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ERIC GODFREY STANLEY LIVESEY v. BINSWANGER PHILIPPINES

FACTS:

Eric Godfrey Stanley Livesey filed a complaint for illegal dismissal with money claims against CBB Philippines Strategic Property Services, Inc. (CBB) and Paul Dwyer. Livesey alleged that he was hired by CBB as Director and Head of Business Space Development and later appointed as Managing Director. He claimed that despite his efforts and the deals he made for CBB, the company failed to pay him a significant portion of his salary. As a result, he resigned and claimed unpaid salaries amounting to US$23,000.

The labor arbiter found Livesey to have been illegally dismissed and ordered CBB to reinstate him and pay his unpaid salaries. The parties then entered into a compromise agreement approved by the labor arbiter. However, CBB failed to pay the remaining installments and ceased operations. Livesey filed a motion for an alias writ of execution, alleging that CBB and Binswanger Philippines, Inc. (Binswanger) were the same corporation. The labor arbiter denied the motion, but it was reversed by the National Labor Relations Commission (NLRC). The respondents then filed a petition for certiorari with the Court of Appeals (CA), arguing that Binswanger is a separate corporation from CBB and that the doctrine of piercing the veil of corporate fiction was erroneously applied.

The case involves a labor dispute between Livesey, the petitioner, and Chesterton Blumenauer Binswanger (CBB), a corporation engaged in real estate brokerage services. Livesey filed a complaint for regularization, non-payment of wages, damages, and attorney's fees against CBB, its President Keith Elliot, and other officers.

The Labor Arbiter (LA) ruled in favor of Livesey and ordered CBB and Elliot to pay the monetary claims. CBB and Elliot appealed the decision to the National Labor Relations Commission (NLRC), but the appeal was dismissed for failure to submit the required cash bond.

The CA granted the petition, reversed the NLRC's decision, and reinstated the LA's order. The CA found that the petition for certiorari was not filed out of time and that there was insufficient evidence to pierce the corporate veil of CBB and hold Elliot personally liable.

Livesey filed a petition for review with the Supreme Court, seeking the reversal of the CA's rulings on two grounds: (1) that the petition for certiorari was filed out of time, and (2) that the doctrine of piercing the veil of corporate fiction should be applied to hold CBB and Elliot liable.

In support of his argument, Livesey presented evidence to show that CBB and Binswanger were essentially the same corporation. He cited the fact that CBB ceased operations after entering into a compromise agreement with him, and shortly after, Binswanger was established with its headquarters located adjacent to CBB's office. Livesey also pointed out that key officers and employees of CBB moved to Binswanger, including Elliot who became Binswanger's President and CEO. He further highlighted that summons served on Binswanger in a previous labor case was received using CBB's receiving stamp, and there were instances where Binswanger referred to itself as "CBB" or "Chesterton Blumenauer Binswanger."

Livesey contended that these circumstances provided overwhelming evidence to pierce the corporate veil and hold CBB and Elliot personally liable for his judgment award.

The petitioner, Graeme D. Livesey, was employed as the President and CEO of Chesterton Blumenauer Binswanger Philippines, Inc. (CBB) from 1991 to 2003. Livesey filed an illegal dismissal case against CBB and its president and CEO, Geoffrey Elliot, claiming that he was wrongfully terminated from his position.

During the proceedings, Livesey presented several pieces of evidence to support his claims, including the compromise agreement signed by Livesey and CBB, wherein CBB agreed to pay Livesey a certain amount as settlement for his claims, the certificate of bank deposit showing that CBB failed to fully comply with the compromise agreement, and the audit report prepared by the Bureau of Internal Revenue (BIR) showing that CBB deliberately evaded its tax obligations.

Livesey argued that Elliot should be held liable for the judgment award in his favor because Elliot, as the President and CEO of both CBB and its successor company Binswanger, orchestrated the fraudulent acts committed by the companies to evade the full satisfaction of the compromise agreement. Livesey invoked the Court's ruling in A.C. Ransom Labor Union-CCLU v. NLRC, which deals with the issue of liability for back wages when a corporation ceases operations.

The respondents, CBB and Elliot, countered Livesey's arguments by asserting that the case involved an intra-corporate controversy and should be under the jurisdiction of the Regional Trial Court instead of the National Labor Relations Commission (NLRC). They also claimed that there was no employer-employee relationship between Livesey and Binswanger, which should exclude the case from the jurisdiction of the labor arbiters and the NLRC. The respondents disputed Livesey’s evidence and contended that the doctrine of piercing the corporate veil should not apply in this case. They further argued that their petition for certiorari was filed within the prescribed period.

ISSUES:

  1. Was the petition for certiorari filed before the CA out of time?

  2. Did the NLRC have jurisdiction over the controversy between Livesey and CBB/Dwyer?

RULING:

  1. The petition for certiorari was filed out of time. The filing period should have been counted from the date of receipt of the NLRC resolution denying the respondents' motion for reconsideration by the respondents' counsel of record at the time, which was January 19, 2006. As the petition was filed beyond the 60-day period, it was considered filed out of time.

  2. The issue of the NLRC's jurisdiction was rendered academic by the compromise agreement between Livesey and CBB, which was approved by the Labor Arbiter. The court found that the issue need not be revived as it would further frustrate the settlement of the obligation agreed upon in the compromise agreement.

PRINCIPLES:

  • For purposes of appeal, the period shall be counted from receipt of such decisions, resolutions, or orders by the counsel or representative of record. (Section 6(a), Rule III of the NLRC Revised Rules of Procedure)

  • The doctrine of piercing the veil of corporate fiction allows the disregard of the separate corporate personality of a corporation if it is formed or used for non-legitimate purposes, such as to evade a just and due obligation, or to justify a wrong, to shield or perpetrate fraud, or to carry out similar inequitable considerations. (Doctrine of Piercing the Veil of Corporate Fiction)

  • The doctrine of piercing the corporate veil: When a corporation is used as a mere alter ego or instrumentality of another corporation or individual, the separate personality of the corporation may be disregarded and the individuals composing it and the corporations will be treated as identical.

  • Continuity of business operations: The continuity of business operations from a dissolved corporation to a newly incorporated corporation may serve as an indicator of the existence of a scheme to evade financial obligations and liabilities.

  • Liability for unfulfilled financial obligations: Individuals involved in the scheme to evade a corporation's financial obligations and liabilities may be held personally liable for those obligations.