16. Heirs of Ramon Durano, Sr. v.

Uy

FACTS:

Petitioner Durano III & wife brought an action for damages against Respondent Uy, etc. accusing them of
officiating a hate campaign against them by lodging complaints in the police for invasion of property, sending
complaints to the Office of the President depicting them as oppressors, landgrabbers& usurpers, which put them
into public contempt and ridicule. In their answer, respondents lodged affirmative defenses, demanded the return of
their property & made counterclaims for actual, moral & exemplary damages. They claim that in the first week of
August 1970, they received mimeographed notices signed by Durano, Sr. informing them that the land they were
tilling (128 ha), formerly owned by Cepco was purchased by Durano& Co, directing them to immediately turn over
the property. Even before they could vacate, Durano& Co. proceeded to bulldoze & destroy their property & fire
at air even. September 15, 1970 Durano& Co. sold the property to Durano III who proceeded to register the lands
in his name. They claim that they were deprived of their independent source of income, were made victims of
serious violence & demanded damages for cost of improvements on the land that were destroyed.
The Duranos moved for the dismissal of their complaint w/c the trial court granted w/o prejudice to the right of Uy,
etc. to maintain their counterclaim. The counterclaim was later upheld. This decision was affirmed by the CA.
Hence this petition.

ISSUE:

WON Durano can invoke the doctrine of separate corporate personality to evade liability for damages.

HELD:

No. In applying the instrumentality or alter ego doctrine, the courts are concerned w/ reality & not form, w/ how
the corp operated & the individual defendants relationship to that operation. Whether a corporation is a mere alter
ego is purely one of fact. Shortly after the sale by Cepco to Durano& Co., the latter sold the property to Durano
III, who immediately procured the registration of the property in his name. Obviously, Durano& Co. was used by
Durano III,etc. as an instrumentality to appropriate the disputed property for themselves.

Test to enable piercing of the veil, except in express agency, estoppel or direct tort:
a)Control, not mere majority or complete domination;
b) Such control must have been used by the defendant to commit fraud or wrong, etc.;
c)The aforesaid control & breach of duty must approximately cause the injury or unjust loss complained of.