LIABILITY OF CORPORATE OFFICERS; BAD FAITH

Doctrine:

The general rule is corporate officers are not held solidarily liable with the corporation
for corporate debts because the corporation is invested by law with a personality separate and
distinct from those persons composing it as well as from that of any other legal entity to which it
may be related. To hold a director or officer personally liable for corporate obligation is the
exception and it only occurs when the following requisites are present: (1) the complaint must
allege that the director or officer assented to the patently unlawful acts of the corporation, or that
the director or officer was guilty of gross negligence or bad faith; and (2) there must be proof
that the director or officer acted in bad faith

G.R. No. 208920, July 10, 2019

JAIME BILAN MONTEALEGRE AND CHAMON'TE, INC., PETITIONERS, v.

SPOUSES ABRAHAM AND REMEDIOS DE VERA, RESPONDENTS.

A Writ of Execution dated May 22, 2007 and the Alias Writ of Execution dated February 11,
2008 were issued and directed against the movable and immovable properties of both the
corporation and respondent Abraham pursuant to an adjudged case of illegal dismissal filed by
Jerson Servandil (Servandil) against A. De Vera Corporation (Corporation). Respondents
Abraham and Remedios De Vera sought to annul the said writs and subsequent orders and
resolutions of the LA and NLRC implementing said writs of execution against respondents'
property claiming that he was never impleaded as a party-respondent in the complaint for illegal
dismissal.

ISSUES:

1. Whether Servandil can make Abraham De Vera personally liable. (NO)

HELD:

No. The general rule is corporate officers are not held solidarily liable with the corporation for
corporate debts because the corporation is invested by law with a personality separate and
distinct from those persons composing it as well as from that of any other legal entity to which it
may be related. To hold a director or officer personally liable for corporate obligation is the
exception and it only occurs when the following requisites are present: (1) the complaint must
allege that the director or officer assented to the patently unlawful acts of the corporation, or that
the director or officer was guilty of gross negligence or bad faith; and (2) there must be proof
that the director or officer acted in bad faith.52

Here, the both requisites are wanting. Servandil's complaint failed to allege or impute bad faith
or malice on the part of respondent Abraham De Vera.
TOPIC:
Damages

DOCTRINE:
Moral damages are recoverable when the dismissal of an employee is attended by bad
faith or fraud or constitutes an act oppressive to labor or is done in a manner contrary to good
or public policy. Exemplary damages on the other hand, are recoverable when the dismissal
was done in wanton, oppressive, or malevolent manner.

BAYVIEW MANAGEMENT CONSULTANTS, INC., CHARLIE LAMB, FRANK GORDON,

ROSEMARIE MORADILLA, ET. AL vs. PEDRITA HELOISA B. PRE

G.R NO. 220170 AUGUST 19, 2020

FACTS:

Petitioner Charlie Lamb (Lamb) also known as Charlie Lin, hired Pre as legal officer for his
companies, known as CLAMB Group of Companies and are some of the in this case. Pre was
then assigned to Phil-Amer, and was promoted as corporate affairs, headed the human
resources and legal departments of CLAMB, particularly Bayview.

During Pre's employment,' petitioner Rosemane Mora (Moradilla), President of Phil-Amer and I
Bayview, discussed her new additional assignment as customer service representative (CSR),
which was assigned by her immediate superior, petitioner Frank Gordon (Gordon)- She was told
to answer phone calls and jot notes of her communications with clients.) Since the CSR task was
far from a managerial Job, Pre a different procedure, which elicited a negative reaction from
Gordon calling her stupid and incompetent.

Moradilla verbally advised Pre to resign. Pre informed Moradilla about the sexual harassment
case she filed to Gordon and that he might be retaliating. Moradilla set as she could not do
anything about it.

Pre filed a complaint for illegal dismissal against the petitioners. Then, she filed a motion to
dismiss without prejudice to file a new complaint. She then filed a complaint for constructive
illegal dismissal.

ISSUE:
Whether or not Pre is entitled of damages.

HELD:
Yes. Here, the Court found several instances of acts of disdain and hostile actions committed
against Pre, which degraded her dignity as and eventually led her to file a case for constructive
illegal dismissal.

Law and jurisprudence laid down the monetary awards that an illegally dismissed employee is
entitled to. First, the renumbered Article 294 7 of the Labor Codey formerly Article 279, states
that an illegally dismissed employee is entitled to backwages. Second, separation pay is
warranted when the for termination is not attributable to the employee's fault, such as those
provided in Articles 298 to 299 of the Labor Code, as well as in cases of illegal dismissal where
reinstatement is no longer feasible.

In addition, moral damages are recoverable when the dismissal of an employee is attended by
bad faith or fraud or constitutes an act oppressive to labor or is done in a manner contrary to
good or public policy. Exemplary damages on the other hand, are recoverable when the
dismissal was done in wanton, oppressive, or malevolent manner. Here, the demotion,
derogation and ill treatment that Pre suffered merits an award of moral damages.
TOPIC:
Damages

DOCTRINE:

Moral damages are recoverable when the dismissal of an employee is attended by bad faith or
fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals,
good customs or public policy. Exemplary damages, on the other hand, are recoverable when
the dismissal was done in a wanton, oppressive, or malevolent manner.

MONSANTO PHILIPPINES, INC., Petitioner, versus NATIONAL LABOR RELATION COMMISSION,

MARTIN B. GENEROSO JR., ORVILLE PAGONZAGA, ROEL
MORANO, ROEL T. MALINAO, FELMER Y. ESTANO, SHERWIN T. TABANAG, PONCIANO O.
LARANIO, ARIEL BALILI, JERIH M. JUNTA O, JR., and ANTONIO S. SISO,

G.R NO. 230609-10 AUGUST 27, 2020

FACTS:

Monsanto is a domestic corporation engaged IN agricultural business. To promote its products,

it entered into a service agreement with East Star, a domestic corporation engaged in providing
services with agricultural production, processing, packaging, warehousing, and distribution. It is
an accredited job contractor with the Department of Labor and Employment (DOLE).

Private respondents were agricultural crop technicians of East Star and were tasked to promote
Monsanto's products. Sometime in 2007, private respondents were told that their position and
function were redundant. Private respondents were unceremoniously transferred to East Star
to end their regular status in Monsanto. Their years of service in Monsanto were unrecognized
and they were of their hard-earned benefits On May 16, 2007, East Star formally terminated
their employment prompting private respondents to file a complaint against Monsanto, East
Star, and its corporate officers, Arnold Estrada and Teodorico Dereje, Jr; for illegal dismissal and
for damges

ISSUE:

Whether or not respondents are entitled to claim damages.

HELD:

Yes. The factual circumstances and evidence presented conclusion that Monsanto is the
employer of the private respondents. It hired private respondents way before entered into
service agreement with East Star. After reorganizing, Monsanto transferred private respondents
to East Star in violation of their right to security of tenure. As the real employer of private
respondents, it is liable for violation of labor laws.

Moral damages are recoverable when the dismissal of an employee is attended by bad faith or
fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals,
good customs or public policy. Exemplary damages, on the other hand, are recoverable when
the dismissal was done in a wanton, oppressive, or malevolent manner.

The Court agrees with the award of P15, 000.00 as moral damages and P15, 000 as exemplary
damages to each of the private respondents, but for a different reason. Private respondents
were unceremoniously transferred to East Star to end their regular status in Monsanto. Their
years of service in Monsanto were unrecognized and they were of their hard-earned benefits.
This is oppression to labor, and violate the principles of good morals, good customs, public
policy.
 The mere change in the corporate name is not considered under the law as
the creation of a new corporation. Hence, the renamed corporation remains liable
for the illegal dismissal of its employee separated under that guise.

G.R. No. 239433 September 16, 2020

BANTOGON vs PVC MASTER MFG. CORP.

FACTS: Bantogon was employed by Boatwin International Corporation as a helper. In less than a year,
he got promoted to machine operator. Boatwin changed its trade name to PVC. Later, petitioner was
prevented from reporting for work because of his participation in the illegal dismissal case of his brother
against PVC. When PVC learned of his participation in his brother's illegal dismissal case, it refused to
give him any further assignment which consequently equated to constructive termination. Bantogon
charged respondent with illegal dismissal alleging that PVC failed to observe the fundamental
requirements of due process in dismissing him. PVC disagreed and countered that it commenced
operations just a month before the alleged dismissal. It asserted that it is a separate and distinct entity
from Boatwin. It denied that petitioner was ever its employee.

ISSUE: WON petitioner is an employee of PVC.

HELD: Yes. Aside from a change of corporate name from Boatwin to PVC, there were no other changes
in PVC's circumstances indicating that the supposed assets sale took place, much less, that it truly had a
corporate existence distinct from that of Boatwin. To repeat, the so-called assets sale was never
established. Undoubtedly, PVC is the employer of petitioner. Hence, as petitioner's employer, it had the
burden to prove that petitioner's termination of employment was valid. This PVC failed to do. Here, it is
clearly proven that PVC constructively dismissed petitioner when it abruptly prevented him from
reporting for work without just or authorized cause. It failed to accord petitioner an opportunity to be
heard and defend himself which is a basic requirement of due process in the termination of
employment. PVC is, thus, guilty of illegal dismissal.