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    GENERAL CREDIT CORP v. ALDEVINCO

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    Jued Cisneros
    The Supreme Court upheld the doctrine of piercing the corporate veil in alter ego cases and the decision finding General Credit Corp. and CCC Equity jointly and severally liable to Alsons. The Court ruled that General Credit Corp.'s petition was merely a motion for reconsideration in disguise, which is prohibited. It also found that the elements for piercing the corporate veil were satisfied in the previous case, as CCC Equity was under the complete domination and control of General Credit Corp. with respect to the transaction in question.

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    GENERAL CREDIT CORP v. ALDEVINCO

    Uploaded by

    Jued Cisneros
    80 views2 pages
    The Supreme Court upheld the doctrine of piercing the corporate veil in alter ego cases and the decision finding General Credit Corp. and CCC Equity jointly and severally liable to Alsons. The Court ruled that General Credit Corp.'s petition was merely a motion for reconsideration in disguise, which is prohibited. It also found that the elements for piercing the corporate veil were satisfied in the previous case, as CCC Equity was under the complete domination and control of General Credit Corp. with respect to the transaction in question.

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    The Supreme Court upheld the doctrine of piercing the corporate veil in alter ego cases and the decision finding General Credit Corp. and CCC Equity jointly and severally liable to Alsons. The Court ruled that General Credit Corp.'s petition was merely a motion for reconsideration in disguise, which is prohibited. It also found that the elements for piercing the corporate veil were satisfied in the previous case, as CCC Equity was under the complete domination and control of General Credit Corp. with respect to the transaction in question.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    80 views2 pages

    GENERAL CREDIT CORP v. ALDEVINCO

    Uploaded by

    Jued Cisneros
    The Supreme Court upheld the doctrine of piercing the corporate veil in alter ego cases and the decision finding General Credit Corp. and CCC Equity jointly and severally liable to Alsons. The Court ruled that General Credit Corp.'s petition was merely a motion for reconsideration in disguise, which is prohibited. It also found that the elements for piercing the corporate veil were satisfied in the previous case, as CCC Equity was under the complete domination and control of General Credit Corp. with respect to the transaction in question.

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    © All Rights Reserved
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    GENERAL CREDIT CORP. V.

    ALDEVINCO

    TOPIC:

    FACTS:
     Shortly after its incorporation in 1957, the petitioner established Commercial Credit Corporation
    (CCC) franchise companies in different urban centers of the country. It organized CCC Equity to
    take over the operations and management of the various CCC franchise companies.
     Meanwhile, Alsons, as well as Conrado, Nicasio, Editha and Ladislawa, all surnamed Alcantara,
    and Alfredo de Borja (collectively, the Alcantara Family) each owned shares in the CCC franchise
    companies
     In December 1980, Alsons and the Alcantara Family sold their shares in the CCC franchise
    companies to CCC Equity.
     CCC Equity issued to Alsons and the Alcantara Family a "bearer" promissory note with a one-year
    maturity date at 18% per annum, with provision for damages and litigation costs in case of default.
    The Alcantara Family later assigned to Alsons their rights and interests through the bearer note
    executed
     Alsons sued the petitioner and CCC Equity in the Regional Trial Court in Makati (RTC). The
    petitioner was impleaded as a party-defendant under the doctrine of piercing the veil of corporate
    fiction considering that CCC Equity was organized as a tool and mere conduit of the petitioner
    after failure to collect on the bearer of the note.
     RTC found CCC Equity to be the mere instrumentality or adjunct of the petitioner, rendered
    judgment declaring CCC Equity and the petitioner liable to jointly and severally pay to Alsons the
    principal sum of the amount of the promissory note for the payment of sold shares with liquidated
    damages and atty’s fees
     CA affirmed RTC

    ISSUE: W/N doctrince of PCV in alter ego cases be upheld or modified in light of the ruling of 1st Division
    of SC holding petitioners solidarily liable with CCC Equity Corporation (Alsons) the money judgment in
    favor of Alsons (personal capacities).

    HELD/RATIO: DECISION MUST BE UPHELD. Petition has been categorized as another MR which is
    prohibited. Hence, Prior decision is upheld.
     The petitioner argues that the decision in G.R. No. 154975 introduced a "new doctrine" to the
    effect that piercing the veil of corporate fiction in alter ego cases is permissible despite the
    absence of the required elements for its application; that the elements for piercing the veil of
    corporate fiction in alter ego cases are as follows:
    o Control not mere majority or complete stock control, but complete domination, not only
    of nances but of policy and business practice in respect to the transaction attacked so that
    the corporate entity as to this transaction had at the time no separate mind, will or
    existence of its own
    o Such control must have been used by the defendant to commit fraud or wrong, in
    contravention of plaintiff's legal rights; and
    o The aforesaid control and breach of duty must proximately cause the injury or unjust loss
    complained of
     First Division, in ruling that the petitioner and CCC Equity were jointly and severally liable to
    Alsons, pierced its corporate veil despite the absence any of the elements for its application; and
    that a determination should be made on whether the doctrine or principle of law laid down in
    previous cases regarding the application of the alter ego rule should be maintained, modified or
    reversed in light of the decision promulgated

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