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CHILD LEARNING CENTER v. TIMOTHY TAGARIO

FACTS:

Timothy Tagorio, a Grade IV student at Marymount School, was locked inside the boys' comfort room on the third floor of the school building on March 5, 1991. He banged and kicked the door and yelled for help but no one came to his aid. In his panic, Timothy decided to open the window and seek help. However, in the process, he fell three stories and sustained serious multiple physical injuries. Timothy and his parents filed a tort case against Child Learning Center, Inc. (CLC), the operator of Marymount School, and its Board of Directors, including Spouses Edgardo and Sylvia Limon, alleging negligence and seeking damages. CLC argued that there was nothing defective about the door's locking mechanism and that Timothy's fall was not due to its fault or negligence. After trial, the court found in favor of respondents and ordered CLC and the Spouses Limon to pay damages. The trial court disregarded the corporate fiction of CLC and held the Spouses Limon personally liable as they managed the affairs of CLC. The Court of Appeals affirmed the decision, and petitioners appealed the case to the Supreme Court. The issues raised by petitioners involve factual findings of the trial court and the Court of Appeals, which petitioners claim are not supported by evidence. However, the Supreme Court held that there is no justification to reverse the factual findings and considered this case an exception to the general rule.

ISSUES:

  1. Whether or not there was negligence on the part of Child Learning Center, Inc. (CLC) in relation to the accident suffered by Timothy Tagorio.

  2. Whether or not the spouses Edgardo and Sylvia Limon, as members of CLC's Board of Directors, should be held personally liable for the damages awarded to the respondents.

  3. Whether or not the legal principle of "piercing the veil of corporate entity" should be applied in this case.

RULING:

  1. The Court finds no justification to reverse the factual findings of the trial court and the Court of Appeals regarding CLC's alleged negligence. Factual findings, when affirmed by the Court of Appeals, are generally final and binding.

  2. The trial court held the spouses Limon personally liable, disregarding the corporate fiction of CLC, because they were the ones who actually managed the affairs of the institution. The Court of Appeals affirmed this ruling. However, the Supreme Court did not explicitly rule on whether the spouses Limon should be held personally liable.

  3. The issue of "piercing the veil of corporate entity" was alleged by the respondents as a basis for holding the spouses Limon personally liable. However, the Supreme Court did not provide a ruling on this matter.

PRINCIPLES:

  • Factual findings, when affirmed by the Court of Appeals, are generally final and conclusive and may not be reviewed on appeal, unless certain exceptions apply.

  • The legal principle of "piercing the veil of corporate entity" may be applied in determining the liability of individual directors or officers of a corporation. However, the Supreme Court did not provide a ruling on the application of this principle in this case.