Separate juridical Personality
Kaimo Condominium Building Corporation v. Leverne Realty & Development
Corporation, [GRN. 259422 (Formerly UDK-17231)
Facts:
Kaimo Condominuim Building registered under the name of Edmundo F Kaimo has a
payment of tax delinquency as a result, Quezon City government sequestered the real
properties and placed them in public auction. Turn of events lead to the awarding of Final
Bill of Sale to Laverne as the highest winning bidder by the City Treasurer after the
nonaction made by the parties who have the legal interest of the sequestered real
properties. Consequently, Laverne filed a Petition for Confirmation of Final Bill of Sale and
Entry of New Certificate of Title before the Regional Trial Court. Thereafter, Laverne
undertook a series of actions to legally transfer the title of the property to its name.
One of the tenants of Kaimos Building, the PhilTust Bank filed an urgent motion to
Quash Writ of Possession and to Suspend the implementation of the Notice to Vacate. Also,
KCBC itself filed the motion to Declare Proceedings Void which yielded a positive outcome
from the court. Notwithstanding the positive legal outcome, Lavern's representative along
side with the security guards entered Kaimo's Building and ordered the tenant to vacate the
premises or enter a new lease agreement with Laverne. Because of the hostile action of the
latter, KCBC filed a Contempt Case at RTC QC. On the other hand, Kaimo had likewise filed
a case of Forcible Entry. As a defense, Laverne filed a Motion to Dismiss the simultaneous
complaint on the grounds of forum shopping.
The lower court decided in favor of Laverne and dismissed the motion filed by Kaimo
and KCBC on the grounds of forum shopping. The Contempt Case as well as the Forcible
Entry involved substantially the same parties and the same subject property and the relief
sought by the parties is the same. Accordingly, the separate entity of Kaimos as well as
KCBC is disregarded to determine if there were violations of law, rules or regulation.
Discontented by the outcome, Kaimo sought an appeal to CA which initially resulted in the
dismissal of the same ground. Relentless of their pursuits, Kaimo brought the case to the
Supreme Court with the following issue.
Issue:
A. Whether or not the Doctrine of Corporate veil was pierced when simultaneous
case of Forcible Entry and Contempt Case was filed to different court
B. Whether or not the simultaneous Cases of Forcible Entry and Contempt case filed
by Kaimos and KCBC Building constitutes forum shopping
Ruling:
A. The Supreme Court ruled in a negative standpoint. The corporate veil is only
peirced if , public convenience is defeated, corporate entity is used to perpetuate fraud,
evade obligation pr commit crimes or if it is an alter ego
B. No, as elucidated by the Supreme Court, Forum Shopping takes place when a
stockholder file a derivative suit in behalf of the corporation although there is already a
judgment on the matter from another court or if the stockholder seek to accomplish what the
corporation failed to do in the prior case as such, it used the fiction to circumvent the rule
against forum shopping or used to perpetuate fraud. In this case Kaimos complaint of
Forcible Entry is anchored on their claim as individual unit owners of their own respective
units in KCBC and such action does not affect nor involve the other unit owners of Kaimo
Building. In other words The Forcible Entry case filed is separate and distinct from the
contemptcased filed by KCBC, as a real party in interest.
It can be seen from this case that the separate corporate entity is undisturbed and
the piercing of the corporate veil cannot prosper. The complaint filed by Kaimos as unit
owner is distinct from the Contempt case filed by KCBC.
