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    Emilio Cano Enterprises v. CIR

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    Aaron James Puaso
    The Supreme Court ruled that a judgment against the president and manager of a corporation in their official capacities can be enforced against the corporation. The corporation, Emilio Cano Enterprises, Inc., argued it was not a party to the case but the Court rejected this claim. As a closed family corporation, the corporation and its members were not distinct entities and could not use the corporate fiction to avoid justice. Reinstating an employee, as ordered, affected the corporation itself. Therefore, the judgment was effectively against the corporation and the writ of execution was valid.

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    Emilio Cano Enterprises v. CIR

    Uploaded by

    Aaron James Puaso
    43 views1 page
    The Supreme Court ruled that a judgment against the president and manager of a corporation in their official capacities can be enforced against the corporation. The corporation, Emilio Cano Enterprises, Inc., argued it was not a party to the case but the Court rejected this claim. As a closed family corporation, the corporation and its members were not distinct entities and could not use the corporate fiction to avoid justice. Reinstating an employee, as ordered, affected the corporation itself. Therefore, the judgment was effectively against the corporation and the writ of execution was valid.

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    29. Emilio Cano Enterprises v. CIR

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    The Supreme Court ruled that a judgment against the president and manager of a corporation in their official capacities can be enforced against the corporation. The corporation, Emilio Cano Enterprises, Inc., argued it was not a party to the case but the Court rejected this claim. As a closed family corporation, the corporation and its members were not distinct entities and could not use the corporate fiction to avoid justice. Reinstating an employee, as ordered, affected the corporation itself. Therefore, the judgment was effectively against the corporation and the writ of execution was valid.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    43 views1 page

    Emilio Cano Enterprises v. CIR

    Uploaded by

    Aaron James Puaso
    The Supreme Court ruled that a judgment against the president and manager of a corporation in their official capacities can be enforced against the corporation. The corporation, Emilio Cano Enterprises, Inc., argued it was not a party to the case but the Court rejected this claim. As a closed family corporation, the corporation and its members were not distinct entities and could not use the corporate fiction to avoid justice. Reinstating an employee, as ordered, affected the corporation itself. Therefore, the judgment was effectively against the corporation and the writ of execution was valid.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Corporate Law (Due Process Clause Considerations in Piercing Cases)

    29. Emilio Cano Enterprises v. CIR (G.R. No. L-20502. February 26, 1965)

    KEY TAKE-AWAY OR DOCTRINE TO REMEMBER

    The legal fiction that a corporation has a personality separate and distinct from its members or stockholders cannot be invoked
    if its purpose is to use it as a shield to further an end subversive of justice, especially where the corporation is a closed family
    corporation. Where the defendants are sued not in their private capacity but as president and manager, respectively, of the
    corporation of which they were officers, their connection with the case must be deemed to be impressed with the representation
    of the corporation, and verily, the order against them is in effect against the corporation.

    FACTS

    A complaint for unfair labor practice was filed by the prosecutor against Emilio, Ariston, and Rodolfo (all surnamed Cano) in their
    capacity as President, Field Supervisor, and Manager, respectively, of Emilio Cano Enterprises, Inc (ECE). Judge Bautista found
    Emilio and Rodolfo guilty, but absolved Ariston for insufficiency of evidence. As a consequence, they were ordered to reinstate
    Honorate Cruz to her former position. Later, Emilio Cano died but the case against him was not dismissed. The case was appealed
    to SC which affirmed the decision.

    An order of execution was issued directing ECE to reinstate Cruz and to deposit with the court Cruz’s backwages. ECE filed a motion
    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. Motion and MR denied. Hence, this petition.

    ISSUE/S STATUTES/ARTICLES INVOLVED

    Can the judgment rendered against Emilio and Rodolfo Cano


    in their capacity as officials of the corporation Emilio Cano
    Enterprises, Inc. be made effective against the property of the
    latter which was not a party to the case?

    HELD: YES

    While 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, here we should not lose sight of the fact that the Emilio Cano Enterprises, Inc. is a closed family corporation
    where the incorporators and directors belong to one single family. Thus, the following are its incorporators: Emilio Cano, his wife
    Juliana, his sons Rodolfo and Carlos, and his daughter-in-law Ana D. Cano.

    Here is an instance where the corporation and its members can be considered as one. And 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.

    A factor that should not be overlooked is that 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.

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