CORP: Piercing Doctrine and Due Process

Jacinto v. CA
47 Clause
198 SCRA 211 June 6, 1991 Davide GOYO
Petitioner: Respondents:
Roberto A. Jacinto CA & Metropolitan Bank and Trust Company
(Metrobank)
Recit Ready Summary
Roberto Jacinto was held solidarily liable with Inland Industries, Inc. to Metrobank, for 380,000 pesos,
with interest and attorney’s fees. Inland Industries was considered by the RTC to be his alter ego,
because he was the President, General Manager, and owned 52% equity with his wife. He also was the
one who dealt with Metrobank entirely, by signing trust receipts. The CA affirmed the RTC.

Jacinto contends that the court was wrong for piercing the veil of corporate fiction, despite no allegation in
the complaint questioning the separate identity and existence of Inland Industries.

The issue is W/N the veil may be pierced despite the absence of any allegation in the complaint.
(YES)

In his stipulation of facts, he claimed to be both President and General Manager of Inland Industries.
However, in his direct testimony, he claimed that Catabas was the President and Heresa was Chairman
of the Board. The disparity places extreme doubt as to his credibility. There was no delimitation between
the personality of Jacinto as an individual and the personality of Inland Industries as a corporation.
Therefore, the veil of corporate fiction may be pierced. When the veil of corporate fiction is made as a
shield to perpetuate fraud and or confuse legitimate issues, it should be pierced.

While on the face of the complaint there is no specific allegation that the corporation is a mere alter ego of
Jacinto, subsequent developments, from the stipulation of facts up to the presentation of evidence and
the examination of witnesses, show that Metrobank sought to prove that Jacinto and Inland Industries,
Inc. are one. Jacinto did not object at any stage of the proceedings.

There is implied consent to the evidence presented when the adverse parties fail to object.

CLV Outline: There is no denial of due process to hold officers liable under the piercing doctrine, provided
that evidential basis has been adduced during trial to apply the piercing doctrine.
Facts
1. The RTC found that Jacinto was Inland Industries, Inc. Aside from admitting that he was both
President, General Manager, and substantial stockholder (52% with his wife), he was the one who
dealt entirely with Metrobank in transactions. Therefore, Roberto Jacinto and Inland Industries, Inc.
were held liable to Metrobank for 382,015.80 pesos, with 16% interest and attorney’s fees.
2. The CA affirmed the decision of RTC Manila.
3. Jacinto filed an appeal by certiorari.
Point/s of Contention
Jacinto faults the court for piercing the veil of corporate fiction despite the absence of any allegation in the
complaint questioning the separate identity and existence of Inland Industries, Inc.
Issues Ruling
1. Whether the veil of corporate fiction may be pierced despite the absence of any 1. YES
allegation in the complaint questioning the separate identity and existence of
Inland Industries, Inc.
Rationale
1. The veil may be pierced despite no allegation in the complaint.
In his stipulation of facts, he claimed that he was the President and General Manager, when he signed
the trust receipts BUT, in his direct testimony, he claimed that Bienvenida Catabas was the President,
while Aurora Heresa was Chairman of the Board. He also admitted to owning 52% equity with his wife.
These confliction statements placed in extreme doubt his credibility. There was no delimitation between

1
the personality of Jacinto as an individual and the personality of Inland Industries, Inc. as a corporation.
Therefore, the veil of corporate fiction may be pierced. When the veil of corporate fiction is made as a
shield to perpetuate fraud and or confuse legitimate issues, the same should be pierced.

While on the face of the complaint there is no specific allegation that the corporation is a mere alter ego of
Jacinto, subsequent developments, from the stipulation of facts up to the presentation of evidence and
the examination of witnesses, show that Metrobank sought to prove that Jacinto and Inland Industries,
Inc. are one. Jacinto did not object at any stage of the proceedings.

Section 5 of Rule 10 of the Rules of Court provides that when evidence is presented by one party, with
the express or implied consent of the adverse party, as to issues not alleged in the pleadings, judgment
may be rendered validly as regards those issues, which shall be considered as if they have been raised in
the pleadings. There is implied consent to the evidence thus presented when the adverse parties fail to
object.

CLV Outline: There is no denial of due process to hold officers liable under the piercing doctrine, provided
that evidential basis has been adduced during trial to apply the piercing doctrine.
Disposition
Petition DISMISSED.