G.R. No. 126554 – 388 Phil. 220 – 332 SCRA 427 – Mercantile Law – Corporation Law – Piercing the Veil of Corporate Fiction
In 1993, ARB Construction Co., Inc. (ARB) entered into a contract with TBS Security and Investigation Agency (TBS) for the latter to provide security guards to guard the premises of ARB. But in 1994, while the contract is still subsisting, ARB, through its Vice President for Operations Mark Molina, preterminated the contract because it alleged that the TBS guards were grossly negligent and inefficient. TBS opposed the same. ARB reconsidered but it removed all other TBS guards except for one. ARB, through Molina, also withheld payroll payments to TBS as it alleged that due to the negligence of the guards, the premises of ARB incurred losses through burglary that happened while the guards were on duty. TBS filed an injunction case against ARB. It later amended said complaint to include claims for damages against ARB as well as against Molina in his personal capacity as it was alleged that Molina concocted some of these facts.
ISSUE: Whether or not Molina should be impleaded.
HELD: No. It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. As a general rule, a corporation may not be made to answer for acts or liabilities of its stockholders or those of the legal entities to which it may be connected and vice versa. Molina can’t be held liable jointly and severally liable with ARB. There was no showing that he acted with bad faith. The salary deductions he made as vice president were not without basis; there was no malice on his part.
