YUICHI YAMAMOTO v. NISHINO LEATHER INDUSTRIES, INC.

and IKUO NISHINO 551 SCRA 447

(2008)

To disregard the separate juridical personality of a corporation, the wrongdoing or

unjust act in contravention of a plaintiff�s legal rights must be clearly and
convincingly established. Also, without acceptance, a mere offer produces no
obligation.
Ryuichi Yamamoto and Ikuo Nishino agreed to enter into a joint venture wherein
Nishino would acquire such number of shares of stock equivalent to 70% of the
authorized capital stock of the corporation. However, Nishino and his brother
Yoshinobu Nishino acquired more than 70% of the authorized capital stock.
Negotiations subsequently ensued in light of a planned takeover by Nishino who
would buy-out the shares of stock of Yamamoto who was advised through a letter that
he may take all the equipment/ machinery he had contributed to the company (for his
own use and sale) provided that the value of such machines is deducted from the
capital contributions which will be paid to him. However, the letter requested that
he give his �comments on all the above, soonest�. On the basis of the said letter,
Yamamoto attempted to recover the machineries but Nishino hindered him to do so,
drawing him to file a Writ of Replevin. The Trial Court issued the writ. However,
on appeal, Nishino claimed that the properties being recovered were owned by the
corporation and the above-said letter was a mere proposal which was not yet
authorized by the Board of Directors. Thus, the Court of Appeals reversed the trial
court�s decision despite Yamamoto�s contention that the company is merely an
instrumentality of the Nishinos.

ISSUE:

Whether or not Yamamoto can recover the properties he contributed to the company in
view of the Doctrine of Piercing the Veil of Corporate Fiction and Doctrine of
Promissory Estoppel.

HELD:

One of the elements determinative of the applicability of the doctrine of piercing

the veil of corporate fiction is that control must have been used by the defendant
to commit fraud or wrong, to perpetuate the violation of a statutory or other
positive legal duty, or dishonest and unjust act in contravention of the
plaintiff�s legal rights. To disregard the separate juridical personality of a
corporation, the wrongdoing or unjust act in contravention of a plaintiff�s legal
rights must be clearly and convincingly established; it cannot be presumed. Without
a demonstration that any of the evils sought to be prevented by the doctrine is
present, it does not apply. Estoppel may arise from the making of a promise.
However, it bears noting that the letter was followed by a request for Yamamoto to
give his �comments on all the above, soonest.� What was thus proffered to Yamamoto
was not a promise, but a mere offer, subject to his acceptance. Without acceptance,
a mere offer produces no obligation. Thus, the machineries and equipment, which
comprised Yamamoto�s investment, remained part of the capital property of the
corporation.