CASE DIGEST: ROBLEDO, ET AL., vs. NLRC. G.R. No. 110358 November 9, 1994

FACTS:

Petitioners who are all Security Guards were the former employees of BSPA, a single proprietorship owned and managed by Felipe Bacani and his daughter Alicia served as its Executive Directress. In December 1989, BSPA ceased to operate. However, in October 1989, BASEC, which has the same line of business with the BSPA, and which Bacani’s were incorporators was organized and registered with SEC.

Most of the petitioners, after losing their jobs in BSPA, were employed in BASEC. In 1990, Felipe Bacani died and later in the same year petitioners filed a complaint with DOLE for claims of underpayment of wages and non-payment of overtime pay, legal holiday pay, separation pay and return of their cash bond against BSPA and BASEC.

ISSUE:

Whether BASEC may be held liable for the obligations of BSPA by piercing the veil of corporate entity.

RULING:

NO. BASEC cannot be held liable for the claims of the petitioners because it is an entity separate and distinct from that of BSPA. BSPA is a single proprietorship owned and operated by Felipe Bacani.

Hence, its debts and obligations were personal obligations of its owner. Petitioner’s contention that BASEC is created to avoid the obligations of BSPA and thus corporate veil must be pierced is without merit.

As the law provides, the doctrine may be used only whenever a court finds that the corporate fiction is being used to defeat public convenience, justify wrong, protect fraud, defend crime, or to confuse legitimate issues, or 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 or is being used as a mere alter ego. 

All of these are not present in this case.