Emilio Cano Enterprises, Inc. (ECE) was found guilty of illegal dismissal of an employee. ECE argued that the judgment could not be enforced against the corporation since Emilio and Rodolfo Cano were found personally liable in their roles as corporate officers, not the corporation itself. The court ruled that ECE was a closed family corporation, where the corporation and members could be considered as one. To ignore the legal fiction of separate corporate identity would subvert justice. The order was against Emilio and Rodolfo in their official capacities, representing the corporation. Enforcing the judgment directly against the corporation would not cause undue delay, contrary to the spirit of speedy labor case adjudications.
Emilio Cano Enterprises, Inc. (ECE) was found guilty of illegal dismissal of an employee. ECE argued that the judgment could not be enforced against the corporation since Emilio and Rodolfo Cano were found personally liable in their roles as corporate officers, not the corporation itself. The court ruled that ECE was a closed family corporation, where the corporation and members could be considered as one. To ignore the legal fiction of separate corporate identity would subvert justice. The order was against Emilio and Rodolfo in their official capacities, representing the corporation. Enforcing the judgment directly against the corporation would not cause undue delay, contrary to the spirit of speedy labor case adjudications.
Emilio Cano Enterprises, Inc. (ECE) was found guilty of illegal dismissal of an employee. ECE argued that the judgment could not be enforced against the corporation since Emilio and Rodolfo Cano were found personally liable in their roles as corporate officers, not the corporation itself. The court ruled that ECE was a closed family corporation, where the corporation and members could be considered as one. To ignore the legal fiction of separate corporate identity would subvert justice. The order was against Emilio and Rodolfo in their official capacities, representing the corporation. Enforcing the judgment directly against the corporation would not cause undue delay, contrary to the spirit of speedy labor case adjudications.
Emilio Cano Enterprises, Inc. (ECE) was found guilty of illegal dismissal of an employee. ECE argued that the judgment could not be enforced against the corporation since Emilio and Rodolfo Cano were found personally liable in their roles as corporate officers, not the corporation itself. The court ruled that ECE was a closed family corporation, where the corporation and members could be considered as one. To ignore the legal fiction of separate corporate identity would subvert justice. The order was against Emilio and Rodolfo in their official capacities, representing the corporation. Enforcing the judgment directly against the corporation would not cause undue delay, contrary to the spirit of speedy labor case adjudications.
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EMILIO CANO ENTERPRISES vs.
CIR G.R. No. L-20502
Februaury 26, 1965
effective against the property of the latter which was
not a party to the case?
FACTS:
RULING:
Emilio Cano Enterprises, Inc. (ECE) is a closed family
corporation where the incorporators and directors belong to one single family. Its incorporators are Emilio Cano, his wife Juliana, his sons Rodolfo and Carlos, and his daughter-in-law Ana D. Cano.
It is an undisputed rule that a corporation has a
personality separate and distinct from its members or stockholders because of a fiction of the law. However, ECC is a CLOSED FAMILY CORPORATION. Here is an instance where the corporation and its members can be considered as one.
A complaint for Illegal Dismissal was filed against it.
Emilio, Ariston and Rodolfo were made respondents in their capacity as president and proprietor, field supervisor and manager, respectively, of Emilio Cano Enterprises, Inc. EMILIO and RODOLFO were held guilty of the crime charged while ARISTON was absolved for insufficiency of evidence. EMILIO AND RODOLFO were ordered, jointly and severally, to reinstate Honorata Cruz, to her former position with payment of backwages. EMILIANO CANO died on November 14, 1958. The attempt to have the case against him dismissed failed, so it was elevated to the Court of Appeals which affirmed the decision of the trial court. An order of execution, directed against the properties of EC instead of those of the respondents named in the decision, was issued. ECE moved to quash the writ on the ground that the judgment sought to be enforced was not rendered against it which is a juridical entity separate and distinct from its officials. ISSUE: Can the judgment rendered against EMILIO and RODOLFO CANO in their capacity as officials of the corporation Emilio Cano Enterprises, Inc. be made
To hold such entity liable for the acts of its members
is not to ignore the legal fiction but merely to give meaning to the principle that such fiction cannot be invoked if its purpose is to use it as a shield to further an end subversive of justice. And so it has been held that while a corporation is a legal entity existing separate and apart from the persons composing it, that concept cannot be extended to a point beyond its reason and policy, and when invoked in support of an end subversive of this policy it should be disregarded by the courts. EMILIO AND RODOLFO CANO are here indicted, not in their private capacity, but as president and manager, respectively, of Emilio Cano Enterprises, Inc. Having been sued officially their connection with the case must be deemed to be impressed with the representation of the corporation. In fact, the court's order is for them to reinstate Honorata Cruz to her former position in the corporation and incidentally pay her the wages she had been deprived of during her separation. Verily, the order against them is in effect against the corporation. No benefit can be attained if this case were to be remanded to the court a quo merely in response to a technical substitution of parties for such would only cause an unwarranted delay that would work to Honorata's prejudice. This is contrary to the spirit of the law which enjoins a speedy adjudication of labor cases disregarding as much as possible the technicalities of procedure.
