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Greenline Freight, Inc. is a freight-forwarding corporation with two stockholders, Maria Santos and Daniel Cruz, each owning 50%. Maria serves as president and chief executive. She regularly uses Greenline’s bank accounts to pay her personal car loan and mortgage, and she commingles corporate funds with her personal funds. Greenline borrows PHP 7,500,000 from Commonwealth Bank to expand its trucking fleet. After a downturn, Greenline defaults. Commonwealth Bank sues Greenline and then seeks to hold Maria personally liable for Greenline’s debt.
(a) Identify the doctrine of separate juridical personality and state the general rule on the liability of stockholders for corporate debts.
(b) Distinguish the rule governing the separate personality of the corporation from the doctrine allowing piercing of the corporate veil; list the essential elements or factors typically considered.
(c) Apply the doctrine to the facts: should the court pierce Greenline Freight, Inc.’s veil and hold Maria Santos personally liable for the debt to Commonwealth Bank? Explain.