MERCANTILE LAW

CORPORATION CODE

VICMAR DEVELOPMENT CORPORATION VS. ELARCOSA

G.R. NO. 202215, DECEMBER 9, 2015, SECOND DIVISION, DEL CASTILLO, J.

Where it appears that business enterprises are owned, conducted and controlled by the same
parties, law and equity will disregard the legal fiction that these corporations are distinct
entities and shall treat them as one. This is in order to protect the rights of third persons, as
in this case, to safeguard the rights of respondents.

HARPOON MARINE SERVICES, INC., et al. v. FERNAN H. FRANCISCO

G.R. No. 167751, 02 March 2011, THIRD DIVISION (Del Castillo, J.)

As held in the case of MAM Realty Development Corporation v. National Labor Relations
Commission, “obligations incurred by corporate officers, acting as such corporate agents,
are not theirs but the direct accountabilities of the corporation they represent.” As such, they
should not be generally held jointly and solidarily liable with the corporation. The general
rule is grounded on the theory that a corporation has a legal personality separate and distinct
from the persons comprising it. To warrant the piercing of the veil of corporate fiction, the
officer’s bad faith or wrongdoing “must be established clearly and convincingly” as “bad faith
is never presumed.”

GIRLY G. ICO vs. SYSTEMS TECHNOLOGY INSTITUTE, INC.,

MONICO V. JACOB and PETER K. FERNANDEZ
G.R. No. 185100, July 9, 2014, J. Del Castillo

A corporation, as a juridical entity, may act only through its directors, officers and employees.
Obligations incurred as a result of the directors’ and officers’ acts as corporate agents, are
not their personal liability but the direct responsibility of the corporation they represent. As
a rule, they are only solidarily liable with the corporation for the illegal termination of services
of employees if they acted with malice or bad faith.
To hold a director or officer personally liable for corporate obligations, two requisites must
concur: (1) it must be alleged 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) there must be proof that the officer acted in bad faith.

AGUIRRE II V. FQB+7, INC.,

G.R. NO. 170770, JANUARY 9, 2013, SECOND DIVISION, DEL CASTILLO, J.

The dissolution of the corporation simply prohibits it from continuing its business. However,
despite such dissolution, the parties involved in the litigation are still corporate actors. The
dissolution does not automatically convert the parties into total strangers or change their
intra-corporate relationships. Neither does it change or terminate existing causes of action,
which arose because of the corporate ties between the parties. Thus, a cause of action
involving an intra-corporate controversy remains and must be filed as an intra-corporate
dispute despite the subsequent dissolution of the corporation.

BANKING LAWS

LAND BANK OF THE PHILIPPINES VS. EMMANUEL OÑATE

G.R. NO. 192371; JANUARY, J. DEL CASTILLO

A bank who mismanages the trust accounts of its client cannot benefit from the inaccuracies
of the reports resulting therefrom. It cannot impute the consequence of its negligence to the
client. The bank must record every single transaction accurately, down to the last centavo
and as promptly as possible. This has to be done if the account is to reflect at any given time
the amount of money the depositor can dispose of as he sees fit, confident that the bank
will deliver it as and to whomever he directs.