted and controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties, disregard the legal fiction that two corporations are distinct entities and treat them as identical or one and the same.

• HSBC created HSBC-SRP tasked with administering retirement, pension, and other plans for the benefit of its employees;
• When the loan agreement and the real estate mortgage were executed in 1990,

HSBC-SRP was still directly attached to HSBC as the former was only
incorporated in 1998;

ISSUE:
WON piercing the veil of corporate fiction is applicable in this case.
WON HSBC should be a party in the complaint of SPS Galang because HSBC is a privy to the mortgage contract between HSBC-SRP and SPS Galang.

RULING:
NO. The doctrine of piercing the veil of corporate fiction is not applicable in this case.
The Court ruled that HSBC-SRP and HSBC are separate entities
Though a subsidiary company's separate corporate personality may be disregarded when the evidence shows that such separate personality was being used by its parent or holding corporation to perpetrate a fraud or evade an existing obligation,85 none of these circumstances were alleged or proved by Spouses Galang.
They simply claimed that HSBC-SRP and HSBC acted in bad faith when they foreclosed the mortgaged property though they
(Spouses Galang) were up to date in their payments.
More, the insistence of Spouses Galang that HSBC was privy to the Mortgage Agreement for its interests are so intertwined with those of HSBC- SRP that they have become identical — constitutes a collateral attack on the corporate personality of HSBC-SRP which is prohibited by the Corporation Code of the
Philippines.
➢ Such an inquiry into the legal personality of a corporation may only be made by the Solicitor General in a Quo
Warranto proceeding.
HSBC correctly argues that it had no participation in the foreclosure proceedings. The parties even stipulated during the pre-trial that HSBC was not a signatory to any contract between Spouses Galang and HSBC-SRP. Its role was limited to determining who among its employees were eligible to apply for housing loans, processing and approval of which were left to the discretion of HSBC-SRP.
Considering, too, that Spouses Galang are not entitled to damages, there is simply no reason to pierce the corporate veil as they would have nothing to collect or regain from HSBC. Otherwise stated, Spouses Galang do not have a cause of action against HSBC.

Doctrine:
The trust fund doctrine or theory has been, perhaps, most often applied to the case where a creditor of an insolvent corporation seeks to compel a stockholder to pay a balance claimed to be due on stock for which the par value has never been paid to the corporation. As long as a corporation remains solvent the subscriber's only liability runs to the corporation.
It is established doctrine that subscriptions to the capital of a corporation constitute a fund to which creditors have a right to look for satisfaction of their claims and that the assignee in insolvency can maintain an action upon any unpaid stock subscription in order to realize assets for the payment of its debts.
A corporate creditor cannot immediately invoke the trust fund doctrine to proceed against unpaid subscriptions of stockholders of the debtor corporation without alleging and proving the corporation's insolvency or any of the other acceptable grounds where the trust fund doctrine, theory or principle has been applied. The observation that a corporation has the beneficial or equitable as well as the legal title of its capital stock and is in business to make money for itself and its stockholders and not for its creditors is well taken. As well, the capital stock of a corporation is a trust to be managed during its corporate life for the benefit of stockholders. It is only in the event of its dissolution or insolvency, does the capital stock become a trust fund for the benefit of its creditors
Facts:
●     On   February  3,    1999,      plaintiff-appellee     Subic      Bay
Metropolitan Authority (SBMA for brevity) entered into a
Lease Agreement with defendant/third-party plaintiff Centennial Air, Inc. (CAIR for brevity), represented by defendant Roberto Lozada (Lozada for brevity), for the lease of Building 8324
●     For the duration of the lease, CAIR became delinquent and was constantly remiss in the payment of its obligations.
Despite repeated demands, CAIR still failed to comply.
●     SBMA was compelled to file a Complaint against the former and its stockholders asking for the payment of its outstanding obligation in the total amount of
US$163,341.89.
●     Enano-Bote, et al. filed their Answer denying any liability to SBMA. They argued that they were no longer stockholders of the corporation at the time the Lease Agreement was executed between [CAIR] and SBMA on February 3, 1999.
○ Allegedly, on December 1, 1998, they entered into a Deed of Assignment of Subscription Rights with third-party defendant-appellee Jose Ch. Alvarez, whereby they assigned, transferred, and conveyed their aggregate subscription of [400,000] shares, representing [100%] of the outstanding capital stock of CAIR, in favor of Alvarez.
○ Since they ceased to be stockholders of the corporation, they were no longer parties to the Lease Agreement, thus they cannot be held liable for any breach thereof.
●     the CA affirmed the RTC's invocation of Halley v. Printwell,
Inc. to justify the application of the trust fund doctrine
○ the RTC is convinced that petitioners may be held liable up to the extent of their unpaid subscription for the payment of CAIR's outstanding obligation to SBMA.

Issue: Whether or not the trust fund doctrine is applicable in the case at bar.

Held:
●     NO
●     Halley v. Printwell recognized two instances when the creditor is allowed to maintain an action upon any unpaid subscriptions based on the trust fund doctrine: (1) where the debtor corporation released the subscriber to its capital stock from the obligation of paying for their shares, in whole or in part, without a valuable consideration, or fraudulently, to the prejudice of creditors; and (2) where the debtor corporation is insolvent or has been dissolved without providing for the payment of its creditors.
○ It is the second instance which SBMA, as creditor, may invoke to collect from CAIR's stockholders for their unpaid subscriptions and apply the same to CAIR's unpaid rentals. But, as stressed in Halley: "To make out a prima facie case in a suit against stockholders of an insolvent corporation to compel them to contribute to the payment of its debts by making good unpaid balances upon their subscriptions, it is only necessary to establish that the stockholders have not in good faith paid the par value of the stocks of the corporation."
●     SBMA has not even pleaded either insolvency of CAIR or its dissolution. What is evident in SBMA's complaint is that it is a simple collection suit.
●     SBMA failed to either allege or prove any of the two grounds recognized in Halley when the trust fund doctrine may be applied to compel the stockholders to contribute to the payment of CAIR's debts by compelling them to pay the unpaid balances upon their subscriptions.
●     With the Court's finding that the CA erred in applying the trust fund doctrine to make the stockholders liable to SBMA for their unpaid subscriptions to the extent of CAIR unpaid obligations to SBMA, and without any evidence to controvert the total amount of US$163,341.89, plus legal interest, adjudged by the lower courts in favor of SBMA, only CAIR should be solely liable therefor.

Doctrine:
To hold a director or officer personally liable for corporate obligations, two requisites must concur:
(1)      complainant must allege in the complaint that the director or officer assented to patently unlawful acts of the corporation, or that the officer was guilty of gross negligence or bad faith; and
(2)      complainant must clearly and convincingly prove such
unlawful acts, negligence or bad faith
To hold a director or officer personally liable for debts of the corporation, and thus pierce the veil of corporate fiction, the bad faith or wrongdoing of the director or officer must be established clearly and convincingly.
​
Facts:
●     On December 1, 1999 Tyreplus, through its President
Edgardo Lim, entered into a Commercial Distributorship Agreement with Total.
●     On December 31, 1999, Tyreplus' General Manager Brigido Tan resigned, prompting Lim to take over the company operations. Lim discovered that Tan used the name of
Tyreplus to pursue Tan's personal interest.
●     Thus, in order to remove the bad image Tan had created,
Tyreplus had purportedly changed its name to Superpro
Industrial Sales Corporation.
●     using the letterhead "Superpro Ind. Sales Corp." Lim wrote Total that "Superpro Industrial Sales Corporation" will be the new trade name of Tyreplus Sales Corporation
●     on March 9, 2000, Total served on Tyreplus a notice of pre-termination of Distributorship Agreement
○ Tyreplus committed a contractual breach when it assigned its distributorship rights and obligations to Superpro, a separate and distinct corporation, without Total's knowledge and consent.
●     Total further asserts that Lim should also be held personally liable for transacting in bad faith by misleading it into believing that Tyreplus got dissolved and changed its name to Superpro.

Issue: Whether Lim should be held personally liable for Tyreplus' obligations in his capacity as its President.

Held:
●     YES
●     To hold a director or officer personally liable for debts of the corporation, and thus pierce the veil of corporate fiction, the bad faith or wrongdoing of the director or officer must be established clearly and convincingly.
●     Here, Lim had been the frontrunner in the transactions between Total and Tyreplus, and subsequently, Total with Superpro. Lim categorically identified himself as the President of Tyreplus and Superpro. Lim admitted and declared his active participation in the management and operation of Tyreplus and Superpro, as the President of both companies.
●     Lim as the President of Tyreplus is the controlling mind of this company, as Tyreplus had no mind of its own.
●     Days after the contract with Superpro was executed, Lim started changing this tone, this time, he claimed that Superpro had actually emerged as a new entity. Not only that. For no valid reason, Lim, on behalf of Tyreplus, ordered
a stop-payment on the checks he issued as payment for the obligations of Tyreplus to Total. And after Total demanded payment of the obligations of Tyreplus, Lim, on behalf of
Tyreplus, instituted the case for damages against Total.
●     Lim dealt in bad faith when he knowingly misled Total into executing the new Agreement with Superpro. Lim falsely declared to Total that Tyreplus' name was merely changed to Superpro, albeit he subsequently asserted that in fact the companies are two (2) distinct and separate. Lim's misuse of Tyreplus as a corporation to perpetuate breach of contractual obligations renders Lim personally liable.
Lim, therefore, should be made liable jointly and severally liable with Tyreplus in the payment of the latter's obligations due to Total.

DOCTRINE:
A subsidiary company's separate corporate personality may be disregarded only when the evidence shows that such separate personality was being used by its parent or holding corporation to perpetrate a fraud or evade an existing obligation. Concomitantly, employees of a corporation have no cause of action for labor-related claims against another unaffiliated corporation, which does not exercise control over them.
FACT:
On October 2, 1992, the National Government thru the Asset Privatization Trust (APT) executed a Purchase and Sale Agreement (PSA) with G Holdings, a domestic corporation primarily engaged in the business of owning and holding shares of stock of different companies. G Holding bought 90% of Maricalum Mining's shares and financial claims in the form of company notes. In exchange, the PSA obliged G Holdings to pay APT the amount of P673,161,280.00, with a down payment of P98,704,000.00 and with the balance divided into four tranches payable in installment over a period of ten years.7 Concomitantly, G Holdings also assumed Maricalum Mining's liabilities in the form of company notes. The said financial liabilities were converted into three (3) Promissory Notes (PNs) totaling P550,000,000.00 (P114,715,360.00, P186,550,560.00 and P248,734,080.00), which were secured by mortgages over some of Maricalum Mining's properties. These PNs obliged Maricalum Mining to pay G
Holdings the stipulated amount of P550,000,000.00
Upon the signing of the PSA and paying the stipulated down payment, G Holdings immediately took physical possession of Maricalum Mining's Sipalay Mining Complex, as well as its facilities, and took full control of the latter's management and operations. On January 26, 1999, the Sipalay General Hospital, Inc. (Sipalay Hospital) was duly incorporated to provide medical services and facilities to the general public. Afterwards, some of Maricalum Mining's employees retired and formed several manpower cooperatives In 2000, each of the said cooperatives executed identical sets of Memorandum of Agreement with Maricalum Mining wherein they undertook, among others, to provide the latter with a steady supply of workers, machinery and equipment for a monthly fee. On June 1, 2001, Maricalum Mining's Vice President and Resident Manager Jesus H. Bermejo wrote a Memorandum to the cooperatives informing them that Maricalum Mining has decided to stop its mining and milling operations effective July 1, 2001 in order to avert continuing losses brought about by the low metal prices and high cost of production. In July 2001, the properties of Maricalum Mining, which had been mortgaged to secure the PNs, were extrajudicially foreclosed and eventually sold to G Holdings as the highest bidder on December 3, 2001. On September 23, 2010, some of
Maricalum Mining's workers, including complainants, and some of Sipalay General Hospital's employees jointly filed a Complaint15 with the LA against G Holdings, its president, and officer-in-charge, and the cooperatives and its officers for illegal dismissal, underpayment and nonpayment of salaries, underpayment of overtime pay, underpayment of premium pay for holiday, nonpayment of separation pay, underpayment of holiday pay, nonpayment of service incentive leave pay, nonpayment of vacation and sick leave, nonpayment of 13th month pay, moral and exemplary damages, and attorneys fees. On December 2, 2010, complainants and CeMPC Chairman Alejandro H. Sitchon surprisingly filed his complaint for illegal dismissal and corresponding monetary claims with the LA against G Holdings, its officer--in-charge and CeMPC. Thereafter, the complaints were consolidated by the LA. After the hearings were concluded, complainants presented their Position Paper claiming that: they have not received any increase in wages since they were allegedly rehired; except for Sipalay Hospital's employees, they worked as an augmentation force to the security guards charged with securing Maricalum Mining's assets which were acquired by G Holdings; Maricalum Mining's assets have been exposed to pilferage by some of its rank-and-file employees whose claims for collective bargaining benefits were undergoing litigation; the Sipalay Hospital is purportedly "among the assets" of Maricalum Mining acquired by G Holdings; the payrolls for their wages were supposedly prepared by G Holdings' accounting department; since the second half of April 2007, they have not been paid their salary; and some of their services were dismissed without any due process
Based on these factual claims, complainants posited that: the manpower cooperatives were mere alter egos of G Holdings organized to subvert the "tenurial rights" of the complainants; G Holdings implemented a retrenchment scheme to dismiss the caretakers it hired before the foreclosure of Maricalum Mining's assets; and G Holdings was their employer because it allegedly had the power to hire, pay wages, control working methods and dismiss them. LA ruled in favor of complainants. It held that G Holdings is guilty of labor-only contracting with the manpower cooperatives thereby making all of them solidarily and directly liable to complainants. NLRC modified and ruled that it was Maricalum Mining-not G Holdings-who entered into service contracts by way of a Memorandum of Agreement with each of the manpower cooperatives. CA affirmed.

ISSUE: Whether G Holdings is liable (NO)

HELD
The doctrine of piercing the corporate veil applies only in three (3) basic areas, namely: (a) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; (b) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a crime; or (c) alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation. This principle is basically applied only to determine established liability. However, piercing of the veil of corporate fiction is frowned upon and must be done with caution. This is because a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. A parent or holding company is a corporation which owns or is organized to own a substantial portion of another company's voting shares of stock enough to control or influence the latter's management, policies or affairs thru election of the latter's board of directors or otherwise. However, the term "holding company" is customarily used interchangeably with the term "investment company" which, in turn, is defined by Section 4 (a) of Republic Act (R.A.) No. 262961 as "any issuer (corporation) which is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities." In other words, a "holding company" is organized and is basically conducting its business by investing substantially in the equity securities of another company for the purposes of controlling their policies (as opposed to directly engaging in operating activities) and "holding" them in a conglomerate or umbrella structure along with other subsidiaries. Significantly, the holding company itself-being a separate entity-does not own the assets of and does not answer for the liabilities of the subsidiary or affiliate. The management of the subsidiary or affiliate still rests in the hands of its own board of directors and corporate officers. It is in keeping with the basic rule a corporation is a juridical entity which is vested with a legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it. The corporate form was created to allow shareholders to invest without incurring personal liability for the acts of the corporation. While the veil of corporate fiction may be pierced under certain instances, mere ownership of a subsidiary does not justify the imposition of liability on the parent company. It must further appear that to recognize a parent and a subsidiary as separate entities would aid in the consummation of a wrong. Thus, a holding corporation has a separate corporate existence and is to be treated as a separate entity; unless the facts show that such separate corporate existence is a mere sham, or has
been used as an instrument for concealing the truth.69 Corporation by estoppel

The existence of the corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally caused the corporation to commit a crime. A corporate officer cannot protect himself behind a corporation where he is the actual, present and efficient actor.


Facts:

That on or about the period 06 May 2006 to 21 July 2006, in the City of Manila, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating with each other, with intent to defraud the government, did then and there knowingly, willfully, unlawfully, and feloniously import, misdeclare, misclassify and undervalue shipment said to contain 2,406 bundles of round steel bars, valued at Eighty Nine Million Seven Hundred Thirty Seven Thousand One Hundred Twenty Seven Pesos (PhP89,737,127.00) but actually found as reinforced/deformed steel bars, through the use of falsified/spurious shipping documents to evade payment of correct and appropriate duties and taxes due thereon in the aggregate amount of Fifteen Million Eight Hundred Seventy Thousand Four Hundred Thirty Eight Pesos (PhP15,870,438.00) to the damage and prejudice of the government.

Issue:
Whether or not the Officer of the corporation is not criminally held liable.

Held:
A corporation possesses a personality separate and distinct from the person of its officers, directors and stockholders. Petitioners, being corporate officers and/or directors, through whose act, default or omission the corporation commits a crime, may themselves be individually held answerable for the crime. As We declared in Securities and Exchange Commission v. Price Richardson Corporation, to be held criminally liable for the acts of a corporation, there must be a showing that its officers, directors, and shareholders actively participated in or had the power to prevent the wrongful act.
This Court upholds the consistent findings of both CTA First Division and En Banc that there is a clear showing of: (1) undeniable commission of the crime; (2) the pecuniary advantage the corporation would gain had the falsified documents been taken at face value; and (3) lack of repudiation by the responsible officers of the unlawful acts already committed, or at the very least, a showing of the effort undertaken to make sure that the documents sent by the foreign shipper to be appended to the IEIRD matched their order, despite the fact that they undoubtedly knew of the importation of steel from China.

 Doctrine:
 While  a  corporate  director,  trustee,  or  officer  who  entered i nto  contracts i n  behalf  of  the  corporation  generally  cannot  be  held  personally l iable  for  the l iabilities  of  the l atter, i n  deference  to  the  separate  and  distinct l egal  personality  of  a  corporation.  their  personal l iability  may  validly  attach  when  they  are  specifically  made  by  a  particular provision of law, as in this case.
 Section  10  of  RA  8042,  as  amended,  expressly  provides f or j oint  and  solidary l iability  of  corporate  directors  and  officers  with  the  recruitment/placement  agency  for  all  money  claims  or  damages  that may be awarded to Overseas Filipino Workers.

 Facts:
●     On  November  24,  2014,  UPLI  hired  respondent  as  Assistant
 Stage  Manager  for  and  on  behalf  of i ts  foreign  principal,  Holland  America  Line  Westours,  Inc.  (Holland),  under  a f our-month  contract  on  board  the  vessel  "Westerdam."  His  task  was  to  assist  the  Manager,  supervise,  and  organize  the  stage  before,  during,  and after every show in the vessel.
●     While  on  board  the  vessel  on M arch  20,  2015,  respondent  started  to  feel  back  pains a fter h e m oved  several  boxes  to  be u sed f or  the  show.  Later  on,  he  began  experiencing l ower  back p ains  with  right l eg  numbness,  described  as s harp a nd  severe  when  aggravated by movement.
 the  company-designated  physician advised  respondent to  undergo s urgical p rocedure,  transforaminal  interlumbar f usion  (TILF)
●     respondent  refused  to  undergo  the  surgical  procedure  and  chose  to have treatment and PT sessions.
●     The  companydesignated  physician f inally d eclared  him  partially  and  permanently  disabled  with  Grade  8 i mpediment-moderate  rigidity or 2/3 loss of motion or lifting power of the trunk.
●     respondent  filed  a  complaint  for  payment o f  total a nd  permanent  disability benefits with the NCMB-PVA.
●     Ruling  of  NCMB-PVA: f ound  respondent e ntitled  to  permanent  total d isability  benefits  under t he  HAL  AMOSUP C BA.  It  held  UPLI,  Holland,  and  Consunji  jointly  and  severally l iable  in t he  amount o f U S$72,000.00.
●     C A: a greed  with  the  ruling  of  NCMB-PVA  but i t  held t hat  there i s n o  legal  basis t o h old  Consunji  solidarity  liable t o r espondent  as i t  did n ot  act i n b ad f aith i n  denying  respondent's  claim f or t otal  and permanent disability benefits.

 Issue:  Whether  Consunji,  the  owner  and  President  of  UPLI, i s  solidarily liable with UPLI.

 Held:
●     YES
●     Section  10  of  RA  8042  ("Migrant  Workers  and  Overseas  Filipinos  Act  of  1995”),  as  amended,  expressly  provides  for j oint  and  solidary l iability  of  corporate  directors  and  officers  with  the  recruitment/placement  agency  for  all  money  claims  or  damages  that may be awarded to Overseas Filipino Workers.
●     While  a  corporate  director,  trustee,  or  officer  who  entered i nto c ontracts i n  behalf  of  the  corporation  generally c annot  be h eld  personally l iable  for t he l iabilities  of  the  latter, i n  deference  to  the s eparate  and  distinct l egal  personality  of  a  corporation,  their  personal  liability  may  validly a ttach  when t hey  are  specifically  made by a particular provision of law, as in this case.
 Indubitably,  Consunji,  as  the  owner and  President  of  UPLI, i s  solidarily l iable  with  the l atter i n  the  amount  of  US$20,154.00  representing  respondent's  partial  and  permanent  disability  benefits. 

Facts:
●     Petitioner  Linden  Suites  Inc.  discovered  that  the  concrete  retaining  wall  of  the  adjacent  building,  One  Magnificent  Mile  (OMM),  owned  by  respondent  Meridien  Far  East  Properties,  Inc., had encroached on its property line.
●     Respondent’s  workers  were  unable  to  finish i t  and  a  substantial  part  still  needed  to  be  removed.  Petitioner  completed  the  demolition,  and  demanded  payment  of  the  cost of the additional works to the respondent.
●     Respondent  refused  to  pay,  which l ed  to  the  filing  of  the  complaint
●     RTC  adjudged  respondent l iable  the  cost  of  the  demolition.  CA affirmed the ruling of the RTC.
●     Thereafter,  petitioner  filed  a  motion  for i ssuance  of  a  writ  of  execution before the RTC.
●     On  April  5  and  14,  2010,  Sheriff  Boco  attempted  to  serve  the  writ  on  respondent i n i ts  office  address i n  Makati  City  but  failed.  Petitioner  then  advised  the  sheriff  to  serve  the  writ  to  respondent  at  2/F,  Soho  Central  Condominium l ocated i n  Mandaluyong City.
●     Sheriff  Boco  proceeded  to  the  said  condominium  to  serve  the  writ.  However,  Atty.  Baculi,  Legal  Officer  of  Meridien  East  Realty  and  Development  Corp.  (MERDC), i nformed  him  that i t  was  Meridien  Development  Group,  Inc.  (MDGI),  not  respondent, which owned the office in the said address.
●     Sheriff  Boco  returned  the  writ  unserved  as  per  Sheriffs  Return
●     Petitioner  observed  that  the  2006  GIS  of  respondent  and  2009  GIS  of  MERDC  stated  the  same  officers,  and  the  officers l ikewise  shareholders  of  both  corporations  and  had  similar residential addresses.
●     Petitioner  filed  an  Urgent  Motion  to  Examine  Judgment  Obligor
●     Respondent  claimed  that  their  examination i s  a  violation  of  the  doctrine  of  separate  corporate  personality.  Respondent  further  asserted  that  the  officers  cannot  be  required  to  appear  before  the  RTC  Pasig  City  as  they  reside i n  Makati  City, where respondent’s office sits.

 Issue:
 Whether  or  not  the  doctrine  of  separate j uridical  personality i s applicable in the case at bench.  (NO)

 Ruling:
●     The  well-settled  doctrine  of  separate j uridical  personality i s  inapplicable in this case.
●     Petitioner  wanted  the  officers  to  be  examined  not  for  the  purpose  unto  them  the l iability  of  respondent  as i ts j udgment obligor.
●     It  never  averred i n  the  motion  any i ntention  to  make  the  officers l iable  for  respondeznt’s  obligation  due  to  the l atter’s  purported  attempts  to  evade  the  execution  of  the  final j udgment.
●     The  sole  objective  of  the  examination  of  the  officers  was  to  ascertain  the  properties  and i ncome  of  the  respondent  which  can  be  subjected  for  execution i n  order  to  satisfy  the  final judgment and nothing else. 

 
 DOCTRINE
 It i s  well-settled  that  a  corporation  has i ts  own l egal  personality  separate  and  distinct  from  those  of i ts  stockholders,  directors  or  officers.  Absent  any  evidence  that  a  corporate  officer  and/or  director  has  exceeded  their  authority,  or  their  acts  are  tainted  with  malice  or  bad  faith,  they  cannot  be  held  personally l iable  for  their  official  acts.  Here,  there  was  neither  any  proof  that  Chua  acted  without  or i n  excess  of  his  authority  nor  was  motivated  by  personal i ll-will  towards  the  respondent to be solidarily liable with the company.
​
 FACTS:
 Joyce  Anabelle  L.  Orpilla  (respondent)  was  employed  by  Stradcom  as  Human  Resources  Administration  Department  (HRAD)  Head,  under  a  probationary  status  for  six  months.  Chua,  the  President  and  Chief  Executive  Officer  (CEO)  of  Stradcom, i ssued  a  Memorandum  addressed  to  the  Chief  Operating  Officer  (COO),  Ramon  G.  Reyes  (Reyes),  and  Chief  Financial  Officer  (CPO),  Raul  C.  Pagdanganan  (Pagdanganan),  announcing  the  reorganization  of  the  HRAD.  After  the  turn-over  of  the  documents  and  equipment  of  HRAD,  respondent i nquired f rom  Chua  as  to her status in the light of the said reorganization.
 Chua,  on  the  other  hand,  replied  that  the  management  has l ost i ts  trust  and  confidence i n  her  and i t  would  be  better i f  she  resigned.  Respondent  protested  the  resignation  and i nsisted  that i f  there  were  charges  against  her,  she  was  open  for  formal i nvestigation.  Chua,  however,  was  not  able  to  come  up  with  any  charges.  On  January  13,  2003,  per  advice  of  Atty.  Pilapil,  respondent  reported  for  work  but  the  guards  refused  her  entry  and  advised  her  to  take  a l eave  of  absence.  Respondent  filed  a  complaint  for  constructive  dismissal  with  monetary  claims of backwages, attorney's fees and damages.
 LA  ruled  that  respondent  was i llegally  dismissed  and  Chua i s  solidarily l iable  with  Stradcom  for  the  payment  of  the  monetary  awards  to  respondent which the NLRC reversed. CA reversed NLRC.

 ISSUE:  Whether Chua must be held solidarily liable (NO)

 RULING:
 The  solidary l iability  of  Chua  as  a  corporate  officer i s  not  proper  and  must  be  recalled.  It i s  well-settled  that  a  corporation  has i ts  own l egal  personality  separate  and  distinct  from  those  of i ts  stockholders,  directors  or  officers.  Absence  of  any  evidence  that  a  corporate  officer  and/or  director  has  exceeded  their  authority,  or  their  acts  are  tainted  with  malice  or  bad  faith,  they  cannot  be  held  personally l iable  for  their  official  acts.  Here,  there  was  neither  any  proof  that  Chua  acted  without  or i n  excess  of  his  authority  nor  was  motivated  by  personal i ll-will  towards  respondent  to  be  solidarily l iable  with  the  company.  We  quote  with  affirmation  the  NLRC's  pronouncement,  viz:  Finally,  on  the i ssue  of  whether  or  not  the  Labor  Arbiter  committed  manifest  error i n  ordering  appellant  Chua  solidarily l iable  with  appellant  corporation,  we  have  to  rule i n  the  affirmative.  Appellant  Chua  cannot  be  made  solidarily l iable  with  appellant  corporation  for  any  award i n f avor  of  appellee.  Appellant  corporation i s  separate  and  distinct f rom  Appellant  Chua.
 x  x  x  x  Appellant  Chua's  acts  were  official  acts,  done i n  his  capacity  as  an  officer  of  appellant  corporation  on i ts  behalf.  There i s  no  showing  of  any  act,  or  that  he  acted  without  or i n  excess  of  his  authority  or  was  motivated  by  personal i ll-will  toward  appellee.  Stated  simply,  appellant  Chua  was  merely  doing  his j ob.  In  fact,  he  even  tried  to  save  appellee  from undue embarrassment