Cabana, Adrian C.

Case Title : Jardine Davies Inc. vs JRB Realty

G.R No. 151438
July 15, 2005

Facts
Respondent – JRB Realty Inc. built a nine storey building named
Bianco Center at Makati City. At the 2nd floor of the building Bianco law Firm
which needed an airconditioning system. EVP Jose Bianco entered into a
contract with Pres. AG Morrison of the Aircon and Refrigeraion Industries
Inc. for two sets of FeddersAdaptomaticairconditioning equipment, later on,
the two aircon requested were delivered and installed. After the installation
of the 2 aircons, they found out that it was not working properly
Jose Bianco and Pres. Ag Morrison agreed to replace the units but
Aircon and Refrigeration Inc. could not specify the date when the delivery
will take place.
TempControl Systems, Inc. (a Subsidiary of Aircon) undertook the
maintenance of the units. Respondent learned that Maxim Industrial and
Merchandising Corporation was the new and exclusive licensee of Fedders Air
Conditioner.
Respondent – JRB requested that Maxim would honor the obligation of
Aircon, but the latter refused. Here comes now the case filed by respondent
against Maxim, Aircon and Refrigeration Inc. and Jardines for specific
performace.

Issue
Whether or not Jardine may be held responsible?
Ruling
No, the Supreme Court held that corporation is an artificial being
invested by law with a personality separate and distinct from its stockholders
and from other corporations to which it may be connected.
 The doctrine of piercing the veil of corporate fiction which applies only
when such corporate fiction is used to defeat public convenience, justify
wrong and protect fraud or defend crime . The rationale behind piercing a
corporation's identity is to remove the barrier between the corporation from
the persons comprising it to thwart the fraudulent and illegal schemes of
those who use the corporate personality as a shield for undertaking certain
proscribed activities
The records bear out that Aircon is a subsidiary of the petitioner only
because the latter acquired Aircon's majority of capital stock. It, however,
does not exercise complete control over Aircon; nowhere can it be gathered
that the petitioner manages the business affairs of Aircon. Indeed, no
management agreement exists between the petitioner and Aircon, and the
latter is an entirely different entity from the petitioner