No court or quasi-judicial agency can acquire jurisdiction over a defendant or respondent unless they are either validly served with summons or voluntarily appear in court.^[1] The doctrine of piercing the corporate fiction is only applied during trial to determine established liability, because it presupposes that it had previously acquired jurisdiction over a defendant or respondent.^[2]

As such, when a party seeks to use the doctrine of piercing the corporate fiction to ascribe liability on several entities, this Court must first determine whether it has jurisdiction over the person of a party.^[3]

This Court resolves a Petition for Review on Certiorari^[4] filed by Ronnie Adriano R. Amoroso (Amoroso) and Vicente R. Constantino; Jr. (Constantino) seeking the reversal of the Court of Appeals Resolutions,^[5] both of which affirmed the National Labor Relations Commission's Decision^[6] and Resolution.^[7] These National Labor Relations Commission issuances affirmed the Labor Arbiter's Decision^[8] dismissing Amoroso and Constantino's Complaint^[9] for illegal dismissal and nonpayment of salary and overtime pay (Complaint).

This case was prompted by the filing of Amoroso and Constantino's Complaint^[10] against Vantage Drilling International and Group of Companies^[11] (Vantage International) and its affiliates: (1) Vantage International Payroll Company Pte. Ltd. (Vantage Payroll); (2) Vantage International Management Co. Pte. Ltd. (Vantage Management); and (3) Vantage Drilling Company (Vantage Company).^[12] Supply Oilfield Services, Inc. (Supply Oilfield), represented by its Chairman and Chief Executive Officer Louis Paul Heusaff, was impleaded as Vantage Company's resident agent.^[13]

Vantage International is organized under the laws of Cayman Islands.^[14] It provides construction supervision services for drilling fleets and providing offshore contract drilling services abroad, including in Congo.^[15]

Vantage Company is likewise a corporation organized under Cayman Islands' laws.^[16] It is licensed to establish a branch office in the Philippines, "doing business under the name of Vantage Driller III Company to provide drilling services to upstream oil and gas companies."^[17] Its resident agent is Supply Oilfield.^[18]

On the other hand, Vantage Payroll and Vantage Management are companies incorporated under Singaporean laws, which respectively provide payroll services and oil and gas services.^[19]

During the proceedings before the Labor Arbiter, Amoroso and Constantino alleged that they were both employed as administrators to be deployed in West Africa.^[20] Amoroso was employed by Vantage Payroll on April 29, 2010.^[21] Meanwhile, Constantino was employed by Vantage Management on July 10, 2011.^[22]

From July 2011 to September 2013, Amoroso's and Constantino's respective employers allegedly made them work for 42 consecutive days for at least 12 hours each day before giving them 21 consecutive rest days.^[23] Despite being allegedly made to work for an aggregate of 252 days, they were not paid their wages and their overtime pay.^[24]

Subsequently, on December 11, 2015, Amoroso and Constantino were allegedly verbally notified that their contracts will be terminated on the ground of redundancy.^[25] Afterwards, they received a formal email regarding the termination of their contracts.^[26] They supposedly protested their termination, as that there was no real redundancy, and demanded a redundancy package.^[27]

On December 20, 2015, Amoroso demanded overtime pay for the extra work hours he rendered from September 3, 2011 to September 22, 2013.^[28] Subsequently, on December 22, 2015, he was suspended from work with full pay and was informed that he will be repatriated to the Philippines the following day and will need to attend a disciplinary hearing,^[29] which transpired on January 7, 2016.^[30]

On January 12, 2016, Amoroso received a Letter^[31] stating that his behavior after being informed of his redundancy "became extremely disruptive and volatile." Thus, he was summarily dismissed for gross misconduct effective immediately.^[32]

Thus, Amoroso and Constantino filed their December 13, 2016 Complaint,^[33] praying that Vantage International Vantage Management, Vantage Payroll, and Vantage Company be held solidarily liable to pay them the sum equivalent to the remaining time of their contracts, as well as separation pay, overtime pay, moral and exemplary damages, attorney's fees, with legal interest.^[34]

Through Respondents' Position Paper,^[35] Supply Oilfield. and Louis Heusaff argued that the Complaint must be dismissed insofar as it concerns them because they are not related to Amoroso and Constantino's employer, which they alleged to be Vantage International.^[36] Thus, Amoroso and Constantino have no factual basis to hold them solidarily liable for any purported illegal dismissal and nonpayment of benefits.^[37] Otherwise stated, Amoroso and Constantino have no cause of action as against them.^[38]

In its April 24, 2017 Decision,^[39] the Labor Arbiter found that it had no jurisdiction over Amoroso and Constantino's employer, Vantage Payroll, which had no legal personality in the Philippines.^[40] She further opined that "[i]t would be an exercise of futility to discuss, try and rule the issues on illegal dismissal and unpaid redundancy package."^[41] The dispositive portion of the Decision reads:

WHEREFORE, judgment is hereby rendered dismissing the complaint.

SO ORDERED.^[42]

Amoroso and Constantino appealed^[43] before the National Labor Relations Commission, alleging that the Labor Arbiter failed to appreciate the fact that the personalities of Vantage International, Vantage Payroll, Vantage Management, and Vantage Company are identical.^[44]

In this regard, they asserted that through the service of summons upon Supply Oilfield,^[45] the National Labor Relations Commission acquired jurisdiction over the persons of Vantage International, Vantage Payroll and Vantage Management.^[46] Accordingly, the Labor Arbiter supposedly should have proceeded to rule upon the issues on illegal dismissal and nonpayment of benefits.^[47]

In a June 27, 2017 Decision,^[48] the National Labor Relations Commission dismissed the appeal and affirmed the Labor Arbiter's ruling.^[49] The dispositive portion of the Decision reads:

WHEREFORE, complainants' appeal is DISMISSED and the 24 April 2017 Decision of the Labor Arbiter Julia Cecily Coching Sosito is AFFIRMED.

SO ORDERED.^[50]

Amoroso and Constantino filed a Motion for Reconsideration, insisting that Vantage International, Vantage Payroll, Vantage Management, and Vantage Company should be held solidarily liable under the doctrine of piercing the veil of corporate fiction.^[51] However, the National Labor Relations Commission denied this motion in an August 11, 2017 Resolution.^[52] Consequently, Amoroso and Constantino filed a Petition for Certiorari^[53] before the Court of Appeals.

Before the Court of Appeals, they maintained "Vantage International and its subsidiaries acted as one" as Amoroso and Constantino "worked for them without distinction as their supposed separate personalities. Vantage [International] and its subsidiaries have the same set of officers, same head office, same tools of trade and same website."^[54] Consequently, jurisdiction upon all Vantage affiliates has been acquired through service of summons upon the resident agent of Vantage Company.^[55]

Through a Resolution,^[56] the Court of Appeals upheld the Complaint's dismissal and the lower tribunals' ruling that, despite the service of summons upon the resident agent of Vantage Company, the lower tribunals did not acquire jurisdiction over the persons of the other respondents (i.e., Amoroso's and Constantino's employers Vantage Payroll and Vantage Management and their mother company, Vantage International).^[57] The dispositive portion of the Resolution reads:

ACCORDINGLY, We resolve to DISMISS the instant Petition for patent lack of merit.

SO ORDERED.^[58]

Dissatisfied, Amoroso and. Constantino moved for reconsideration,^[59] but this motion was denied by the Court of Appeals in another Resolution.^[60] Hence, this Petition.

Before this Court, petitioners Ronnie Adriano R. Amoroso and Vicente R. Constantino, Jr. filed a Petition for Review on Certiorari,^[61] alleging that the "Court of Appeals committed serious and reversible error[s] of law."^[62] They reiterate that respondents Vantage Payroll, Vantage Management, Vantage International, and Vantage Company are their joint employers.^[63] While petitioners were purportedly hired by Vantage Payroll and Vantage Management, in reality, all the respondents acted as one entity and petitioners worked for all companies without distinction.^[64] Because the identities of all respondents are identical, jurisdiction upon them has been acquired through service of summons upon Supply Oilfield.^[65]

For this Court's resolution is the issue of whether or not jurisdiction over Vantage Drilling International and Group of Companies, Vantage International Management Co. Pte. Ltd., and Vantage International Payroll Company Pte. Ltd. has been acquired.

Essentially, petitioners seek to hold all the respondents solidarily liable for the acts allegedly committed by their employers Vantage Payroll and Vantage Management, by invoking the doctrine of piercing the veil of corporate fiction.^[66] They posit that service of summons upon the resident agent of Vantage Company is sufficient to confer jurisdiction upon all the respondents.^[67]

It is settled that a corporation has a separate and distinct personality from that of its stockholders, officers, or any other legal entity to which it is related.^[68] It is presumed to be a bona fide legal entity with its own powers and attributes and is liable for its own acts and obligations.^[69] In this regard, a subsidiary is independent and separate from its parent company; therefore, any claim or suit against one does not and should not bind the other.^[70]

This legal fiction is not always an impenetrable shield, especially when circumstances warrant a denial of protection under a corporate personality under the doctrine of piercing the veil of corporate fiction.^[71] Thus, the piercing doctrine has been applied when the separate personality of the corporation is used to "defeat public convenience, justify wrong, protect fraud or defend crime,"^[72] and when the legal personality is used a shield for fraud, illegality, or inequity committed against third persons to evade obligations and liabilities.^[73] The rationale behind piercing a corporation's legal personality is "to thwart the fraudulent and illegal schemes of those who use the corporate personality as a shield for undertaking certain proscribed activities."^[74]

Application of the piercing doctrine entails a disregard of the legal fiction, such that a corporation will be seen as "a mere collection of individuals or an aggregation of persons undertaking business as a group[.]"^[75] This doctrine may also disregard the legal fiction of two or more companies which are owned, conducted, and controlled by the same persons, such that these companies will be treated as a single entity when it is necessary to protect the rights of third parties.^[76] Otherwise stated, this Court will regard a corporation merely as "an association of persons" and, "in case of two corporations, merge them into one, when its corporate legal entity is used as a cloak for fraud or illegality."^[77]

However, being an extraordinary and equitable remedy, applying the piercing doctrine must be done with caution.^[78] In Kukan International Corporation v. Reyes,^[79] this Court explained that the principle of piercing the veil of corporate fiction, and the resulting treatment (i.e., treating a corporation merely as an association of persons and treating two related corporations as if they were a single entity for the sake of a particular transaction) comes to play only "after the court has already acquired jurisdiction over the corporation."^[80] Thus:

The principle of piercing the veil of corporate fiction, and the resulting treatment of two related corporations as one and the same juridical person with respect to a given transaction, is basically applied only to determine established liability; it is not available to confer on the court a jurisdiction it has not acquired, in the first place, over a party not impleaded in a case. Elsewise put, a corporation not impleaded in a suit cannot be subject to the court's process of piercing the veil of its corporate fiction. In that situation, the court has not acquired jurisdiction over the corporation and, hence, any proceedings taken against that corporation and its property would infringe on its right to due process. Aguedo Agbayani, a recognized authority on Commercial Law, stated as much:

23. Piercing the veil of corporate entity applies to determination of liability not of jurisdiction ....

This is so because the doctrine of piercing the veil of corporate fiction comes to play only during the trial of the case after the court has already acquired jurisdiction over the corporation. Hence, before this doctrine can be applied, based on the evidence presented, it is imperative that the court must first have jurisdiction over the corporation....

The implication of the above comment is twofold: (1) the court must first acquire jurisdiction over the corporation or corporations involved before its or their separate personalities are disregarded; and (2) the doctrine of piercing the veil of corporate entity can only be raised during a full-blown trial over a cause of action duly commenced involving parties duly brought under the authority of the court by way of service of summons or what passes as such service.^[81] (Emphasis supplied, citations omitted)

In other words, it is improper when a party invokes and a court or tribunal applies the doctrine of piercing of corporate fiction before a court or tribunal has acquired jurisdiction over a party.^[82]

Jurisdiction is defined as a court's power and authority to hear, try, and decide a case.^[83] A court or an adjudicative body must acquire, among others, jurisdiction over the person in order to have the authority to decide the case on its merits; otherwise, any judgement rendered would be null and void.^[84]

In City of Lapu-Lapu v. Philippine Economic Zone Authority,^[85] this Court expounded on the concept of personal jurisdiction:

It is 'the power of [a] court to render a personal judgment or to subject the parties in a particular action to the judgment and other rulings rendered in the action.' A court automatically acquires jurisdiction over the person of the plaintiff upon the filing of the initiatory pleading. With respect to the defendant, voluntary appearance in court or a valid service of summons vests the court with jurisdiction over the defendant's person. Jurisdiction over the person of the defendant is indispensable in actions in personam or those actions based on a party's personal liability. The proceedings in an action in personam are void if the court had no jurisdiction over the person of the defendant.^[86] (Citations omitted)

A tribunal would only proceed to trial and allow the respondents^[87] to offer evidence in favor of, or against, piercing the veil of corporate fiction once the tribunal had acquired jurisdiction over them.^[88] Consequently, if jurisdiction over the respondents has not been acquired, this Court cannot proceed to pierce the corporate veil of the respondents, as this would offend their right to due process.^[89]

The respondents' right to due process must be protected. They must first be properly informed that a legal action is being brought against them and be given the chance to respond to the suit.^[90] In this regard, service of summons is a means to do so.^[91] It is required to physically acquire jurisdiction over a person.^[92]

When the respondents do not voluntarily submit to the Labor Arbiter's jurisdiction and when summons have not been validly served, jurisdiction over the person of the respondents cannot be acquired.^[93] When personal jurisdiction has not been acquired, any judgment of a Labor Arbiter will be null and void and "cannot be the source of any right neither can it be the creator of any obligation."^[94] Any act performed pursuant to any void judgment and any claim emanating from it has no legal effect; said void judgment can never become final and any writ of execution based on it cannot become final and will likewise be void.^[95]

For these reasons, before a court or tribunal can rule on the applicability of the doctrine of piercing the veil of corporate fiction and on the concomitant liability of each respondent, said court or tribunal must first decide whether jurisdiction over the respondents has been acquired, either through valid service of summons or voluntary appearance.^[96]

Section 145 of the Revised Corporation Code states that in all actions or legal proceedings against a foreign corporation with a license to transact business in the Philippines, summons and other legal processes may be served against the corporation through its resident agent. Further, such service of summons "shall be held as valid as if served upon the duly authorized officers of the foreign corporation at its home office."^[97] While the Revised Corporation Code expressly states that foreign corporations without a license to transact business in the Philippines may be sued in any court or administrative agency, the law did not state how summons may be served upon them.^[98]

Rule V, Section 4 of the 2011 Rules of Procedure of the National Labor Relations Commission, as amended, instructs that summons may be served upon the parties personally, by registered mail, or by courier. Additionally, "[i]n special circumstances, service of summons may be effected in accordance with the pertinent provisions of the Rules of Court."^[99]

In turn, Rule 14, Section 14 of the Rules of Court, as amended, further instructs that serving of summons depends on whether a foreign private juridical entity is licensed to do or is truly operating its business in the Philippines:

Section 14. Service Upon Foreign Private Juridical Entities. - When the defendant is a foreign private juridical entity which has transacted or is doing business in the Philippines, as defined by law, service may be made on its resident agent designated in accordance with law for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its officers, agents, directors or trustees within the Philippines.

If the foreign private juridical entity is not registered in the Philippines, or has no resident agent but has transacted or is doing business in it, as defined by law, such service may, with leave of court, be effected outside of the Philippines through any of the following means:

(a) By personal service coursed through the appropriate court in the foreign country with the assistance of the Department of Foreign Affairs;
(b) By publication once in a newspaper of general circulation in the country where the defendant may be found and by serving a copy of the summons and the court order by registered mail at the last known address of the defendant;
(c) By facsimile;
(d) By electronic means with the prescribed proof of service; or
(e) By such other means as the court, in its discretion, may direct. (Emphasis supplied)

Here, it is undisputed that there are four respondents impleaded.^[100] All of the respondents are foreign corporations,^[101] namely: (1) Vantage International; (2) Vantage Payroll; (3) Vantage Management; and (4) Vantage Company.

Based on the records, respondent Vantage Company appears to be the only entity who had been served summons, that is, through its resident agent in the Philippines: respondent Supply Oilfield.^[102]

Meanwhile, the records are bereft of evidence by which we can surmise, much less conclude, that the other respondents Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 —aside from respondent Vantage Company Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 —are licensed to transact business in the Philippines or are actually doing business in the Philippines. In any event, all these other respondents were neither served with summons nor did they participate during any of the proceedings; therefore, the Labor Arbiter never acquired jurisdiction over them.^[103]

It bears noting that petitioners were aware that the Labor Arbiter never acquired jurisdiction over respondents Vantage International, Vantage Payroll, and Vantage Management. Indeed, during the proceedings before the Court of Appeals, petitioners belatedly attempted to cure this jurisdictional defect by asserting that the Court of Appeals should have served summons on the Securities and Exchange Commission.^[104]

The Constitution affirms the primacy of labor and advocates a state policy that affords full protection to labor.^[105] This constitutional policy, however, is not meant to be a sword to oppress employers.^[106] Employers are just as equally entitled to due process as the employees.^[107]

It is settled that the essence of due process necessitates that parties be given a reasonable opportunity to be heard and to submit evidence in support of their defenses.^[108] Where, as in this case, the parties who are sought to be held ultimately liable Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 —i.e., the employers—have not been duly notified of the allegations against them by way of proper service of summons, much less accorded any opportunity to be heard, this Court cannot and should not countenance petitioners' attempt to hold their purported employers liable. Otherwise, doing so would undeniably amount to a denial of due process.^[109]

ACCORDINGLY, the Petition is DENIED. The November 28, 2017 Resolution and March 16, 2018 Resolution of the Court of Appeals in CA-G.R. SP No. 153098 are hereby AFFIRMED. The case is hereby remanded back to the Labor Arbiter.

The Labor Arbiter to which the case NLRC NCR Case No. (M)12-15462-16 was assigned, is hereby directed to ISSUE ALIAS SUMMONS to respondents Vantage International Payroll Company Pte. Ltd., Vantage International Management Co. Pte. Ltd., and Vantage Drilling-International and Group of Companies (formerly Vantage Drilling Company and Group of Companies) through any of the modes of extraterritorial service of summons provided under Rule 14, Section 14 of the Rules of Court, as amended. Thereafter, when the issues have been joined upon said Complaint, the Labor Arbiter should proceed to conciliation and mediation and judgment with reasonable dispatch.

SO ORDERED.

Lazaro-Javier, J. Lopez, Dimaampao,^* and Kho, Jr., JJ., concur.

---

^* Designated additional Member per Raffle dated June 3, 2022. Lopez, M., J., no part due to prior action in the Court of Appeals.

^[1] Parayday v. Shogun Shipping Co., Inc., G.R. No. 204555, July 6, 2020, <https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/66312> [Per J. Hernando, Second Division].

^[2] Kukan International Corporation v. Reyes, 646 Phil. 210 (2010) [Per J. Velasco Jr., First Division].

^[3] Parayday v. Shogun Shipping Co., Inc., G.R. No. 204555, July 6, 2020, <https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/66312> [Per J. Hernando, Second Division].

^[4] Rollo, pp. 13-44.

^[5] Id. at 46-51; and 53-54. The November 28, 2017 Decision in CA-G.R. SP No. 153098 was penned by Associate Justice Ramon Paul L. Hernando (now a member of this Court) and concurred in by Associate Justices Remedios A. Salazar-Fernando and Mario V. Lopez (now a member of this Court) of the First Division, Court of Appeals, Manila. The March 16, 2018 Decision in CA-G.R. SP No. 153098 was penned by Associate Justice Ramon Paul L. Hernando (now a member of this Court) and concurred in by Associate Justices Remedios A. Salazar-Fernando and Mario V. Lopez (now a member of this Court) of the Former First Division, Court of Appeals, Manila.

^[6] Id. at 85-95. The June 27, 2017 Decision in NLRC LAC No. 06-000367-16 was penned by Presiding Commissioner Grace E. Maniquiz-Tan and concurred in by Commissioners Dolores M. Peralta-Beley and Mercedes R. Posada-Lacap of the Fifth Division, National Labor Relations Commission, Quezon City.

^[7] Id. at 97-101. The August 11, 2011 Resolution in NLRC LAC No. 06-000367-16 was penned by Presiding Commissioner Grace E. Maniquiz-Tan and concurred in by Commissioners Dolores M. Peralta-Beley and Mercedes R. Posada-Lacap of the Fifth Division, National Labor Relations Commission, Quezon City:

^[8] Id. at 281-291. The National Labor Relations Commission April 24, 2017 Decision in NLRC NCR Case No. (M) 12-15462-16 was penned by Labor Arbiter Julia Cecily Coching Sosito of the National Labor Relations Commission, Quezon City.

^[9] Id. at 103-120.

^[10] Id.

^[11] Formerly known as Vantage Drilling Company and Group of Companies. See Rollo, p. 312.

^[12] Doing business under the name of Vantage Driller III Company. See Rollo, p. 121.

^[13] Rollo, p. 15.

^[14] Id. at 281. See also rollo, pp. 292-304.

^[15] Id. at 305 and 308.

^[16] Id. at 124.

^[17] Id.

^[18] Id.

^[19] Formerly Vantage Drilling Company and Group of Companies. See Rollo, p. 312.

^[20] Rollo, p. 58-59.

^[21] Id. at 59.

^[22] Id. at 60.

^[23] Id.

^[24] Id. at 62. See also rollo, p. 200.

^[25] Rollo, p. 61.

^[26] Id. at 196.

^[27] Id. at 160.

^[28] Id. at 199-200.

^[29] Id. at 147

^[30] Id. at 150.

^[31] Id.

^[32] Id. at 64.

^[33] Id. at 104-120.

^[34] Id. at 118-119.

^[35] Id. at 217-226.

^[36] Id. at 224-225.

^[37] Id.

^[38] Id. at 222.

^[39] Id. at 281-291.

^[40] Id. at 290-291.

^[41] Id.

^[42] Id. at 291

^[43] Id. at 292-304.

^[44] Id. at 300.

^[45] Id. at 301.

^[46] Id. at 300.

^[47] Id. at 301.

^[48] Id. at 85-95.

^[49] Id. at 94.

^[50] Id. at 94.

^[51] Id. at 366-375.

^[52] Id. at 97-101.

^[53] Id. at 55-83.

^[54] Id. at 71.

^[55] Id. at 72.

^[56] Id. at 46-51.

^[57] Id. at 50.

^[58] Id. at 50-51.

^[59] Id. at 380-392.

^[60] Id. at 53-54.

^[61] Id. at 13-38.

^[62] Id. at 27.

^[63] Id. at 16.

^[64] Id. at 29-30.

^[65] Id. at 31.

^[66] Rollo, pp. 64-68.

^[67] Id.