This case involves a landowner (Petitioner) whose land was encroached by Our Lady's Foundation (OLFI). The Court ordered OLFI to reimburse the Petitioner but also issued garnishments against the bank accounts of OLFI's general manager, Arcilla-Maullon. The issue is whether Arcilla-Maullon can be held personally liable for OLFI's obligation. The Court ruled no, finding that under corporate law, a corporation is a separate legal entity from its officers and the obligation is OLFI's alone. For an officer to be held personally liable, the officer's bad faith must be clearly established, but here the general manager was not a party and no wrongdoing was shown.
This case involves a landowner (Petitioner) whose land was encroached by Our Lady's Foundation (OLFI). The Court ordered OLFI to reimburse the Petitioner but also issued garnishments against the bank accounts of OLFI's general manager, Arcilla-Maullon. The issue is whether Arcilla-Maullon can be held personally liable for OLFI's obligation. The Court ruled no, finding that under corporate law, a corporation is a separate legal entity from its officers and the obligation is OLFI's alone. For an officer to be held personally liable, the officer's bad faith must be clearly established, but here the general manager was not a party and no wrongdoing was shown.
This case involves a landowner (Petitioner) whose land was encroached by Our Lady's Foundation (OLFI). The Court ordered OLFI to reimburse the Petitioner but also issued garnishments against the bank accounts of OLFI's general manager, Arcilla-Maullon. The issue is whether Arcilla-Maullon can be held personally liable for OLFI's obligation. The Court ruled no, finding that under corporate law, a corporation is a separate legal entity from its officers and the obligation is OLFI's alone. For an officer to be held personally liable, the officer's bad faith must be clearly established, but here the general manager was not a party and no wrongdoing was shown.
This case involves a landowner (Petitioner) whose land was encroached by Our Lady's Foundation (OLFI). The Court ordered OLFI to reimburse the Petitioner but also issued garnishments against the bank accounts of OLFI's general manager, Arcilla-Maullon. The issue is whether Arcilla-Maullon can be held personally liable for OLFI's obligation. The Court ruled no, finding that under corporate law, a corporation is a separate legal entity from its officers and the obligation is OLFI's alone. For an officer to be held personally liable, the officer's bad faith must be clearly established, but here the general manager was not a party and no wrongdoing was shown.
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Mercy Vda.
De Roxas v. Our Lady's Foundation, Inc. G.R. No. 182378 March 6, 2013
Facts:
Petitioner owns a land and a portion of which was encroached. After examing the merits of the case, the Court ordered respondent, Our Lady’s Foundation (OLFI) to reimburse petitioner proportionate to the encroached area. The Court issued notices of garnishment against the bank accounts of Arcilla-Maullon, the general manager of OLFI.
Issue: Whether or not Arcilla-Maullon, being the general manager of OLFI, can be held personally liable for the obligation of the corporation, OLFI.
Ruling: No.
Under the doctrine of separate juridical personality of corporate entities, a corporation
is a juridical entity with a legal personality separate and distinct from those acting for and on its behalf and, in general, of the people comprising it. The obligation incurred by the corporation, acting through its officers such as this case, are its sole liabilities.
In order for the Court to hold the officer of the corporation personally liable alone for the debts of the corporation and thus pierce the veil of corporate fiction, the bad faith of the officer must first be established clearly and convincingly; it cannot be presumed.
In this case, since OLFI’s general manager was not a party to the case, he cannot be held personally liable for the obligation of the corporation. Petitioner also failed to include any submission pertaining to any wrongdoing of the general manager. Necessarily, it would be unjust to hold the latter personally liable and moreso, if the general manager was never impleaded as a party to the case.
