TO : Mr. Numeriano Mallen, Jr.
FROM : VIPS Dining Head
DATE : 28 April 1998
RE : AS STATED
=====================================================
After a thorough review of your performance and the series of Vacation Leaves (8 days), Paternity Leave (7 days) and Sick Leave (7 days) due to several illness within the first quarter of the year, we have concluded that you are not physically fit and needs to recharge to enable you to regain your physical fitness.
As such, we are awarding to you the rest of your Vacation/Sick Leave plus Two and a half (2 ½) months (without pay) to rest and regain your physical health within the prescribed vacation.
During your vacation, you are not allowed to loiter within the premises of VIPS RESTAURANT; but instead to rest and do some health exercise and medical check-up for your physical fitness recovery program.
Moreover, when you report back to work, you are to present to the management a certificate indicating that you are fit to work regularly.
Your vacation shall take effect on April 30, 1998 up to August 1, 1998.
For your information and guidance.Sgd.
Mr. Patty C. Bocar
Noted By:
Sgd.
Ms. Ma. Theresa Linaja5
WHEREFORE, premises above considered a decision is hereby issued declaring the dismissal of the complainant illegal. Consequently, respondents VIP's Coffee Shop & Restaurant and/or Irene Francisco are ordered to reinstate complainant to his former or equivalent position without loss of seniority rights, and to pay complainant jointly and severally his backwages hereby fixed at P88,000.00 as of August 31, 1999, plus his paternity pay, and attorney's fees equivalent to the monetary award, all in the aggregate of ninety nine thousand three hundred fifty pesos and 90/100 centavos (P99,350.90).
Respondents are likewise ordered to pay complainant P50,000.00 for moral damages and P20,000.00 for exemplary damages.
SO ORDERED.6
WHEREFORE, the Decision of the Labor Arbiter dated August 25, 1999 is hereby MODIFIED and respondents are instead directed to pay the complainant separation pay in the amount of P13,750.00 plus his paternity leave pay in the amount of P1,519.00 (P217.00 x 7 days). The award for moral and exemplary damages are deleted and set aside for lack of merit.
SO ORDERED.7
WHEREFORE, the petition is hereby GRANTED. The decision of the NLRC, First Division, dated December 21, 2001, is hereby SET ASIDE and the decision of Labor Arbiter Madjayran H. Ajan dated August 25, 1999 is hereby REINSTATED.
SO ORDERED.8
Complainants did not allege in their complaint that Carag willfully and knowingly voted for or assented to any patently unlawful act of MAC. Complainants did not present any evidence showing that Carag willfully and knowingly voted for or assented to any patently unlawful act of MAC. Neither did Arbiter Ortiguerra make any finding to this effect in her Decision.
Complainants did not also allege that Carag is guilty of gross negligence or bad faith in directing the affairs of MAC. Complainants did not present any evidence showing that Carag is guilty of gross negligence or bad faith in directing the affairs of MAC. Neither did Arbiter Ortiguerra make any finding to this effect in her Decision.
x x x x
To hold a director personally liable for debts of the corporation, and thus pierce the veil of corporate fiction, the bad faith or wrongdoing of the director must be established clearly and convincingly. Bad faith is never presumed. Bad faith does not connote bad judgment or negligence. Bad faith imports a dishonest purpose. Bad faith means breach of a known duty through some ill motive or interest. Bad faith partakes of the nature of fraud. In Businessday Information Systems and Services, Inc. v. NLRC, we held:There is merit in the contention of petitioner Raul Locsin that the complaint against him should be dismissed. A corporate officer is not personally liable for the money claims of discharged corporate employees unless he acted with evident malice and bad faith in terminating their employment. There is no evidence in this case that Locsin acted in bad faith or with malice in carrying out the retrenchment and eventual closure of the company (Garcia vs. NLRC, 153 SCRA 640), hence, he may not be held personally and solidarily liable with the company for the satisfaction of the judgment in favor of the retrenched employees.14 (Emphasis supplied)
A corporation is an artificial being invested by law with a personality separate and distinct from that of its stockholders and from that of other corporations to which it may be connected.
While a corporation may exist for any lawful purpose, the law will regard it as an association of persons or, in case of two corporations, merge them into one, when its corporate legal entity is used as a cloak for fraud or illegality. This is the doctrine of piercing the veil of corporate fiction. The doctrine applies only when such corporate fiction is used to defeat public convenience, justify wrong, protect fraud, or defend crime, or when it is made as a shield to confuse the legitimate issues, or where a corporation is the 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.
To disregard the separate juridical personality of a corporation, the wrongdoing must be established clearly and convincingly. It cannot be presumed.16 (Emphasis supplied)
It is settled that in the absence of malice, bad faith, or specific provision of law, a director or an officer of a corporation cannot be made personally liable for corporate liabilities.
x x x x
Gustilo and Castro, as corporate officers of Lowe, have personalities which are distinct and separate from that of Lowe's. Hence, in the absence of any evidence showing that they acted with malice or in bad faith in declaring Mutuc's position redundant, Gustilo and Castro are not personally liable for the monetary awards to Mutuc.18 (Emphasis supplied)
Endnotes:
* Designated additional member per Special Order No. 883 dated 1 September 2010.
** Designated additional member per Special Order No. 886 dated 1 September 2010.
1 Under Rule 45 of the Rules of Court.
2 Rollo, pp. 23-33. Penned by Associate Justice Regalado E. Maambong, with Associate Justices Martin S. Villarama, Jr. (now a member of this Court) and Lucenito N. Tagle concurring.
3 Id. at 35-39. Penned by Commissioner Alberto R. Quimpo, with Commissioner Vicente S.E. Veloso concurring. Presiding Commissioner Roy V. Señeres was on leave.
4 Id. at 40-46.
5 Id. at 55.
6 Id. at 43-46.
7 Id. at 38-39.
8 Id. at 33.
9 325 Phil. 145 (1996).
10 Id. at 156.
11 See Section 31 of the Corporation Code, which provides:
Sec. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.
When a director, trustee or officer attempts to acquire or acquires, in violation of his duty, any interest adverse to the corporation in respect of any matter which has been reposed in him in confidence, as to which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee for the corporation and must account for the profits which otherwise would have accrued to the corporation.
See also Ramoso v. Court of Appeals, 400 Phil. 1260 (2000).
12 See Ramoso v. Court of Appeals, 400 Phil. 1260 (2000).
13 G.R. No. 147590, 2 April 2007, 520 SCRA 28.
14 Id. at 48-50.
15 G.R. No. 146667, 23 January 2007, 512 SCRA 222.
16 Id. at 245-246.
17 G.R. Nos. 164813 and 174590, 14 August 2009, 596 SCRA 140.
18 Id. at 155.
19 G.R. Nos. 148263 and 148271-72, 21 April 2009, 586 SCRA 100.
20 Id. at 110.
21 Rollo, p. 134.
22 See Firestone Tire and Rubber Company of the Philippines v. Tempongko, 137 Phil. 239, 244 (1969), where the Court held "failure of any of the parties in x x x a case to appeal the judgment as against him makes such judgment final and executory."