Wpm International Trading v. Fe Corazon Labayen

Summary

This case involves the doctrine of piercing the corporate veil in the context of agency and indemnification. Fe Corazon Labayen, acting as manager for WPM International Trading, Inc., contracted with CLN Engineering for restaurant renovation but was later sued for unpaid balance. She sought reimbursement from WPM and its president Manlapaz. Lower courts pierced the corporate veil holding Manlapaz personally liable. The Supreme Court reversed, finding insufficient evidence of the three required elements for piercing corporate veil: complete domination, fraud or wrongdoing, and proximate causation. The Court emphasized that mere stock ownership and concurrent corporate positions are inadequate grounds for piercing corporate fiction. Only WPM remains liable for indemnification, but moral damages were awarded for bad faith refusal to pay. The decision reinforces that corporate veil piercing requires clear and convincing proof of abuse of corporate form.