PIERCING THE VEIL OF CORPORATE FICTION- When the fiction is used as a means of perpetrating a fraud

or an illegal act or as a vehicle for the evasion of an existing obligation, the circumvention of statutes,
the achievement or perfection of a monopoly or generally the perpetration of knavery or crime, the veil
with which the law covers and isolates the corporation from the members or stockholders who compose
it will be lifted to allow for its consideration merely as an aggregation of individuals.

SOURCE OF INCANTATION:

U.S v. MILWAUKEE REFRIGERATOR TRANSIT Co.,- A corporation is a legal entity but when that legal
entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will
regard the corporation as an association of persons.

SULDAO V. CIMECH SYSTEM CONSTRUCTION, INC.,- A Corporations authority to act and its liability for its
actions are separate and apart from the individuals who own it.

ROVELS ENTERPRISES, INC. V. OCAMPO-

OBJECTIVES AND EFFECT OF THE APPLICATION OF THE DOCTRINE:

TRADERS ROYAL BANK V. CA- The lending bank sought to pierce the veils of corporate fictions between a
parent corporation and its subsidiary to sustain its rightful claim on the securities that had been
assigned by the subsidiary without consideration to the lending bank in order to secure the loan
obligations of the parent corporation. The court refused the application of the piercing doctrine to
favour the lending bank when it was proven that the assignment of the securities was contrary to
existing rules of the then central bank of the Philippines, which were well known to the officers of the
lending bank. Petitioner cannot put up the excuse of piercing the veil of corporate entity as this is
merely an equitable remedy and may be awarded only in cases when the corporate fiction is used to
defeat public convenience, justify wrong, protect fraud or defend crime or where a corporation is a
mere alter ego or business conduit of a person.--- Piercing the veil of corporate entity requires the court
to see through the protective shroud which exempts its stockholders from liability that ordinarily, they
could be subject to, or distinguishes one corporation from a seemingly separate one, were it not for the
existing corporate fiction. But to do this, the court must be sure that the corporate fiction was misused,
to such an extent that injustice, fraud, or crime was committed upon another, disregarding, thus, his,
her, or its rights. It is the protection of the interest of innocent third persons dealing with the corporate
entity which the law aims to protect by this doctrine.

FRANCISCO MOTORS CORP. V. CA-

GENERAL CREDIT CORP. V. ALSONS DEV. AND INVESTMENT CORP-