MARTINEZ VS CA (2004)
FACTS: Respondent BPI International Finance is a foreign corporation not doing business in the Philippines, a deposit-taking and engaged in i n investment banking operations company organized and existing under and by virtue of the las of !ongkong"
#intas $argas, $td" %#$$& as also a foreign corporation, established in !ongkong, 'he registered shareholders of the #$$ in !ongkong ere the (verseas ( verseas )ominee, $td" and *hares )ominee, $td", hich ere mainly nominee shareholders" In !ongkong, the nominee shareholder of #$$ as Baker + cenzie )ominees, $td", a leading solicitor firm" !oever, beneficially, the company as e.ually oned by essrs" Ramon *iy, Ricardo $opa, /ilfrido #" artinez, and iguel 0" $acson" 'he bulk of the business of the #$$ as the importation of molasses from the Philippines, principall y from the ar 'ierra #orporation, and the resale thereof in the international market" 1 !oever, ar 'ierra #orporation also sold molasses to its customers" 2 /ilfrido #" artinez as the president of ar 'ierra #orporation, hile its executive vice-president as Blamar 3onzales" 'he business operations of both the #$$ and ar 'ierra #orporation ere run by / ilfrido artinez and 3onzales" 4bout 567 of the capital stock stock of ar 'ierra 'ierra #orporation as oned by R0$ artinez artinez Fishing #orporation %R0$&, the leading tuna fishing outfit in the Philippines" Petitioner Ruben artinez as the president of R0$ and a member of the board of directors thereof" 'he ma8ority stockholders of R0$ ere Ruben artinez and his brothers, 0ose and $uis artinez" *ixty-eight %29& percent of the total assets of Ruben artinez ere in the R0$" In :;<;, respondent BPI International Finance %then 4IF$& granted #$$ a letter of credit in the amount of =*>?,@@@,@@@" /ilfrido artinez signed the letter agreement ith the respondent for the #$$" 'he respondent and the #$$ had made the folloing arrangementsA #intas $argas, $td" ill purchase molasses from the Philippines, mainly from ar 'ierra #orporation, and then sell the molasses to foreign countries" Both the purchase of the molasses from the Philippines and the subse.uent sale thereof to foreign customers ere effected by means of $etters of #redit" *ometime in 0uly :;96, Problems ensued in the reconciliation of the transactions involving the funds of the #$$, including the P )os" @2? and @95 ith the respondent, as ell as the receivables of ar 'ierra #orporation" #onferences ere held beteen the executive committee of ar 'ierra #orporation and some of its officers, including iguel 0" $acson, and the possibility of placing the #$$ on an inactive status ere discussed" (n 0une :<, :;9?, the respondent filed a complaint against the #$$, /ilfrido artinez, $acson, 3onzales, and petitioner Ruben artinez, ith the R'# of aloocan #ity for the collection of the principal amount of =*>?5@,@@@, ith a plea for a rit of preliminary attachment" 'he trial court ruled that the #$$ as a mere paper company ith nominee shareholders in !ongkong" It ruled that the principle of piercing the veil of corporate entity as applicable in this
case, and held the defendants liable, 8ointly and severally, for the claim of the respondent, on its finding that the defendants merely used the #$$ as their business conduit" 'he trial court declared that the ma8ority shareholder of ar 'ierra #orporation as the R0$, controlled by petitioner Ruben artinez and his brothers, 0ose and $uis artinez, as ma8ority shareholders thereof" oreover, petitioner Ruben artinez as a 8oint account holder of P )os" @2? and @95" 'he trial court, likeise, found that the auditors of ar 'ierra #orporation and the #$$ confirmed that the defendants oed =*>?5@,@@@" 'he trial court concluded that the respondent had established its causes of action against /ilfrido artinez, $acson, 3onzales, and petitioner Ruben artinezC hence, held all of them liable for the claim of the respondent" 'he decision as appealed to the #4" (n 0une 6<, :;;<, the #4 rendered its decision, the dispositive portion of hich readsA WHEREFORE, the decision of the #ourt a .uo dated December E:;, :;;: is hereby MODIFIED, by exonerating appellant Blamar 3onzales from any liability to appellee and the complaint against him is DISMISSED" 'he decision appealed from is AFFIRMED in
all other respect"
ISSUE: hether the respondent adduced the re.uisite .uantum of evidence arranting the piercing of the veil of corporate entity of the #$$"
HELD: A corporation !in" a #!r! $ction o% &a' p!c&iar *itation* or +a&i, "ron,* can !-i*t to 'arrant a&!it *parin"&. t/! ,i*r!"ar, o% it* in,!p!n,!nt !in" an, t/! pi!rcin" o% t/! corporat! +!i& 41 T/* t/! +!i& o% *!parat! corporat! p!r*ona&it. #a. ! &i%t!, '/!n *c/ p!r*ona&it. i* *!, to ,!%!at p&ic con+!ni!nc! *ti%. 'ron" prot!ct %ra, or ,!%!n, cri#!3 or *!, a* a */i!&, to con%*! t/! &!"iti#at! i**!*3 or '/!n t/! corporation i* #!r!&. an a,nct a *in!** con,it or an a&t!r !"o o% anot/!r corporation or '/!r! t/! corporation i* *o or"ani!, an, contro&&!, an, it* a5air* ar! *o con,ct!, a* to #a6! it #!r!&. an in*tr#!nta&it. a"!nc. con,it or a,nct o% anot/!r corporation3 47 or '/!n t/! corporation i* *!, a* a c&oa6 or co+!r %or %ra, or i&&!"a&it. or to 'or6 in*tic! or '/!r! n!c!**ar. to ac/i!+! !8it. or %or t/! prot!ction o% t/! cr!,itor* 49 In *c/ ca*!* '/!r! +a&i, "ron,* !-i*t %or pi!rcin" t/! +!i& o% corporat! !ntit. t/! corporation 'i&& ! con*i,!r!, a* a #!r! a**ociation o% p!r*on* 4 T/! &iai&it. 'i&& ,ir!ct&. attac/ to t/!# ;