15. Vivian T. Ramirez, et al. vs. Mar Fishing Co., Inc,. et al.

, AUTHOR:
G.R. No. 168208, June 13, 2012 Notes: SC cited the case of Indophil Textile Mill Workers Union vs.
TOPIC: Separate Personality/ Piercing the Veil Calica: “The fact that the businesses of private respondent and Acrylic are
PONENTE: SERENO, J.: related, that some of the employees of the private respondent are the same
persons manning and providing for auxiliary services to the units of Acrylic,
and that the physical plants, offices and facilities are situated in the same
compound, it is our considered opinion that these facts are not sufficient to
justify the piercing of the corporate veil of Acrylic.”

CASE LAW/ DOCTRINE:

Since piercing the veil of corporate fiction is frowned upon, those who seek to pierce the veil must clearly establish that the separate
and distinct personalities of the corporations are set up to justify a wrong, protect a fraud, or perpetrate a deception.
Emergency Recit:
Mar Fishing and Miramar are both engaged in the business of fishing and canning of tuna. Mar Fishing sold its assets to Miramar and closed
its business. The labor union of Mar Fishing and Miramar entered into an agreement that Miramar will absorb the employees of Mar Fishing
but petitioners in this case were neither hired nor given their separation pay. They filed for illegal dismissal and payment of monetary
claims. LA found Mar Fishing only liable. Upon appeal to the NLRC, it pierced the veil of corporate fiction and ruled that both were the same
entity since the officers were the same and made both of them solidarily liable. But on reconsideration, the NLRC modified its ruling and held
that they are different entities and that only Mar Fishing is liable. ISSUE: Can the doctrine of piercing the veil of corporate fiction be applied?
No, They are separate entities. SC: Both LA & NLRC ruled they are separate and distinct entities based on the marked difference in their
stock ownership. Those who seek to pierce veil must clearly establish that the separate and distinct personalities of the corporations
are set up to justify a wrong, protect a fraud, or perpetrate a deception. In this case, petitioners failed to do so. Mere allegations that
Miramar took over Mar Fishing’s operations, that they have common director, and have the same business venture in tuna canning
plant operation will not suffice.
FACTS:
 Respondent MarFishing Co., Inc. (Mar Fishing) is engaged in the business of fishing and canning of tuna. It sold its principal
assets to co-respondent, Miramar Fishing Co., Inc. (Miramar). The proceeds were paid to TIDCORP to cover Mar Fishing’s debt
P897M. Due to the transfer, Mar Fishing told its employees (EEs) that the company would cease to operate.
 Mar Fishing’s labor union and Miramar entered into a Memorandum of Agreement wherein Miramar (acquiring company), shall
absorb Mar Fishing’s regular rand & file EEs. But petitioners were not hired or given separation pay by Miramar. Hence, they
filed complaints for illegal dismissal and money claims.
 LA: No illegal dismissal since it was for an authorized cause (closure of business). It ordered Mar Fishing to give separation pay
to the affected workers. It dismissed the case against Miramar
 NLRC: It pierced the veil of corporate fiction & ruled that Mar Fishing AND Miramar were 1 and the same entity because their
officers were the same. NLRC made both Mar Fishing & Miramar solidarily liable as to the payment of the monetary claims.
 MR to NLRC: It MODIFIED its ruling and imposed liability ONLY on Mar Fishing. It held that there is no cause of action against
Miramar because labor contracts cannot be enforced against the transferee of an enterprise in the absence of a stipulation
in the contract that the transferee assumes the obligation of the transferor.
o But petitioners still appealed to the CA this time arguing that BOTH Mar Fishing and Miramar should be liable for their
separation. pay & back wages.
 CA: Dismissed the case based on procedural infirmities. Only 3 petitioners of 228 petitioners signed the Verification & Certification
against non-forum shopping
 Petitioner’s (workers) contention:
o Both Mar Fishing and Miramar should be held liable. They based their conclusions on the Memorandum of Agreement and
Supplemental Agreement between Miramar and Mar Fishing’s labor union, as well as the General Information Sheets and
Company Profiles of the two companies.
 Miramar simply took over the operations of Mar Fishing
 That these companies are 1 and the same entity because they have common directors and have the same
business venture in tuna canning plant operation.
ISSUE(S): Can the doctrine of piercing the veil of corporate fiction be applied in this case?
HELD: No. Mar Fishing and Miramar are separate entities.

RATIO:
LA & NLRC both ruled that Miramar & Mar Fishing are separate and distinct entities based on the marked difference in their stock
ownership. The fact that Mar Fishing’s officers remained as such in Miramar doesn’t automatically mean that the 2 companies are 1 and the
same.

The veil of corporate fiction between the 2 companies cannot be pierced by the rest of petitioner’s submissions/allegation which are (a) the
alleged take-over by Miramar of Mar Fishing’s operations and; (b) the evident similarity of their businesses.

Since piercing the veil of corporate fiction is frowned upon, those who seek to pierce the veil must clearly establish that the separate
and distinct personalities of the corporations are set up to justify a wrong, protect a fraud, or perpetrate a deception.

Since Mar Fishing and Miramar are separate entities, only Mar Fishing is liable to pay the monetary claims of the affected workers. The
back wages & retirement pay earned from the former employer cannot be filed against the new owners or operators of an enterprise.