G.R. No. 192318, December 05, 2016
REYNO C. DIMSON, PETITIONER, VS. GERRY T. CHUA, RESPONDENT.

FACTS

This case originated from a labor case for illegal dismissal with monetary claims entitled “Reyno Dimson, et al. v. SEASUMCO, MAC, United Coconut Planters Bank (UPCB), and Cotabato Sugar Central Co., Inc. (COSUCECO).” On September 22, 2003, the Labor Arbiter (LA) decided in favor of the complainants, ordering SEASUMCO and MAC, as well as their respective presidents and board of directors, to pay jointly and severally the sum of P3,827,470.51. This decision became final and executory but remained unsatisfied. Consequently, petitioner Reyno C. Dimson filed an Ex-parte Motion for the issuance of an amended alias writ of execution to include the board of directors and corporate officers of SEASUMCO and MAC, including respondent Gerry T. Chua, to hold them liable for the judgment. The LA granted the motion and issued an amended alias writ including the respondent. The respondent, arguing he was denied due process as he was never served summons nor impleaded as a party in the underlying labor case, appealed to the NLRC, which dismissed his appeal. The CA, however, granted the respondent’s petition for certiorari, nullifying the NLRC resolutions and making permanent a writ of preliminary injunction that enjoined the transfer of the respondent’s shares of stock levied upon execution. The CA held that the respondent was denied due process as he was never served summons and could not be held liable for the corporation’s debt absent grounds to pierce the corporate veil.

ISSUE

Whether the respondent can be held solidarily liable with the corporation, of which he was an officer and a stockholder, when he was not served with summons and was never impleaded as a party to the case.

RULING

No. The Supreme Court denied the petition, affirming the CA’s decision. The Court held that the LA never acquired jurisdiction over the person of the respondent due to the lack of service of summons. Since the respondent was not impleaded as a party-respondent in the main labor case, the judgment could not be enforced against him. The Court emphasized that a corporation has a separate juridical personality from its officers and stockholders. The petitioner failed to substantiate any ground to pierce the corporate veil, such as fraud or bad faith on the part of the respondent, to warrant holding him solidarily liable for the corporation’s judgment debt. The solidary liability imposed by the LA on the corporate officers was based solely on their positions, which is insufficient to justify piercing the corporate veil. Therefore, the respondent was denied due process, and the amended alias writ of execution issued against him was null and void.