PADILLA-RUMBAUA vs. RUMBAUA

"a writer takes his pen, 

to write the words again, that all in love is fair"

I know.. it's February. I think one of the most beautiful cases decided by the Supreme Court that inevitably touched on love  was the Chua-Clave case.

Not only was the decision penned by one of the greatest ponentes (decision writers) of all time (in the person of Justice Regalado), but also exemplified one of the foremost virtues of love, steadfastness.

The Chua case undeniably displayed a strong character of a woman willing to storm the rudiments of courts in order to regain her dignity.. and to prove once and for all that true love indeed could conquer all. 

In the case at bar.. it's different. Reality takes it's course in the most unimaginable detour and stares you in the face,  where the courts, though reluctant to tread on complex and subjective matters of the heart had no choice but to intervene, yet upon intervention conducted itself civil and carefully tip-toed its way as if it seems it was walking on glass.

But mind you, it was in this particular case where the Supreme Court was caught stating one of the most profoundly realistic 'love quote'  that would stare at you and leave you hanging blanked face that is if you are that naive lacking the experience and knowledge of the sad realities of love.

"Individuals who are in love had the power to let love grow or let love die. It’s a choice one had to face when love’s not the love he expected"                                     – Rowena Padilla-Rumbaua v. Edward Rumbaua (GR No. 166738)

An off-guard way of love it self slapping you and waking you up to one of its stark, not so glorious, other side attribute, that love is not merely endless bliss and happiness, neither a dreamy fairy tale story, nor a fragrant bed of roses. It doesn't always stand in fortitude, not always believing a noble victorious outcome as the Chua vs. Clave case, it doesn't always persevere. But it assures you that it is still there, that even the changing of words to one of the most respected legal maxims we legal minds hold dear, may still carry you through. Dura LOVE, sed LOVE... Love may be harsh.. but it is Love.  

The present petition traces its roots to the petitioner Rowena Padilla-Rumbaua's complaint before the QC-RTC asking the court for a Declaration of Nullity of her marriage against the respondent Edward Rumbaua alleging among others that the respondent was psychologically incapacitated to exercise the essential obligations of marriage.

The court promulgated for her a favorable decision declaring her marriage to the respondent null and void on the ground of her husband's psychological incapacity. However, came this petition. Petitioner in this case challenges the 2004 decision of the Court of Appeals which reversed her favorable RTC ruling.

Here's the Facts antecedent to the case.. 

Petitioner related that she and the respondent were childhood neighbors in Nueva Vizcaya. Sometime in 1987, they met again and became sweethearts but the respondent’s family did not approve of their relationship.

After graduation from college in 1991, the respondent promised to marry the petitioner as soon as he finds a job. The job came in 1993, when Philippine Air Lines (PAL) hired the respondent as computer engineer.  However, the respondent proposed to the petitioner that they first have a “secret marriage” in order not to antagonize his parents.  Petitioner agreed; they were married in Manila on February 23, 1993.

Here's the thing though.. 

Due to the clandestine nature of a "secret marriage" petitioner and the respondent, however, never lived together. Aside from his fear of his parents disapproval, respondent refused to live with the petitioner for fear that public knowledge of their marriage would affect his application for a PAL scholarship. The petitioner stayed with her sister in Fairview, QC while the respondent lived with his parents in Novaliches. In spite of this arrangement the two saw each other every day during the first six months of their marriage, they would have sexual trysts in motels.

Seven months into their marriage, the couple’s daily meetings became occasional visits to the petitioner’s house in Fairview. And later that year, respondent lost his employment with PAL. And the parties respective families discovered their secret marriage. The respondent's mother tried to convince him to live in the states for time being but he refused. To appease his mother he continued living separately from the petitioner.

(unfinished)

LAUREANO INVESTMENT & DEVELOPMENT CORP. vs. COURT OF APPEALS

"No other love, 
let no other love know the wonder of your spell"

What.. Mistake in the Blow?? haha. Just imagine the Lady of Justice so deeply and madly in-love.. boy.. there'll be a miscarriage of justice that's for sure. I swear.

If ever there's a blog post that testifies that love is not just stupid sweet-nothings and cutie-patootie stuff.. this is it.

Deep love is as strong as death, the holy scriptures it self attests to that. The writer in Song of Solomon (c.8 v.6) wrote "Place me like a seal over your heart, like a seal on your arm; for love is as strong as death, its jealousy unyielding as the grave. It burns like blazing fire, like a mighty flame." woah intense.  

I think the preceding passage in my own opinion had been one of the basis for the criminal principle of 'passion and obfuscation' as a mitigating circumstance in American criminal justice system, from which we based our own criminal code of course. Love could be that powerful you know, once it had been differently tapped. The characters of the star-crossed lovers basically plays a big role on its outcome to come up with an impulse so powerful the lovers themselves cannot counter.

That is precisely the reason why the lady of justice is blindfolded. In order for her not to see the man she deeply loves at the brink of being meted his own punishment. Otherwise she will move heaven and earth to tilt the balance and save her one great love.

But of course the magistrates should have known better, they were wrong by merely blindfolding a lady. She knows his voice and so she will play it by the ear.

She maybe raising the balance upright for all to see and readies the sword she clings to strike... but her head tilts as she focuses one ear sharp and penetrating seeking to distinguish that voice of the man she loves. And she heard the voice familiar, the beautiful distinctive sound of her beloved. 

And so she deliberately tilts the balance. But the supreme magistrates have distinguished the difference. And ordered the lady to remove her blindfold and to step down from the podium. 

But then the verdict was announced. "Guilty beyond reasonable doubt!.. Death by hanging!!"

She almost fainted at the clamor of the crowd. With eyes drowned in tears she gazed at her beloved in deepest sorrow. And finally gathering the last vestige of her remaining strength she raised the sword she clung to and with a propulsive force she lunged the pointed sharp weapon into her heart. 

Ouch!.. ouch!.. ouch!... tsk tsk.  See I told you I could be the greatest writer ever. So move over Tolstoy, Hemingway, who else, Sparks?.  I'm the greatest novelist. The greatest lover that ever walked this earth LOL. Aww!!

Let's get to the case.. before the ladies take out their tissues and cry and blow their noses, my goodness.

Ah this is such a.. simple technical case. The technicality of this case amounted to a mere SEC registration issue. And up to now I couldn't find out the logic behind it. Was it a counsel error thing? My goodness, this is simple arithmetic. Not registered with SEC = No juridical personality. And no juridical personality = NO CAPACITY TO SUE. Even a scrappy college student could get that. It's the registration that is vital. And it is SEC that gives you the juridical personality. Geez.. how simple can it get? I better hunt down a case where it says otherwise.

OK Here's the FACTS:

Spouses Reynaldo Laureano and Florence Laureano are majority stockholders of petitioner LAUREANO INVESTMENT AND DEVELOPMENT CORPORATION.

They entered into a series of loan and credit transactions with PNCB (PHILIPPINE NATIONAL COOPERATIVE BANK).  And to secure payment of the loans, they executed Deeds of Real Estate Mortgage subject of which are 2 parcels of land   registered in the name of the Laureano spouses.  

Now in view of their failure to pay their indebtedness, PNCB applied for extrajudicial foreclosure of the real estate mortgages and so titles thereof were consolidated in PNCB’s name.

Thereafter, their foreclosed properties were set for sale by the bank and private respondent BORMAHECO, INC. have expressed interest and became the successor of the obligations and liabilities of PNCB over subject lots by virtue of a Deed of Sale/Assignment including the 2 parcels of land in question, formerly registered in the name of the Laureano spouses.  

5 days after securing titles over the said properties, BORMAHECO filed an Ex-Parte Petition for the Issuance of  a WRIT OF POSSESSION of the 2 lots formerly owned by the Laureanos. 

LIDECO CORPORATION (seems to be a name that came out of nowhere, stands as an acronym of the petitioner but here it presents it self not as an acronym but a one word corporation which well who knows I guess for a purpose to someday work as a veil of corporate fiction god knows what) filed a motion to intervene on the grounds of some stipulations in the original credit transaction the petitioner entered into with PNCB. So.. technically if I'm not mistaken that makes LIDECO the 4th party in interest here. 

However, BORMAHECO which is the 3rd party in the case at bar filed a motion to strike out LIDECO’s complaint in intervention and all other pleadings submitted by LIDECO (let's not get into that) on the ground that the latter has NO JURIDICAL PERSONALITY of its own, and therefore, NO CAPACITY TO SUE.  (shocks, just when their all in the thick of the fight, I'm cut short with the real credit issues)

ISSUE:

Of course here's the question. Does LIDECO, having not been duly registered with the SEC, have the capacity to sue? 

RULING:

Court said NO. 

Section 1, Rule 3 of the Rules of Court provides that only natural or juridical persons or entities authorized by law may be parties to a civil action.  

Under the Civil Code, corporation has a legal personality of its own (Article 44), and may sue or be sued in its name, in conformity with the laws and regulations of its organization (Article 46). 

Additionally, Article 36 of the Corporation Code similarly provides:

“Corporate powers and capacity. -- Every corporation incorporated under this Code has the power and capacity:

1.  TO SUE AND BE SUED IN ITS CORPORATE NAME;... " (Nice try but its not "To Love and Be Loved" LOL it's "To Sue and Be Sued".. it's a totally different thing ha ha ha... ow! it's February!.. alright)

As the trial and appellate courts have held, “LIDECO CORPORATION” HAD NO PERSONALITY TO INTERVENE SINCE IT HAD NOT BEEN DULY REGISTERED AS A CORPORATION.  

(That's the thing with court procedures you know, it could be robotic most of the time, they will only eat or gulp whatever is shoved in front of them. Expect it.. it's for your own good, you don't wanna be jumbled up with this and that do you? or see everything jumbled up for that matter, besides, to us legal practitioners (woah) technicalities are good sources of circumvention.. alright pun intended) 

Court says if petitioner legally and truly wanted to intervene, it should have used its corporate name as the law requires and not another name which it had not registered.  

(Having run out of cards on the table to pull, that's my own take on this. Credit issues where all stipulations already says it and not otherwise must have triggered the petitioner to chuck-in another so-called party in interest in order to delay or utmost to derail the transfer of possession. Otherwise it would have filed the complaint in intervention in its own name. You must understand these are corporate entities, they have legal teams at the most or one or two legal counsel to keep as a retainer at the least. Alangan na bang sabihin nilang "Ay sorry po nagkamali kame.." when it's fuckin' simple arithmetic. There must be an underlying reason behind why a sudden suspicious looking company unduly registered stepped up and claimed to be a party in interest)  

Bottomline is.. Court says it is nowhere in the motion for intervention and complaint in intervention does it appear that “Lideco Corporation” stands for Laureano Investment and Development Corporation.   Bormaheco, Inc., thus, was not estopped from questioning the juridical personality of “Lideco Corporation,” even after the trial court had allowed it to intervene in the case.

So Estoppel is not applicable in this case. Then it seems to be a hard fast rule.

SIBAGAT TIMBER CORP. vs. GARCIA

[Browsing news in the net]  So why is Ms. Gina Lopez feeling fidgety for closing down 23 mining firms when the main reason why these firms are at the brink of being closed down as she herself have said is mainly because these firms are operating in functional watersheds.

Well it's a little bit irresponsible, that I can assure you. I mean you know, to have come up with such a decision like that. I mean you know, close down 23 firms with just a quick snap of a finger?, I mean was there even a study conducted to base this decision?  Well I guess there is. But.. I mean you know.. DENR closing it outright? Not even one or two or three conditions for compliance before closing them down? Have you seen stock exchange in mining plunging down lately? And have you seen the faces of those Filipino-Chinese owners of these mining firms? They're all at a lost, sheepishly looking at each other, couldn't even brake a glass my goodness hahahaha! Horrible faces.

But I dunno, I think we have more than a hundred active mining companies in the country. Less than half of these operating mining firms are metallic miners who dig not merely for gold or silver or what, (di naman literally mga gold digger tong mga to eh)  most of them search for nickel and chromite, the primary material for making our coins and also alloys like that in the automotive industry and stuff.

And more than half of these 100 mining firms go for non-metallic commodities like limestone and sand and gravel which are basic materials for building and construction. In other words the mining industry is an integral part of economic development and national industry.

There you go..

But come to think of it, if you sum it all up, the 23 mining firms the DENR  is closing down do not even comprise 1/4 of all these firms. 

Just imagine if these watersheds and dividing lines between adjacent river system corrodes through irresponsible mining then you're basically reforming and deforming our natural geographical set up.

E baka di na tayo mag mukang archipelago nyan.. puro tubig na tayo LOL. 

I mean don't they even realize that unlike Illegal Logging these stones cannot be regrown like the trees we cut? 

Well I guess there has to be regulation somewhere.

And of course the President may overturn her decision anytime but.. let's see what happens.

Let's get to the case.

This is a case that is actually attached to another case, the "USIPHIL INC. vs. Del Rosario and Sons Logging Enterprises Inc." case.

Sibagat Timber Corporation petitioner in this case of course is a logging firm. Now whether that company is a corporate fiction displaying a veil that needed to be pierced remains a mystery which we'll find out later.

Just mark the Petitioner in this case (Sibagat) in relation to the Respondent in the other case (Del Rosario).

The respondent herein however is a Court Sheriff entrusted with the implementation of a Writ of Execution to conduct a sale by public auction.  Now what is this guy selling as instructed by the court?  This are machinery and mining equipment which are personal property subject of controversy in the previous case. Because in the case entitled "USIPHIL INC. vs. Del Rosario and Sons Logging Enterprises Inc." these personal properties which was owned by Del Rosario & Sons were levied and so respondent Sheriff Garcia was entrusted its implementation. Pag hindi pa klaro yun.. nako. 

In other words Del Rosario here is the judgment debtor.. ngayon mejo siguro ayaw pakawalan ni Del Rosario yung mga gamit nya e di gumawa sya ng isa pang kumpanya para palabasen na actually hindi ako may-ari nyan eh.. si Sibagat... or maybe he has bought Sibagat to answer a need in the future such as this.

Now here comes Sibagat.. on the day of the scheduled levy, Sibagat Timber, represented by Mariano Rana, filed a 3rd Party complaint stating that it is the lawful owner of the properties levied by virtue of I dunno I think a deed of Sale or something. (kalokohan). So yun nga parang naghahabol pa din si Del Rosario. 

Also a TRO was obtained by Sibagat. (Weh!! as in ha.. desperado) However, the public auction proceeded and USIPHIL INC. acquired the certificate of sale for the properties auctioned. So diretso pa din si Sheriff Garcia. Good job!

And USIPHIL INC. filed a motion to dismiss against Sibagat's application for preliminary injunction and the same was granted. 

The CA likewise dismissed Sibagat's appeal, hence this petition for review. (O malinaw yan ah)

ISSUE:

(Question) Did the CA erred in piercing the veil of corporate fiction and holding that Sibagat is one and the same as the judgment debtor?

RULING:

NO. Because the circumstances in this case prove that Sibagat Timber Corp. is a mere instrumentality, adjunct, or conduit of Del Rosario & Sons Logging Enterprise.

As a rule, the veil of corporate fiction will be pierced when used as a shield to perpetrate fraud and/or confuse legitimate issues. There would be basis for piercing when the officers and directors of the two corporations are practically the same and both corporations hold office in the same room.

In this case, the circumstances that: 

1) petitioners (Sibagat Timber) and Del Rosario & Sons Logging hold office in the same building

2) the officers and directors of both corporations are practically the same; and

3) the Del Rosarios assumed management and control of Sibagat and have been acting for and managing its business, bolster the conclusion that petitioner in an alter-ego of the Fel Rosario & Sons Logging Enterprise Inc. 

Word of advice... if you're a dishonest businessman and you're gonna make a dummy company to do the dirty work for you... my goodness wag naman yung halatang-halata... holding office in the same building?.. officers and directors.. the same?  Mali.. LOL

So the veil was pierced. Sibagat therefore of course loses this case.

RAMOSO et al vs. COURT OF APPEALS

(Dashboard Case Digest) I swear I could utter a hundred dashboard confessionals on how fuckin' hard to chew these case digests...

Here's what you should know about piercing the veil. Piercing the Veil is not applicable by just merely theorizing. Piercing the veil of corporate fiction is of course allowed in order to remedy a wrong done, but consequently it cannot be used when there is no wrong committed, as in we're merely asking the court to pierce to justify a theory na "E etong kumpanya na to eh ito din may-ari eh... isa lang yan." You can't just say that.

Of course we all know that the burden of proof is always on the one who is accusing. You have to properly plead your cause in front of the courts. So.. you need proof and you need to go through the process.

So.. I hope I have effectively established that the burden of proving otherwise is on the party seeking to have the court pierce the veil of the corporate entity. Di lang ganun kadali yon..

Alright here's the case:

Avelina Ramoso et al are investors and majority stock holders of franchise branches of Commercial Credit Corporation (CCC), a lending and investment firm. Now CCC contracted with its franchise branches for these branches to assign its receivables to CCC. To those who are not in the know, Receivables are asset designation applicable to all debts, unsettled transactions and other monetary obligations owed to a company by its debtors or customers. It's somewhat a sort of assignment like the Assignment & Novation in Obligations & Contracts. 

Now take note.. this practice was discontinued by CCC due to a Central Bank prohibition called the DOSRI Rule where corporations or banks are prohibited from lending funds to directors, officers, stockholders and persons with related interests (such as the investors herein stated). This regulation and set guidelines are set to make sure that lendings by banks or other financial institutions to its own directors, officers, stockholders or related interests are above board. 

So probably CCC was thinking "How can I circumvent this damn regulation?" This is where CCC incorporated CCC Equity, a wholly owned subsidiary to manage the franchise branches. Then CCC later changed its name to General Credit Corporation (GCC). (so I bet you could smell somethin' fishy here). 

Okay to make it all clear... here's what happened. In view of said hindrance (Central Bank Regulation), what CCC did was it divested itself of its shareholdings in the franchise companies. It incorporated CCC Equity in order to take over the administration of the franchise companies under new management contracts. Thereafter, CCC changed its name to General Credit Corporation (GCC). But in the meantime, CCC continued providing a discounting line for receivables of the franchise companies through CCC Equity. Did it become clear?... or.. muddy clear. Trust me I know the feeling.

Ramoso et al saw this differently. They alleged that they discovered several bad business practices being conducted by GCC, and that such questionable practices actually divested GCC of its assets thereby placing the franchise branches at a disadvantage, that GCC through CCC Equity mismanaged the franchise branches thereby causing imminent losses to the investors. 

Ramoso et al then sued GCC before the Securities and Exchange Commission. The SEC hearing officer ruled in favor of Ramoso et al. thereby piercing the veil of corporate fiction declaring that the franchise branches GCC and CCC Equity are one and the same corporation, and that as such, the franchise branches in whom Ramoso et al invested are not liable to the obligations incurred by GCC. 

The SEC en banc interpreted this differently and reversed the ruling of the hearing officer. Thus Ramoso et al petitioned for appeal before the CA. But the CA however, affirmed the SEC en banc ruling.

ISSUE:

Does this warrant a piercing? Is there a veil of corporate fiction to be pierced in the first place anyway? 

RULING:

NO. Court said Ramoso et al did not properly plead their cause. They merely alleged that CCC Equity is a conduit of GCC. As found by the SEC en banc Ramoso et al were not able to prove that CCC Equity was incorporated in order to perpetrate fraud against them. 

The truth about this is that the petitioners had signed the continuing guaranty of the franchise company's bad debts in their individual acts, and their liabilities arose out of the regular financing venture of the franchise companies, and there was no evidence these bad debts were fraudulently incurred. 

Whether the existence of the corporation should be pierced depends always on Questions of Facts appropriately pleaded. Mere allegation that a corporation is the alter ego of the individual stockholders is insufficient. The presumption is that the stockholders or officers and the corporation are distinct entities. 

The burden of proving otherwise is on the party seeking to have the court pierce the veil of the corporate entity. It was not shown that the debts incurred by GCC were actually incurred in bad faith. 

The thing was there was a pending case relating to the liability of Ramoso et al as guarantors - I think that will be the proper forum to raise their respective liability as regards said debts. But with regards the piercing of this corporate veil? I doubt. So there's no piercing here.

Ramoso et al lost this case.

PHILROCK vs. CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (CIAC)

"You're a beautiful, a beautiful fucked up man

You're setting up your razor wire shrine"

Here's the fucks.. I mean Facts.

Cid spouses right?.. herein private respondents are engaged in a family business. They purchase ready-mix concrete products from petitioner herein, PhilRock, Inc. Eto yung mga cemento, mga indoor & outdoor tiles, panels & stuff. 

So ang ganda ng usapan. The fuckin' thing was.. the concrete products delivered by the latter turned out to be of fuckin' substandard quality. E di syempre as a result the fuckin' structures built using such fuckin' cement developed fuckin' cracks and honey combs (honey comb anay.. gets?). 

So.. respondents, filed a complaint for damages against petitioner with the QC-RTC, which then issued an order dismissing the case and referring the same to CIAC.

Ang galeng no? The construction industry has its own arbitration commission. Pano kase madalas ang issue jan... 2 parties agree, signed the document.. pag delivery na and inspect mo substandard material pala.  Laging gulangan kasi jan. So good thing there's arbitration.. isipin mo nga naman, simpleng bagay lang ang pinagaawayan padadaanen mo pa ba sa korte yan, they will just clog the court dockets kung magkakasuhan ng magkakasuhan tong mga to. 

So the spouses and petitioner had filed an Agreement to Arbitrate. 

Now take note.. Since no common ground can be reached by the parties, they requested the case be remanded back again to the court, to which it had declared it no longer had jurisdiction over the case and ordered the records of the case to be remanded back again to CIAC. 

Hahaha.,. pasahan ng bola... "ikaw na shmoot!!" "de kaw na!!" LOL. At least walang bakaw.. 

Petitioner contended the supposed jurisdiction of CIAC

E di syempre CIAC rendered a decision in favor of the spouses. LOL  Tinatalo nyo kame ah.. teka

Thus, petitioner PhilRock filed a Petition for Review before the CA, to which the latter dismissed. Hence this petition for certiorari.

ISSUE:

Could CIAC take jurisdiction over the case of respondent spouses and petitioner after it had been dismissed by both the RTC and CIAC?

RULING:

Court said Petition has no merit.

Section 4 of EO 1008 expressly vests in the CIAC original and exclusive jurisdiction over disputes arising from or connected with construction contracts entered into by parties that have agreed to submit their disputes to voluntary arbitration. 

Further, petitioner continued participating in the arbitration even after the CIAC order has been issued as evidenced by their concluding and signing of the Terms of Reference. 

Onga naman... if you're questioning something you don't agree with.. why step forward and be part of it?.. Qequestion mo tapos sasali ka tas pagnatalo ka babalik ka sa question mo.. duh

The Court said it will not countenance any effort of any party to subvert or defeat the objective of voluntary arbitration for its own private motives. Petitioner is stopped from assailing the jurisdiction of the CIAC, merely because the latter rendered an adverse decision.

So.. the spouses won this case.