Commercial Law; Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stocks of the corporation is not, by itself, a sufficient ground for disregarding the separate corporate personality. The Court ruled that mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stocks of the corporation is not, by itself, a sufficient ground for disregarding the separate corporate personality. Before the corporate fiction can be disregarded, alter-ego elements must first be proven. Following Hi-Cement Corporation v. Insular Bank of Asia and America, the following circumstances should be established: (1) the stockholders had control or complete domination of the corporation’s finances and that the latter had no separate existence with respect to the act complained of; (2) they used such control to commit a wrong or fraud; and (3) the control was the proximate cause of the loss or injury.
It was not shown that Saverio had control or domination over NSI’s finances. The mere fact that it was Saverio who, in behalf of NSI, signed the MOA regarding the loan contract with Puyat is not sufficient to prove that he exercised control over its finances. Nor do the absence of a board resolution authorizing Saverio to contract the loan and NSI’s failure to object to his acts prove the same thing.