Republic of the Philippines

SUPREME COURT
Manila

EN BANC 2

G.R. No. L-15121             August 31, 1962

GREGORIO PALACIO, in his own behalf and in behalf of his minor child,
MARIO PALACIO, plaintiffs-appellants,
vs.
FELY TRANSPORTATION COMPANY, defendant-appellee.

Antonio A. Saba for plaintiffs-appellants.

Mercado, Ver and Reyes for defendant-appellee.

REGALA, J.:

This is an appeal by the plaintiffs from the decision of the Court of First Instance of Manila
which dismissed their complaint.

Originally taken to the Court of Appeals, this appeal was certified to this Court on the ground
that it raises purely questions of law.

The parties in this case adopt the following findings of fact of the lower court:

In their complaint filed with this Court on May 15, 1954, plaintiffs allege, among other
things, "that about December, 1952, the defendant company hired Alfredo Carillo as
driver of AC-787 (687) (a registration for 1952) owned and operated by the said
defendant company; that on December 24, 1952, at about 11:30 a.m., while the driver
Alfonso (Alfredo) Carillo was driving AC-687 at Halcon Street, Quezon City, wilfully,
unlawfully and feloniously and in a negligent, reckless and imprudent manner, run over a
child Mario Palacio of the herein plaintiff Gregorio Palacio; that on account of the
aforesaid injuries, Mario Palacio suffered a simple fracture of the right tenor (sic),
complete third, thereby hospitalizing him at the Philippine Orthopedic Hospital from
December 24, 1952, up to January 8, 1953, and continued to be treated for a period of
five months thereafter; that the plaintiff Gregorio Palacio herein is a welder by
occupation and owner of a small welding shop and because of the injuries of his child he
has abandoned his shop where he derives income of P10.00 a day for the support of his
big family; that during the period that the plaintiff's (Gregorio Palacio's) child was in the
hospital and who said child was under treatment for five months in order to meet the
needs of his big family, he was forced to sell one air compressor (heavy duty) and one
heavy duty electric drill, for a sacrifice sale of P150.00 which could easily sell at
P350.00; that as a consequence of the negligent and reckless act of the driver Alfredo
Carillo of the herein defendant company, the herein plaintiffs were forced to litigate this
case in Court for an agreed amount of P300.00 for attorney's fee; that the herein plaintiffs
have now incurred the amount of P500.00 actual expenses for transportation,
representation and similar expenses for gathering evidence and witnesses; and that
because of the nature of the injuries of plaintiff Mario Palacio and the fear that the child
might become a useless invalid, the herein plaintiff Gregorio Palacio has suffered moral
damages which could be conservatively estimated at P1,200.00.

On May 23, 1956, defendant Fely Transportation Co., filed a Motion to Dismiss on the
grounds (1) that there is no cause of action against the defendant company, and (2) that
the cause of action is barred by prior judgment..

In its Order, dated June 8, 1956, this Court deferred the determination of the grounds
alleged in the Motion to Dismiss until the trial of this case.

On June 20, 1956, defendant filed its answer. By way of affirmative defenses, it alleges
(1) that complaint states no cause of action against defendant, and (2) that the sale and
transfer of the jeep AC-687 by Isabelo Calingasan to the Fely Transportation was made
on December 24, 1955, long after the driver Alfredo Carillo of said jeep had been
convicted and had served his sentence in Criminal Case No. Q-1084 of the Court of First
Instance of Quezon City, in which both the civil and criminal cases were simultaneously
tried by agreement of the parties in said case. In the Counterclaim of the Answer,
defendant alleges that in view of the filing of this complaint which is a clearly unfounded
civil action merely to harass the defendant, it was compelled to engage the services of a
lawyer for an agreed amount of P500.00.

During the trial, plaintiffs presented the transcript of the stenographic notes of the trial of
the case of "People of the Philippines vs. Alfredo Carillo, Criminal Case No. Q-1084," in
the Court of First Instance of Rizal, Quezon City (Branch IV), as Exhibit
"A".1äwphï1.ñët

It appears from Exhibit "A" that Gregorio Palacio, one of the herein plaintiffs, testified
that Mario Palacio, the other plaintiff, is his son; that as a result of the reckless driving of
accused Alfredo Carillo, his child Mario was injured and hospitalized from December 24,
1952, to January 8, 1953; that during all the time that his child was in the hospital, he
watched him during the night and his wife during the day; that during that period of time
he could not work as he slept during the day; that before his child was injured, he used to
earn P10.00 a day on ordinary days and on Sundays from P20 to P50 a Sunday; that to
meet his expenses he had to sell his compressor and electric drill for P150 only; and that
they could have been sold for P300 at the lowest price.

During the trial of the criminal case against the driver of the jeep in the Court of First
Instance of Quezon City (Criminal Case No. Q-1084) an attempt was unsuccessfully
made by the prosecution to prove moral damages allegedly suffered by herein plaintiff
Gregorio Palacio. Likewise an attempt was made in vain by the private prosecutor in that
case to prove the agreed attorney's fees between him and plaintiff Gregorio Palacio and
the expenses allegedly incurred by the herein plaintiffs in connection with that case.
 During the trial of this case, plaintiff Gregorio Palacio testified substantially to the same
facts.

The Court of First Instance of Quezon City in its decision in Criminal Case No. 1084
(Exhibit "2") determined and thoroughly discussed the civil liability of the accused in that
case. The dispositive part thereof reads as follows:

IN VIEW OF THE FOREGOING, the Court finds the accused Alfredo Carillo y Damaso
guilty beyond reasonable doubt of the crime charged in the information and he is hereby
sentenced to suffer imprisonment for a period of Two Months & One Day of Arresto
Mayor; to indemnify the offended party, by way of consequential damages, in the sum of
P500.00 which the Court deems reasonable; with subsidiary imprisonment in case of
insolvency but not to exceed ¹/3 of the principal penalty imposed; and to pay the costs.

On the basis of these facts, the lower court held action is barred by the judgment in the criminal
case and, that under Article 103 of the Revised Penal Code, the person subsidiarily liable to pay
damages is Isabel Calingasan, the employer, and not the defendant corporation.

Against that decision the plaintiffs appealed, contending that:

THE LOWER COURT ERRED IN NOT SUSTAINING THAT THE DEFENDANT-

APPELLEE IS SUBSIDIARILY LIABLE FOR DAMAGES AS A RESULT OF
CRIMINAL CASE NO. Q-1084 OF THE COURT OF FIRST INSTANCE OF QUEZON
CITY FOR THE REASON THAT THE INCORPORATORS OF THE FELY
TRANSPORTATION COMPANY, THE DEFENDANT-APPELLEE HEREIN, ARE
ISABELO CALINGASAN HIMSELF, HIS SON AND DAUGHTERS;

THE LOWER COURT ERRED IN NOT CONSIDERING THAT THE INTENTION OF

ISABELO CALINGASAN IN INCORPORATING THE FELY TRANSPORTATION
COMPANY, THE DEFENDANT-APPELLEE HEREIN, WAS TO EVADE HIS CIVIL
LIABILITY AS A RESULT OF THE CONVICTION OF HIS DRIVER OF VEHICLE
AC-687 THEN OWNED BY HIM:

THE LOWER COURT ERRED IN HOLDING THAT THE CAUSE OF ACTION OF

THE PLAINTIFFS-APPELLANTS IS BARRED BY PRIOR JUDGMENT.

With respect to the first and second assignments of errors, plaintiffs contend that the defendant
corporate should be made subsidiarily liable for damages in the criminal case because the sale to
it of the jeep in question, after the conviction of Alfred Carillo in Criminal Case No. Q-1084 of
the Court of First Instance of Quezon City was merely an attempt on the part of Isabelo
Calingasan its president and general manager, to evade his subsidiary civil liability.

The Court agrees with this contention of the plaintiffs. Isabelo Calingasan and defendant Fely
Transportation may be regarded as one and the same person. It is evident that Isabelo
Calingasan's main purpose in forming the corporation was to evade his subsidiary civil liability 1
resulting from the conviction of his driver, Alfredo Carillo. This conclusion is borne out by the
fact that the incorporators of the Fely Transportation are Isabelo Calingasan, his wife, his son,
Dr. Calingasan, and his two daughters. We believe that this is one case where the defendant
corporation should not be heard to say that it has a personality separate and distinct from its
members when to allow it to do so would be to sanction the use of the fiction of corporate entity
as a shield to further an end subversive of justice. (La Campana Coffee Factory, et al. v.
Kaisahan ng mga Manggagawa, etc., et al., G.R. No. L-5677, May 25, 1953) Furthermore, the
failure of the defendant corporation to prove that it has other property than the jeep (AC-687)
strengthens the conviction that its formation was for the purpose above indicated.

And while it is true that Isabelo Calingasan is not a party in this case, yet, is held in the case of
Alonso v. Villamor, 16 Phil. 315, this Court can substitute him in place of the defendant
corporation as to the real party in interest. This is so in order to avoid multiplicity of suits and
thereby save the parties unnecessary expenses and delay. (Sec. 2, Rule 17, Rules of Court;
Cuyugan v. Dizon. 79 Phil. 80; Quison v. Salud, 12 Phil. 109.)

Accordingly, defendants Fely Transportation and Isabelo Calingasan should be held subsidiarily
liable for P500.00 which Alfredo Carillo was ordered to pay in the criminal case and which
amount he could not pay on account of insolvency.

We also sustain plaintiffs' third assignment of error and hold that the present action is not barred
by the judgment of the Court of First Instance of Quezon City in the criminal case. While there
seems to be some confusion on part of the plaintiffs as to the theory on which the is based —
whether ex-delito or quasi ex-delito (culpa aquiliana) — We are convinced, from the discussion
prayer in the brief on appeal, that they are insisting the subsidiary civil liability of the defendant.
As a matter of fact, the record shows that plaintiffs merely presented the transcript of the
stenographic notes (Exhibit "A") taken at the hearing of the criminal case, which Gregorio
Palacio corroborated, in support of their claim for damages. This rules out the defense of res
judicata, because such liability proceeds precisely from the judgment in the criminal action,
where the accused was found guilty and ordered to pay an indemnity in the sum P500.00.

WHEREFORE, the decision of the lower court is hereby reversed and defendants Fely
Transportation and Isabelo Calingasan are ordered to pay, jointly and severally, the plaintiffs the
amount of P500.00 and the costs.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes, Dizon and
Makalintal, concur.
Reyes, J.B.L., J., took no part.
Summaries: Villa Rey Transit vs. Ferrer (GR
L-23893, 29 October 1968) 6
Villa Rey Transit vs. Ferrer
[GR L-23893, 29 October 1968]
En Banc, Angeles (J): 6 concur, 2 took no part, 1 on leave

Facts: [preceding case] Prior to 1959, Jose M. Villarama was an operator of a bus transportation, under the
business name of Villa Rey Transit, pursuant to certificates of public convenience granted him by the Public Service
Commission (PSC) in Cases 44213 and 104651, which authorized him to operate a total of 32 units on various
routes or lines from Pangasinan to Manila, and vice-versa. On 8 January 1959, he sold the two certificates of public
convenience to the Pangasinan Transportation Company, Inc. (Pantranco), for P350,000.00 with the condition,
among others, that the seller (Villarama) "shall not for a period of 10 years from the date of this sale, apply for any
TPU service identical or competing with the buyer." Barely 3 months thereafter, or on 6 March 1959: a corporation
called Villa Rey Transit, Inc. (the Corporation) was organized with a capital stock of P500,000.00 divided into 5,000
shares of the par value of P100.00 each; P200,000.00 was the subscribed stock; Natividad R. Villarama (wife of Jose
M. Villarama) was one of the incorporators, and she subscribed for P1,000.00; the balance of P199,000.00 was
subscribed by the brother and sister-in-law of Jose M. Villarama; of the subscribed capital stock, P105,000.00 was
paid to the treasurer of the corporation, who was Natividad R. Villarama. In less than a month after its registration
with the Securities and Exchange Commission (10 March 1959), the Corporation, on 7 April 1959, bought 5
certificates of public convenience, 49 buses, tools and equipment from one Valentin Fernando, for the sum of
P249,000.00, of which P100,000.00 was paid upon the signing of the contract; P50,000.00 was payable upon the
final approval of the sale by the PSC; P49,500.00 one year after the final approval of the sale; and the balance of
P50,000.00 "shall be paid by the BUYER to the different suppliers of the SELLER." The very same day that the
contract of sale was executed, the parties thereto immediately applied with the PSC for its approval, with a prayer
for the issuance of a provisional authority in favor of the vendee Corporation to operate the service therein involved.
On 19 May 1959, the PSC granted the provisional permit prayed for, upon the condition that "it may be modified or
revoked by the Commission at any time, shall be subject to whatever action that may be taken on the basic
application and shall be valid only during the pendency of said application." Before the PSC could take final action
on said application for approval of sale, however, the Sheriff of Manila, on 7 July 1959, levied on 2 of the five
certificates of public convenience involved therein, namely, those issued under PSC cases 59494 and 63780,
pursuant to a writ of execution issued by the Court of First Instance of Pangasinan in Civil Case 13798, in favor of
Eusebio E. Ferrer against Valentin Fernando. The Sheriff made and entered the levy in the records of the PSC. On
16 July 1959, a public sale was conducted by the Sheriff of the said two certificates of public convenience. Ferrer
was the highest bidder, and a certificate of sale was issued in his name. Thereafter, Ferrer sold the two certificates of
public convenience to Pantranco, and jointly submitted for approval their corresponding contract of sale to the PSC.
Pantranco therein prayed that it be authorized provisionally to operate the service involved in the said two
certificates. The applications for approval of sale, filed before the PSC, by Fernando and the Corporation, Case
124057, and that of Ferrer and Pantranco, Case 126278, were scheduled for a joint hearing. In the meantime, to wit,
on 22 July 1959, the PSC issued an order disposing that during the pendency of the cases and before a final
resolution on the aforesaid applications, the Pantranco shall be the one to operate provisionally the service under the
two certificates embraced in the contract between Ferrer and Pantranco. The Corporation took issue with this
particular ruling of the PSC and elevated the matter to the Supreme Court, which decreed, after deliberation, that
until the issue on the ownership of the disputed certificates shall have been finally settled by the proper court, the
Corporation should be the one to operate the lines provisionally.

[present case] On 4 November 1959, the Corporation filed in the Court of First Instance of
Manila, a complaint for the annulment of the sheriff's sale of the aforesaid two certificates of
public convenience (PSC Cases 59494 and 63780) in favor of Ferrer, and the subsequent sale
thereof by the latter to Pantranco, against Ferrer, Pantranco and the PSC. The Corporation prayed
therein that all the orders of the PSC relative to the parties' dispute over the said certificates be
annulled. The CFI of Manila declared the sheriff's sale of two certificates of public convenience
in favor of Ferrer and the subsequent sale thereof by the latter to Pantranco null and void;
declared the Corporation to be the lawful owner of the said certificates of public convenience;
and ordered Ferrer and Pantranco, jointly and severally, to pay the Corporation, the sum of
P5,000.00 as and for attorney's fees. The case against the PSC was dismissed. All parties
appealed.

Issue: Whether the stipulation, "SHALL NOT FOR A PERIOD OF 10 YEARS FROM THE
DATE OF THIS SALE, APPLY FOR ANY TPU SERVICE IDENTICAL OR COMPETING
WITH THE BUYER" in the contract between Villarama and Pantranco, binds the Corporation
(the Villa Rey Transit, Inc.).

Held: Villarama supplied the organization expenses and the assets of the Corporation, such as
trucks and equipment; there was no actual payment by the original subscribers of the amounts of
P95,000.00 and P100,000.00 as appearing in the books; Villarama made use of the money of the
Corporation and deposited them to his private accounts; and the Corporation paid his personal
accounts. Villarama himself admitted that he mingled the corporate funds with his own money.
These circumstances are strong persuasive evidence showing that Villarama has been too much
involved in the affairs of the Corporation to altogether negative the claim that he was only a part-
time general manager. They show beyond doubt that the Corporation is his alter ego. The
interference of Villarama in the complex affairs of the corporation, and particularly its finances,
are much too inconsistent with the ends and purposes of the Corporation law, which, precisely,
seeks to separate personal responsibilities from corporate undertakings. It is the very essence of
incorporation that the acts and conduct of the corporation be carried out in its own corporate
name because it has its own personality. The doctrine that a corporation is a legal entity distinct
and separate from the members and stockholders who compose it is recognized and respected in
all cases which are within reason and the law. When the fiction is urged as a means of
perpetrating a fraud or an illegal act or as a vehicle for the evasion of an existing obligation, the
circumvention of statutes, the achievement or perfection of a monopoly or generally the
perpetration of knavery or crime, the veil with which the law covers and isolates the corporation
from the members or stockholders who compose it will be lifted to allow for its consideration
merely as an aggregation of individuals. Hence, the Villa Rey Transit, Inc. is an alter ego of Jose
M. Villarama, and that the restrictive clause in the contract entered into by the latter and
Pantranco is also enforceable and binding against the said Corporation. For the rule is that a
seller or promisor may not make use of a corporate entity as a means of evading the obligation of
his covenant. Where the Corporation is substantially the alter ego of the covenantor to the
restrictive agreement, it can be enjoined from competing with the covenantee.

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative

Works 3.0 License
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION 5

G.R. No. 89879 April 20, 1990

JAIME PABALAN AND EDUARDO LAGDAMEO, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER AMBROSIO B.
SISON, ELIZABETH RODEROS, ET AL., and THE SHERIFF OF THE NATIONAL
LABOR RELATIONS COMMISSION, respondents.

Sofronio A. Larcia and Conrado Abriol Padilla for petitioners.

Apolinario N. Lomabao, Jr. for private respondents.

GANCAYCO, J.:

Once again the parameters of the liability of the officers of a corporation as to unpaid
wages and other claims of the employees of a corporation which has a separate and
distinct personality are brought to fore in this case.

On October 20, 1987, eighty-four (84) workers of the Philippine Inter-Fashion, Inc. (PIF)
filed a complaint against the latter for illegal transfer simultaneous with illegal dismissal
without justifiable cause and in violation of the provision of the Labor Code on security
of tenure as well as the provisions of Batas Pambansa Blg. 130. Complainants
demanded reinstatement with full backwages, living allowance, 13th month pay and
other benefits under existing laws and/or separation pay.

On October 21, 1987, PIF, through its General Manager, was notified about the
complaint and summons for the hearing set for November 6, 1987. The hearing was re-
set for November 27, 1987 for failure of respondents to appear. On November 30, 1987
respondents (petitioners herein) moved for the cancellation of the hearing scheduled on
November 6, 1987 so that they could engage a counsel to properly represent them
preferably on November 17, 1987.

On December 10, 1987 both parties were directed to submit their respective position
papers within ten (10) days. By mutual agreement the hearing was re-set on December
21, 1987 but on said date respondents and/or counsel failed to appear. The hearing
was re-set on January 14, 1988 on which date respondents were given a deadline to
submit their position paper.

On January 4, 1988 complainants filed their position paper. On January 14, 1988
counsel for respondents moved that he be given until January 22, 1988 to file their
position paper. The labor arbiter granted the motion. The PIF filed its position paper on
January 22, 1988. The heating for February 17, 1988 was re-set to March 9, 1988 and
on March 29, 1988 on which dates respondents failed to appear.

On May 5, 1988, with leave of the labor arbiter, complainants filed their supplemental
position paper impleading the petitioners as officers of the PIF in the complaint for their
illegal transfer to a new firm.

On July 13, 1988 a decision was rendered by the labor arbiter the dispositive part of
which reads as follows:

IN VIEW OF THE FOREGOING CONSIDERATION, respondent Philippine Inter-Fashion

and its officers Mr. Jaime Pabalan and Mr. Eduardo Lagdameo are hereby ordered to:

1. reinstate the sixty two (62) complainants to their former or equivalent position without
loss of seniority rights and privileges;

2. to pay, jointly and severally, their backwages and other benefits from the time they
were dismissed up to the time they are actually reinstated, the computation to be based
from the latest minimum wage law at the time of their dismissal. (See attached Annex "A"
of complainants' position paper.)

SO ORDERED. 1

Not satisfied therewith petitioners filed a motion for reconsideration in the First Division
of the public respondent, National Labor Relations Commission (NLRC), which
nevertheless, affirmed the appealed decision and dismissed the appeal for lack of merit
in a resolution dated June 30, 1989. Petitioners were ordered to pay the appeal fee in
accordance with law.

Hence the herein petition for certiorari with prayer for the issuance of a temporary
restraining order wherein the petitioners raised the following issues:

THE ARBITER AND THE NLRC DID NOT ACQUIRE JURISDICTION OVER THE
PERSONS OF THE PETITIONERS AND, THEREFORE, THE DECISION AND THE
RESOLUTION, UNDER DISPUTE, ARE NULL AND VOID.

THE DECISION AND THE NLRC RESOLUTION SUFFER FROM A LEGAL AND
CONSTITUTIONAL INFIRMITY BECAUSE THEY SANCTION A DEPRIVATION OF
PETITIONERS' PROPERTIES WITHOUT DUE PROCESS OF LAW.
 C

THE ARBITER AND THE NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN

ADJUDGING PETITIONERS HEREIN AS JOINTLY AND SEVERALLY LIABLE WITH
PHILIPPINE INTER-FASHION, INC. TO PAY THE JUDGMENT DEBT.

On September 25, 1989 this Court dismissed the petition for insufficiency in form and
substance, having failed to comply with the Rules of Court and Administrative Circular
No. 1-88 requiting the verification of the petition. A motion for reconsideration filed by
the petitioners of the said resolution was denied on October 16, 1989 for failure to raise
any substantial arguments to warrant a modification thereof. However, acting on an
urgent motion to include the motion for reconsideration of the resolution of September
25, 1989 in the court's calendar which the Court granted, on November 30, 1989 the
Court resolved to set aside said resolutions of September 25, 1989 and October 16,
1989, and to require respondents to comment thereon within ten (10) days from notice
thereof. A temporary restraining order was issued enjoining respondents from enforcing
or implementing the questioned decision of the labor arbiter affirmed by the NLRC upon
a bond to be filed by petitioners in the amount of P100,000.00. However, on February 7,
1990 for failure of petitioner to file the required bond despite extensions of time granted
them, the Court resolved to lift the temporary restraining order issued on November 13,
1989.

Now to the merit of the petition.

Petitioners do not question the merits of the decision insofar as PIF is concerned in this
proceeding. The first two issues they raised are to the effect that the public respondents never
acquired jurisdiction over them as they have not been served with summons and thus they were
deprived due process.

The Court finds these grounds to be devoid of merit. As the record shows while originally it was
PIF which was impleaded as respondent before the labor arbiter, petitioners also appeared in
their behalf through counsel. Thereafter when the supplemental position paper was filed by
complainants, petitioners were impleaded as respondents to which they filed an opposition
inasmuch as they filed their own supplemental position papers. They were therefore properly
served with summons and they were not deprived of due process.

Petitioners contend however that under the circumstances of the case as officers of the
corporation PIF they could not be jointly and severally held liable with the corporation for its
liability in this case.

The settled rule is that the corporation is vested by law with a personality separate and distinct
from the persons composing it, including its officers as well as from that of any other legal entity
to which it may be related. Thus, a company manager acting in good faith within the scope of
his authority in terminating the services of certain employees cannot be held personally liable for
damages. 2 Mere ownership by a single stockholder or by another corporation of all or nearly all
capital stocks of the corporation is not by itself sufficient ground for disregarding the separate
corporate personality. 3
As a general rule, officers of a corporation are not personally liable for their official acts unless it
is shown that they have exceeded their authority. 4 However, the legal fiction that a corporation
has a personality separate and distinct from stockholders and members may be disregarded as
follows:

This finding does not ignore the legal fiction that a corporation has a personality
separate and distinct from its stockholders and members, for, as this Court had
held "where the incorporators and directors belong to a single family, the
corporation and its members can be considered as one in order to avoid its being
used as an instrument to commit injustice," or to further an end subversive of
justice. In the case of Claparols vs. CIR involving almost similar facts as in this
case, it was also held that the shield of corporate fiction should be pierced when
it is deliberately and maliciously designed to evade financial obligations to
employees.

To the same effect . . . (are) this Court's rulings in still other cases:

When the notion of legal entity is used as a means to perpetrate fraud or an

illegal act or as a vehicle for the evasion of an existing obligation, the
circumvention of statutes, and or (to) confuse legitimate issues the veil which
protects the corporation will be lifted. 5

In this particular case complainants did not allege or show that petitioners, as officers of the
corporation deliberately and maliciously designed to evade the financial obligation of the
corporation to its employees, or used the transfer of the employees as a means to perpetrate an
illegal act or as a vehicle for the evasion of existing obligations, the circumvention of statutes, or
to confuse the legitimate issues.

Indeed, in the questioned resolution of the NLRC dated June 30, 1989 there is no finding as to
why petitioners were being held jointly and severally liable for the liability and obligation of the
corporation except as to invocation of the ruling of this Court in A.C. Ransom Labor Union-
CCLU vs. NLRC 6 in that the liability in the cases of illegal termination of employees extends not
only to the corporation as a corporate entity but also to its responsible officers acting in the
interest of the corporation or employer.

It must be noted, however, that A.C. Ransom Labor Union-CCLU vs. NLRC the corporation was
a family corporation and that during the strike the members of the family organized another
corporation which was the Rosario Industrial Corporation to which all the assets of the A.C.
Ransom Corporation were transferred to continue its business which acts of such officers and
agents of A.C. Ransom Corporation were intended to avoid payment of its obligations to its
employees. In such case this Court considered the president of the corporation to be personally
liable together with the corporation for the satisfaction of the claim of the employees. 7

Not one of the above circumstances has been shown to be present. Hence petitioners can not
be held jointly and severally liable with the PIF corporation under the questioned decision and
resolution of the public respondent.

WHEREFORE, the petition is GRANTED and the questioned resolution of the public respondent
dated June 30, 1989 is hereby modified by relieving petitioners of any liability as officers of the
PIF and holding that the liability shall be solely that of Philippine Inter-Fashion, Inc. No costs.
SO ORDERED.