Mcconel vs CA

Facts: e Park Rite Co., Inc., a Philippine corporation, was originally organized on or about April 15,
1947, with a capital stock of 1,500 shares at P1.00 a share. The corporation leased from Rafael
Perez Rosales y Samanillo a vacant lot on Juan Luna street (Manila) which it used for parking motor
vehicles for a consideration. In operating its parking business, the corporation occupied and used
not only the Samanillo lot it had leased but also an adjacent lot belonging to the respondents-
appellees Padilla, without the owners' knowledge and consent. When the latter discovered the truth
around October of 1947, they demanded payment for the use and occupation of the lot.
The corporation disclaimed liability, blaming the original incorporators, McConnel, Rodriguez and
Cochrane. 
udgment was rendered in due course on 13 November 1947, ordering the Park Rite Co., Inc. to pay
P7,410.00 plus legal interest as damages
The judgment creditors then filed suit in the Court of First Instance of Manila against the corporation
and its past and present stockholders, to recover from them, jointly and severally, the unsatisfied
balance of the judgment, plus legal interest and costs. 

Issue: On the main issue whether the individual stockholders maybe held liable for obligations
contracted by the corporation,

Held:
There is no question that a wrong has been committed by the so-called Park Rite Co., Inc., upon the
plaintiffs when it occupied the lot of the latter without its prior knowledge and consent and without
paying the reasonable rentals for the occupation of said lot. There is also no doubt in our mind that
the corporation was a mere alter ego or business conduit of the defendants Cirilo Paredes and
Ursula Tolentino, and before them — the defendants M. McConnel, W. P. Cochrane, and Ricardo
Rodriguez. The evidence clearly shows that these persons completely dominated and controlled the
corporation and that the functions of the corporation were solely for their benefits.
When it was originally organized on or about April 15, 1947, the original incorporators were M.
McConnel, W. P. Cochrane, Ricardo Rodriguez, Benedicto M. Dario and Aurea Ordrecio with a
capital stock of P1,500.00 divided into 1,500 shares at P1.00 a share. McConnel and Cochrane each
owned 500 shares, Ricardo Rodriguez 408 shares, and Dario and Ordrecio 1 share each. It is
obvious that the shares of the last two named persons were merely qualifying shares.
 That the corporation was a mere extension of their personality is shown by the fact that the office of
Cirilo Paredes and that of Park Rite Co., Inc. were located in the same building, in the same floor
and in the same room — at 507 Wilson Building. This is further shown by the fact that the funds of
the corporation were kept by Cirilo Paredes in his own name (p. 14, November 8, 1950, T.S.N.) The
corporation itself had no visible assets, as correctly found by the trial court, except perhaps the toll
house, the wire fence around the lot and the signs thereon. It was for this reason that the judgment
against it could not be fully satisfied. (Emphasis supplied).

The facts thus found can not be varied by us, and conclusively show that the corporation is a mere
instrumentality of the individual stockholder's, hence the latter must individually answer for the
corporate obligations. While the mere ownership of all or nearly all of the capital stock of a
corporation is a mere business conduit of the stockholder, that conclusion is amply justified where it
is shown, as in the case before us, that the operations of the corporation were so merged with those
of the stockholders as to be practically indistinguishable from them. To hold the latter liable for the
corporation's obligations is not to ignore the corporation's separate entity, but merely to apply the
established principle that such entity can not be invoked or used for purposes that could not have
been intended by the law that created that separate personality.
Tan Boon Bee vs Jarencio – PRINTER FOR WRIT OF EXECUTION
Facts: Petitioner Petitioner herein, doing business under the name and style of Anchor Supply Co.,
sold on credit to herein private respondent Graphic Publishing, Inc. (GRAPHIC for short) paper
products amounting to P55,214.73. On December 20, 1972, GRAPHIC made partial payment by
check to petitioner in the total amount of P24,848.74; and on December 21, 1972, a promissory note
was executed to cover the balance of P30,365.99. In the said promissory note, it was stipulated that
the amount will be paid on monthly installments and that failure to pay any installment would make
the amount immediately demandable with an interest of 12% per annum

e trial court ordered GRAPHIC to pay the petitioner the sum of P30,365.99 with 12% interest from
March 30, 1973 until fully paid, plus the costs of suit. On motion of petitioner, a writ of execution was
issued by respondent judge; but the aforestated writ having expired without the sheriff finding any
property of GRAPHIC, an alias writ of execution was issued on July 2, 1974.

Pursuant to the said issued alias writ of execution, the executing sheriff levied upon one (1) unit
printing machine Identified as "Original Heidelberg Cylinder Press" Type H 222, NR 78048, found in
the premises of GRAPHIC. In a Notice of Sale of Execution of Personal Property dated July 29,
1974, said printing machine

aid printing machine was scheduled for auction sale on July 26, 1974 at 10:00 o'clock at 14th St.,
Cor. Atlanta St., Port Area, Manila (lbid., p. 45); but in a letter dated July 19, 1974, herein private
respondent, Philippine American Drug Company (PADCO for short) had informed the sheriff that the
printing machine is its property and not that of GRAPHIC. the sheriff proceeded with the scheduled
auction sale, sold the property to the petitioner, it being the highest bidder, and issued a Certificate
of Sale in favor of petitioner 
Thereafter, on July 30,1974, PADCO filed with the Court of First Instance of Manila, Branch XXIII, a
Motion to Nullify Sale on Execution (With Injunction) (Ibid., pp, 49-55), which was opposed by the
petitioner (Ibid., pp. 5668). Respondent judge, in an Order dated March 26, 1975 (Ibid., pp. 64-69),
ruled in favor of PADCO

ISSUE: WON PADCO WAS CONVENIENTLY SHIELDING UNDER THE THEORY OF

HELD:
In the instant case, petitioner's evidence established that PADCO was never engaged in the printing
business; that the board of directors and the officers of GRAPHIC and PADCO were the same; and
that PADCO holds 50% share of stock of GRAPHIC. Petitioner likewise stressed that PADCO's own
evidence shows that the printing machine in question had been in the premises of GRAPHIC since
May, 1965, long before PADCO even acquired its alleged title on July 11, 1966 from Capitol
Publishing. That the said machine was allegedly leased by PADCO to GRAPHIC on January 24,
1966, even before PADCO purchased it from Capital Publishing on July 11, 1966, only serves to
show that PADCO's claim of ownership over the printing machine is not only farce and sham but
also unbelievable.
Cease vs CA

FACTS:

Won: Second, that the issue of ownership had been raised in the lower court when Tiaong Milling asserted
title over the properties registered in its corporate name adverse to Forrest L. Cease or his estate, and that the said
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issue was erroneously disposed of by the trial court in the partition proceedings when
reposing ownership to the estate of Forrest L. Cease, the trial court indeed found strong
support, one that is based on a well-entrenched principle of law. In sustaining respondents' theory of "merger of
Forrest L. Cease and The Tiaong Milling as one personality", or that "the company is only the business conduit and
alter ego of the deceased Forrest L. Cease and the registered properties of Tiaong Milling are actually properties of
Forrest L. Cease and should be divided equally, share and share alike among his six children, ... ", the trial court did
aptly apply the familiar exception to the general rule by disregarding the legal fiction of distinct and separate
corporate personality and regarding the corporation and the individual member one and the same. In shredding the
fictitious corporate veil, the trial judge narrated the undisputed factual premise, thus: