DBP vs Hydro Resources Contractors Corporation

What is the full case title and citation for this March 13, 2013 decision?

DBP vs. Hydro Resources Contractors Corporation, G.R. Nos. 167530, 167561 & 167603, March 13, 2013.

Initial Asset Foreclosure Why did DBP and PNB foreclose the assets of Marinduque Mining and Industrial Corporation?

MMIC defaulted on its obligations, prompting the banks to foreclose its assets in 1984.

Creation of NMIC What corporation was organized by DBP and PNB to operate MMIC’s former mining business?

Nonoc Mining and Industrial Corporation (NMIC) was organized to take over MMIC's mining business.

Stock Ownership and Control What was the share distribution and board composition of the newly formed NMIC?

DBP owned 57%, PNB 43%, and board members were nominees of both banks.

Contractual Agreement What contract was entered into between NMIC and Hercon, Inc. in 1985?

A contract for mine stripping and road construction works amounting to ₱35,770,120.00.

Outstanding Debt What was the unpaid balance left by NMIC after making partial payments to Hercon?

NMIC left an unpaid balance of ₱8,370,934.74 despite demands for payment from Hercon.

Assignment of Rights To which entity did Hercon, Inc. assign its rights to collect the unpaid balance?

Hercon assigned its rights to Hydro Resources Contractors Corporation (HRCC), which filed the complaint.

Privatization Entities Which government entities were impleaded after the banks transferred assets under Proclamation No. 50?

The Asset Privatization Trust (APT) and its successor, the Privatization and Management Office (PMO).

Lower Court Rulings How did the RTC and Court of Appeals rule regarding the liability of the banks?

They pierced the corporate veil, holding NMIC, DBP, and PNB solidarily liable as alter-egos.

The Main Issue What was the primary legal issue regarding NMIC's separate juridical personality and debt?

Whether to pierce the corporate veil and hold the banks solidarily liable for NMIC's debt.

Decision on Piercing the Veil Did the Supreme Court agree that piercing the corporate veil was justified in this case?

No; the Court ruled that piercing the corporate veil was not justified for these entities.

Control and Ownership Rule Does majority ownership or board control automatically make a corporation an alter ego of stockholders?

No; mere ownership, control, or management by nominees does not automatically create an alter ego.

Proof of Wrongdoing What specific evidence was missing to justify holding the parent banks liable for NMIC’s debt?

There was no proof of fraud, bad faith, or use of NMIC to evade obligations.

Final Liability Determination Which entity was held liable for the unpaid balance and who was absolved?

Only NMIC was held liable; DBP, PNB, and APT/PMO were absolved from all liability.