Corpo Case Digest

PABALAN VS. NATIONAL LABOR RELATIONS COMMISSION

G.R.NO. 89879

FACTS OF THE CASE

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 Bldg. 130. Complainants demanded reinstatement with full back wages, living allowance, 13th month pay and other benefits under existing laws and/or separation pay.

A decision was rendered by the labor arbiter ordering respondent Philippine Inter-Fashion and its officers Mr. Jaime Pabalan and Mr. Eduardo Lagdameo to reinstate the sixty two (62) complainants to their former or equivalent position without loss of seniority rights and privileges and to pay, jointly and severally, their back wages and other benefits from the time they were dismissed up to the time they are actually reinstated.

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.

Hence, the herein petition for certiorari with prayer for the issuance of a temporary restraining order.

ISSUE

Whether or not petitioners herein may be held jointly and severally liable with Philippine Interfashion, Inc., to pay the judgment debt.

RULING

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.

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. However, the legal fiction that a corporation has a personality separate and distinct from stockholders and members may be disregarded as 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.

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.

Not one of the above circumstances has been shown to be present. Hence petitioners cannot 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 is 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.