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Stronghold Insurance V Cuenca (GR 173297, 2013)

The RTC granted a writ of preliminary attachment against Cuencas and Tayatac for a collection case. When enforced, properties belonging to Arc Cuisine Inc. were levied upon. Cuencas and Tayatac later filed a motion to require the sheriff to deliver the attached properties. The RTC found Marañon and his surety Stronghold Insurance liable for damages. The CA affirmed. The Supreme Court ruled that only Arc Cuisine had the right to claim damages as the corporation has a separate legal personality from its shareholders. As shareholders, Cuencas and Tayatac did not have a direct interest or legal title over the corporation's properties.

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NELIE FRANCE SANCHEZ
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99 views1 page

Stronghold Insurance V Cuenca (GR 173297, 2013)

The RTC granted a writ of preliminary attachment against Cuencas and Tayatac for a collection case. When enforced, properties belonging to Arc Cuisine Inc. were levied upon. Cuencas and Tayatac later filed a motion to require the sheriff to deliver the attached properties. The RTC found Marañon and his surety Stronghold Insurance liable for damages. The CA affirmed. The Supreme Court ruled that only Arc Cuisine had the right to claim damages as the corporation has a separate legal personality from its shareholders. As shareholders, Cuencas and Tayatac did not have a direct interest or legal title over the corporation's properties.

Uploaded by

NELIE FRANCE SANCHEZ
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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STRONGHOLD INSURANCE V CUENCA

(G.R. NO. 173297, MARCH 6, 2013)


On Sec 2 (Doctrine of separate legal entity)

FACTS:
Marañon filed for the collection of a sum of money and damages with an application for the issuance of a
writ of preliminary attachment against the Cuencas and Tayatac. The RTC granted the application for the
writ, and upon its enforcement, the equipment, supplies, materials, and other personal property belonging
to Arc Cuisine, Inc. were levied upon.

Upon appeal, the case was remanded to the RTC. The sheriff reported that on the scheduled inventory of
the properties, it was found that the warehouse chosen for safekeeping of the levied properties was now
tenanted by a new lessee and the properties were all gone and missing. Information provides that the
properties are seen at a shop owned by Marañon.

The Cuencas and Tayactac filed a motion to require the sheriff to deliver the attached properties. Marañon,
in his response, argued that because the attached properties belonged to Arc Cuisine, 50% of the
stockholding of which he and his relatives owned, it should follow that 50% of the value of the missing
attached properties constituted liquidating dividends that should remain and belong to him.

RTC commanded Marañon to surrender all attached properties and later adjudged Marañon and his surety,
Stronghold Insurance, jointly and solidarily liable for damages to the Cuencas and Tayactac. CA affirmed.
Hence, this appeal.

ISSUE:
W/N the Cuencas and Tayatac, as shareholders of Arc Cuisine, could themselves recover damages arising
from wrongful attachment of the corporation’s assets

RULING:
NO. Only Arc Cuisine had the right to claim and recover for the damages.

RATIO:
As a corporation, Arc Cuisine Inc. has a personality distinct and separate from its stockholders. The
corporation alone owned the properties subject to the levy on attachment and was the real party prejudiced
by the damages. As stockholders, the right to recover can only be asserted by the Cuencas and Tayatac if
they did it in the name of the corporation itself. However, Arc Cuisine was not even joined in the action
either as an original party or as an intervenor.

The Cuencas and Tayatac were clearly not vested with any direct interest in the properties. As
stockholders, their holdings represented only their proportionate interest in the properties of the
corporation, but did not vest in them any legal right or title to any specific properties of the corporation.

Given the separate and distinct legal personality of Arc Cuisine, the Cuencas and Tayactac lacked the legal
personality to claim damages sustained from the levy of the former’s properties.

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