Jurisprudence for GFL

Defense:
Corporation as a Separate Entity
G.R. No. 166282 February 13, 2013

HEIRS OF FE TAN UY (Represented by her heir, Mauling Uy Lim), Petitioners,

vs.
INTERNATIONAL EXCHANGE BANK, Respondent.

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G.R. No. 166283

GOLDKEYDEVELOPMENT CORPORATION, Petitioner,

vs.
INTERNATIONAL EXCHANGE BANK, Respondent.

Basic is the rule in corporation law that 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. Following this principle, obligations incurred by the corporation, acting through
its directors, officers and employees, are its sole liabilities. A director, officer or employee of a
corporation is generally not held personally liable for obligations incurred by the
corporation.24 Nevertheless, this legal fiction may be disregarded if it is used as a means to
perpetrate fraud or an illegal act, or as a vehicle for the evasion of an existing obligation, the
circumvention of statutes, or to confuse legitimate issues.25 This is consistent with the provisions of
the Corporation Code of the Philippines, which states:

Lack of Capacity to sue

G.R. No. 203775 August 5, 2014

ASSOCIATION OF FLOOD VICTIMS and JAIME AGUILAR HERNANDEZ, Petitioners,

vs.
COMMISSION ON ELECTIONS, ALAY BUHAY COMMUNITY DEVELOPMENT FOUNDATION,
INC., and WESLIE TING GATCHALIAN, Respondents.

Petitioners do not have legal capacity to sue. Sections 1 and 2, Rule 3 of the 1997 Rules of Civil
Procedure read:

SECTION 1. Who may be parties; plaintiff and defendant. Only natural or juridical persons, or
entities authorized by law may be parties in a civil action. The term "plaintiff" may refer to the
claiming party, the counter-claimant, the cross-claimant, or the third (fourth, etc.) -party plaintiff. The
term "defendant" may refer to the original defending party, the defendant in a counterclaim, the
cross-defendant, or the third (fourth, etc.) -party defendant.
SECTION 2. Parties in interest. A real party in interest is the party who stands to be benefited or
injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise
authorized by law or these Rules, every action must be prosecuted or defended in the name of the
real party in interest.

Under Sections 1 and 2 of Rule 3, only natural or juridical persons, or entities authorized by law may
be parties in a civil action, which must be prosecuted or defended in the name of the real party in
interest. Article 44 of the Civil Code lists the juridical persons with capacity to sue, thus:

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose, created by law;
their personality begins as soon as they have been constituted according to law;

(3) Corporations, partnerships and associations for private interest or purpose to which the
law grants a juridical personality, separate and distinct from that of each shareholder, partner
or member. (Emphasis supplied)

Section 4, Rule 8 of the Rules of Court mandates that "[f]acts showing the capacity of a party to sue
or be sued or the authority of a party to sue or be sued in a representative capacity or the legal
existence of an organized association of persons that is made a party, must be averred."

The members cannot represent their association in any suit without valid and legal authority. Neither
can their signatures confer on the association any legal capacity to sue. Nor will the fact that SSHA
belongs to the Federation of Valenzuela Homeowners Association, Inc., suffice to endow SSHA with
the personality and capacity to sue. Mere allegations of membership in a federation are insufficient
and inconsequential. The federation itself has a separate juridical personality and was not impleaded
as a party in HLURB Case No. REM-070297-9821 nor in this case. Neither was it shown that the
federation was authorized to represent SSHA. Facts showing the capacity of a party to sue or be
sued or the authority of a party to sue or be sued in a representative capacity or the legal existence
of an organized association of persons that is made a party, must be averred. Hence, for failing to
show that it is a juridical entity, endowed by law with capacity to bring suits in its own name, SSHA is
devoid of any legal capacity, whatsoever, to institute any action. 9

G.R. No. 110318 August 28, 1996

COLUMBIA PICTURES, INC., ORION PICTURES CORPORATION, PARAMOUNT PICTURES

CORPORATION, TWENTIETH CENTURY FOX FILM CORPORATION, UNITED ARTISTS
CORPORATION, UNIVERSAL CITY STUDIOS, INC., THE WALT DISNEY COMPANY, and
WARNER BROTHERS, INC., petitioners,
vs.
COURT OF APPEALS, SUNSHINE HOME VIDEO, INC. and DANILO A.
PELINDARIO, respondents.

Among the grounds for a motion to dismiss under the Rules of Court
are lack of legal capacity to sue 29 and that the complaint states no cause of action. 30 Lack of legal
capacity to sue means that the plaintiff is not in the exercise of his civil rights, or does not have the
necessary qualification to appear in the case, or does not have the character or representation he
claims. 31 On the other hand, a case is dismissible for lack of personality to sue upon proof that the plaintiff
is not the real party in interest, hence grounded on failure to state a cause of action. 32 The term "lack of
capacity to sue" should not be confused with the term "lack of personality to sue." While the former refers
to a plaintiff's general disability to sue, such as on account of minority, insanity, incompetence, lack of
juridical personality or any other general disqualifications of a party, the latter refers to the fact that the
plaintiff is not the real party in interest. Correspondingly, the first can be a ground for a motion to dismiss
based on the ground of lack of legal capacity to sue; 33 whereas the second can be used as a ground for a
motion to dismiss based on the fact that the complaint, on the face thereof, evidently states no cause of
action. 34

VERIFICATION AND CERTIFICATION

G.R. No. 191906 June 2, 2014

JOSELITO MA. P. JACINTO (Formerly President of F. Jacinto Group, Inc.), Petitioner,

vs.
EDGARDO* GUMARU, JR., Respondent.