PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK (now BANCO DE ORO-EPCI, INC.) v. DENNIS CUSTODIO, et al. 545 SCRA 367 (2008)
A corporation has personality separate and district from those who compose it.
Rolando Francisco (Francisco) and his wife, on behalf of Traders Group Corporation (ROL-ED), entered into a Foreign Bills Purchase Line Agreement (FBPLA) with the PCIB-Greenhills bank to which Spouses Francisco deposited four dollar checks. The checks were cleared and paid by Chase Manhattan Bank but they were subsequently dishonored for insufficient funds. Chase Manhattan Bank thus debited the amount of the dishonored checks from the account of PCIB-Greenhills which it maintained with it. Having received notice of the debiting from its account, PCIB-Greenhills in turn debited from Francisco’s joint account the partial payment of the dishonored checks. In the meantime, Wilfredo Gliane remitted US$42,300 to the above-said joint account of Francisco at the PCIB-Greenhills but it was no longer feasible as the amount had already been applied as partial payment of Francisco’s outstanding obligation with PCIB-Greenhills. A complaint against PCIB and Francisco for specific performance and damages was subsequently filed before the Regional Trial Court (RTC) of Makati to recover the remittance. The RTC held PCIB solely liable to pay the sum of US$42,300 and decreed that PCIB had the right of reimbursement of the amount from Francisco. On appeal, the Court of Appeals freed PCIB from liability and ruled that Francisco is solely liable thereof. Hence, this petition. Francisco contends that he has a separate personality from ROL-ED.
Whether or not the separate and distinct legal personality of Francisco from ROL-ED be considered in determining his liability.
While Francisco claims that the loan in question was that of ROL-ED and not his, he, as earlier stated, deposited the US$651,000 checks in his joint account with Erlinda and not in the account of ROL-ED. At all events, while a corporation is clothed with a personality separate and distinct from the persons composing it, the veil of separate corporate personality may be lifted when it is used as a shield to confuse legitimate issues, or where lifting the veil is necessary to achieve equity or for the protection of the creditors. In the case at bar, there can be no mistake that Francisco belatedly invoked the separate identity of ROL-ED to evade his liability to PCIB.