MANUEL J. JIMENEZ, JR. v.

PEOPLE OF THE PHILIPPINES

G.R. Nos. 209195 and 209215, 17 September 2014, SECOND DIVISION,
(Brion, J.)

In a motion to discharge an accused to become a state witness, it is still the trial court that
determines whether the prosecution’s preliminary assessment of the accused-witness’ qualifications
satisfies the procedural norms. This is a symbiotic relationship as the trial court largely exercises its
prerogative based on the prosecutor’s findings and evaluation.

Manuel A. Montero confessed his participation in the killing of Ruby Rose

Barrameda naming Manuel J. Jimenez and several others as co-conspirators. His
statements detailed where the alleged steel casing containing the body of Ruby Rose
was dumped, led to the recovery of a cadaver near the place which he pointed.
Montero filed a motion for discharge as a state witness for the prosecution, to
which Jimenez opposed. The motion to discharge was granted by Judge Zaldy B.
Docena stating that the prosecution had presented clear, satisfactory and convincing
evidence showing compliance with the requisites of granting the said motion.

Jimenez opposed Judge Docena’s ruling averring that the Judge committed
grave abuse of discretion in granting the motion to discharge because: (1)the
requirements for granting a motion were not properly complied; (2)there is no
absolute necessity of the testimony of Montero; (3)Montero’s testimony do not
corroborate with the prosecution’s evidence; (4) and Montero is favored as a state
witness though he appears to be the most guilty.

ISSUE:

Did Judge Docena gravely abuse his discretion when he granted the motion
to discharge Montero as a state witness?

RULING:

No. Jurisprudence has defined “grave abuse of discretion” as the capricious

and whimsical exercise of judgment as where the power is exercised in an arbitrary
and despotic manner.To resolve a motion to discharge under Section 17, Rule 119
of the Revised Rules of Criminal Procedure, itonly require that that the testimony of
the accused sought to be discharged be substantially corroborated in its material
points, not on all points.A trial judge cannot be expected or required, at the start of
the trial, to inform himself with absolute certainty of everything that may develop in
the course of the trial with respect to the guilty participation of the accused. It is still
the trial court that determines whether the prosecution’s preliminary assessment of
the accused-witness’ qualifications to be a state witness satisfies the procedural
norms. This relationship is in reality a symbiotic one as the trial court, by the very
nature of its role in the administration of justice, largely exercises its prerogative
based on the prosecutor’s findings and evaluation.

UST Law Review, Vol. LIX, No. 1, May 2015

 “Most guilty” refers to the highest degree of culpability in terms of
participation in the commission of the offense and does not necessarily mean the
severity of the penalty imposed. What the rule avoids is the possibility that the most
guilty would be set free while his co-accused who are less guilty in terms of
participation would be penalized. Thus, as a rule, what are controlling are the
specific acts of the accused in relation to the crime committed. The Court draws
attention to the requirement that a state witness does not need to be found to be the
least guilty; he or she should not only “appear to be the most guilty.”

UST Law Review, Vol. LIX, No. 1, May 2015

 GERARDO LANUZA JR. AND ANTONIO O. OLBES v. BF
CORPORATION, et al.
G.R. NO. 174938, 1 October 2014, SECOND DIVISION, (LEONEN, J.)

In cases alleging solidary liability with the corporation or praying for the piercing of the
corporate veil, parties who are normally treated as distinct individuals should be made to participate
in the arbitration proceedings in order to determine if such distinction should indeed be disregarded
and, if so, to determine the extent of their liabilities.

BF Corporation entered into agreements with Shangri-La wherein it

undertook to construct for the latter a mall and a multilevel parking structure along
EDSA. Shangri-La had been consistent in paying BF Corporation until the former
started defaulting in payment.Despite repeated demands, Shangri-La refused to pay
the balance owed to the latter. BF Corporation filed a collection complaint against
Shangri-La and its Board of Directors including Gerardo Lanuza, Jr. and Antonio
O. Olbes, who were already resigned as members of Shangri-La’s board of directors.
BF Corporation alleged that the Board of Directors were in bad faith and they
should be held solidarily liable with Shangri-La for its obligations and the damages
that BF Corporation incurred as a result of Shangri-La’s default.

Shangri-La and the members of its Board of Directors filed a motion to

suspend the proceedings for failure of BF Corporation to submit the dispute to
arbitration. On appeal, the Court of Appeals ordered the submission of the dispute
to arbitration in accordance with the arbitration clause provided in their contract.
Lanuza and Olbers filed a comment praying that they be excluded from the
arbitration proceedings for being non-parties to Shangri-La’s and BF Corporation’s
agreement. The CA found them to be necessary parties in the arbitration
proceedings.

ISSUE:

Should Lanuza and Olbes be made parties to the arbitration proceedings,

pursuant to the arbitration clause provided in the contract between Shangri-La and
BF Corporation despite the fact that they are only third parties to it?

RULING:

Yes. As a general rule, a corporation’s representative who did not

personally bind himself or herself to an arbitration agreement cannot be forced to
participate in arbitration proceedings made pursuant to an agreement entered into
by the corporation. He or she is generally not considered a party to that agreement.
However, there are instances when the distinction between personalities of
directors, officers, and representatives, and of the corporation, are disregarded. The
Court calls this piercing the veil of corporate fiction.

UST Law Review, Vol. LIX, No. 1, May 2015

 Piercing the corporate veil is warranted when the separate personality of a
corporation 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, or to
confuse legitimate issues. It is also warranted in alter ego cases where a corporation
is merely a farce since it is a mere alter ego or business conduit of a person, or
where the corporation is so organized and controlled and its affairs are so
conducted as to make it merely an instrumentality, agency, conduit or adjunct of
another corporation. When corporate veil is pierced, the corporation and persons
who are normally treated as distinct from the corporation are treated as one person,
such that when the corporation is adjudged liable, these persons, too, become liable
as if they were the corporation.

UST Law Review, Vol. LIX, No. 1, May 2015