G.R. No. 108734. May 29, 1996.
Concept Builders, Inc., petitioner, vs. The National Labor Relations Commission, (First Division); and Norberto Marabe, et al., respondents.

FACTS

Petitioner Concept Builders, Inc., a construction firm, terminated the employment of private respondents, its laborers and carpenters, in November 1981, claiming project completion. The Labor Arbiter found the dismissals illegal, as the project was unfinished and petitioner hired subcontractors to perform the same work. The decision ordering reinstatement and payment of back wages became final. Execution was partially satisfied via garnishment from an MWSA debt, leaving a balance. Subsequent alias writs were unenforceable as the sheriff found petitioner’s premises at 355 Maysan Road occupied by employees of Hydro Pipes Philippines, Inc. (HPPI), who prevented levy on personal properties therein.
A third-party claim was filed by HPPI’s Vice-President, Dennis Cuyegkeng, asserting ownership of the properties. Private respondents moved for a break-open order, alleging HPPI was merely petitioner’s alter ego to evade obligations. They presented SEC documents showing identical stockholders, directors, and officers for both corporations, sharing the same principal office address. The NLRC dismissed the third-party claim and affirmed the Labor Arbiter’s issuance of the break-open order.

ISSUE

Did the NLRC commit grave abuse of discretion in affirming the issuance of a break-open order against properties in the premises of HPPI, petitioner’s sister company?

RULING

No. The NLRC did not commit grave abuse of discretion. The corporate veil separating Concept Builders and HPPI was correctly pierced. The law permits disregarding the separate corporate personality where the corporation is used as a shield to defraud or evade a just obligation, as in this case where it is a mere alter ego. The SEC documents conclusively established that both corporations have identical incorporators, stockholders, directors, and officers, and share the same business address. This unity of interest and ownership renders one corporation the instrumentality of the other.
Given this relationship, HPPI cannot be allowed to use its separate identity to harbor assets and frustrate the execution of a final judgment against Concept Builders. The break-open order was a proper remedy under the NLRC Manual of Execution after the sheriff was refused entry and the third-party claim was dismissed. Due process was observed, as both petitioner and HPPI were heard. The NLRC’s factual findings, supported by substantial evidence, are conclusive. Thus, the order was a valid enforcement mechanism against property effectively controlled by the judgment debtor.