- Petitioner
- Development Bank of the Philippines
- Respondent
- Honorable Court of Appeals
- Citation
- G.R. No. 126200
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Kapunan, J.
- Decided
- August 16, 2001
Summary
DBP and PNB foreclosed on Marinduque Mining's mortgaged properties due to loan defaults totaling P6 billion. Remington, an unpaid supplier of construction materials worth P921,755.95, sued to pierce the corporate veil and hold DBP liable, arguing that the newly-created transferee corporations were mere alter egos designed to defraud creditors. The RTC and Court of Appeals ruled for Remington, but the Supreme Court reversed, finding no fraud warranting veil-piercing since DBP was legally mandated to foreclose under PD 385, and the creation of new corporations was necessary for operational continuity. The Court also held that Remington's creditor preference claim under Civil Code Articles 2241-2242 could only be enforced through formal liquidation proceedings, not through a simple foreclosure dispute between two creditors.