Corpo Case Digest

COMPLEX ELECTRONICS EMPLOYEES ASSOCIATION VS. NLRC, ET AL

310 SCRA 403 (1999)

FACTS OF THE CASE

Complex informed its Lite-On personnel that a request from Lite on Philippines to lower their selling price by 10% was not feasible as they were already incurring losses at the present prices of their products. Under such circumstances, Complex regretfully informed the employees that it was left with no alternative but to close down the operations of the Lite-On Line. The Union, however, decried the decision and voted to declare a strike. Labor unrest within the company eventually ensued.

In the evening of April 6, 1992, the machinery, equipment and materials being used for production at Complex were pulled-out from the company premises and transferred to the premises of Ionics Circuit, Inc. at Cabuyao, Laguna.  The following day, a total closure of company operation was effected at Complex.

A complaint was, thereafter, filed with the Labor Arbitration Branch of the NLRC for unfair labor practice, illegal closure/illegal lockout, money claims for vacation leave, sick leave, unpaid wages, 13th month pay, damages and attorney's fees. Ionics was impleaded as a party defendant because the officers and management personnel of Complex were also holding office at Ionics with Lawrence Qua as the President of both companies.

Ionics contended that it was an entity separate and distinct from Complex and had been in existence since July 5, 1984 or eight (8) years before the labor dispute arose at Complex.  Like Complex, it was also engaged in the semi-conductor business where the machinery, equipment and materials were consigned to them by their customers.  While admitting that Lawrence Qua, the President of Complex was also the President of Ionics, the latter denied having Qua as their owner since he had no recorded subscription of P1,200,000.00 in Ionics as claimed by the Union.

ISSUE

Whether there is a clear ground to pierce the veil of corporate fiction and whether Lawrence Qua should be held liable for the alleged illegal transfer of machineries of Complex to Ionics.

RULING

It is settled that in the absence of malice or bad faith, a stockholder or an officer of a corporation cannot be made personally liable for corporate liabilities. The fact that the pull-out of the machinery, equipment and materials was effected during night-time is not per se an indicia of bad faith on the part of respondent Qua since he had no other recourse, and the same was dictated by the prevailing mood of unrest as the laborers were already vandalizing the equipment, bent on picketing the company premises and threats to lock out the company officers were being made.  Such acts of respondent qua were, in fact, made pursuant to the demands of Complex's customers who were already alarmed by the pending labor dispute and imminent strike to be stage by the labourers, to have their equipment, machinery and materials pull out of Complex.  As such, these acts were merely done pursuant to his official functions and were not, in any way, made with evident bad faith.

As to the juridical personality of the corporations, Ionics may be engaged in the same business as that of Complex, but this fact alone is not enough reason to pierce the veil of corporate fiction of the corporation.  Well-settled is the rule that a corporation has a personality separate and distinct from that of its officers and stockholders. Likewise, mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality.