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    China Banking Vs Dyne-Sem

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    hime mej
    Dynetics obtained an 8.9 million peso loan from China Banking Corporation but failed to repay it after closing operations. China Banking Corporation then sued Dyne-Sem Electronics Corporation, claiming it was an alter ego of Dynetics based on their similar businesses, Dyne-Sem using Dynetics' factory and acquiring its machinery, and some shared officers. However, the court ruled that Dyne-Sem was not an alter ego as its acquisition of Dynetics' assets was through a public bidding, not merger, so Dyne-Sem was not liable for Dynetics' debts.

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    China Banking Vs Dyne-Sem

    Uploaded by

    hime mej
    666 views1 page
    Dynetics obtained an 8.9 million peso loan from China Banking Corporation but failed to repay it after closing operations. China Banking Corporation then sued Dyne-Sem Electronics Corporation, claiming it was an alter ego of Dynetics based on their similar businesses, Dyne-Sem using Dynetics' factory and acquiring its machinery, and some shared officers. However, the court ruled that Dyne-Sem was not an alter ego as its acquisition of Dynetics' assets was through a public bidding, not merger, so Dyne-Sem was not liable for Dynetics' debts.

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    china banking vs dyne-sem

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    Dynetics obtained an 8.9 million peso loan from China Banking Corporation but failed to repay it after closing operations. China Banking Corporation then sued Dyne-Sem Electronics Corporation, claiming it was an alter ego of Dynetics based on their similar businesses, Dyne-Sem using Dynetics' factory and acquiring its machinery, and some shared officers. However, the court ruled that Dyne-Sem was not an alter ego as its acquisition of Dynetics' assets was through a public bidding, not merger, so Dyne-Sem was not liable for Dynetics' debts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    666 views1 page

    China Banking Vs Dyne-Sem

    Uploaded by

    hime mej
    Dynetics obtained an 8.9 million peso loan from China Banking Corporation but failed to repay it after closing operations. China Banking Corporation then sued Dyne-Sem Electronics Corporation, claiming it was an alter ego of Dynetics based on their similar businesses, Dyne-Sem using Dynetics' factory and acquiring its machinery, and some shared officers. However, the court ruled that Dyne-Sem was not an alter ego as its acquisition of Dynetics' assets was through a public bidding, not merger, so Dyne-Sem was not liable for Dynetics' debts.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 1

    CHINA BANKING CORPORATION Vs.

    DYNE-SEM ELECTRONICS CORPORATION

    FACTS OF THE CASE


    Dynetics and Elpidio Ong (solidarily liable) obtained a P8,939,000 loan from petitioner China
    Banking Corporation as evidenced by promissory notes. The borrowers failed to pay the
    obligation. Dynetics has closed its operations and left Ong as the sole responsible for the loan.
    Petitioner bank impleaded respondent Dyne-Sem Electronic Corporation as according to petitioner
    bank, Dyne-sem is an alter ego of Dynetics. The bases of the petitioner are as follows: 1)
    Dynetics and Dyne-Sem are both engaged in the business of integrated circuits and semi
    conductor devices; 2) The factory of Dynetics was used by Dyne-sem as its main office, 3)
    Dyne-Sem acquired machineries from Dynetics, 4) Dyne-Sem retained some of the officers of
    Dynetics. RTC ruled in favor of respondent to which Court of Appeals affirmed; hence, this
    petition

    ISSUE WON Dyne-Sem is an alter-ego of Dynetics that would allow the court to pierce the former’s
    corporate veil.

    RULING Dyne-sem is not an alter-ego of Dynetics, and therefore, cannot be held liable for the
    loan obtained by Dynetics. Petitioner failed to prove that Dyne-Sem was organized and controlled,
    and its affairs conducted, in a manner that made it merely an instrumentality, agency, conduit or
    adjunct of Dynetics, or that it was established to defraud Dynetics’ creditors, including petitioner.
    The similarity of business of the two corporations did not warrant a conclusion that respondent
    was but a conduit of Dynetics. The acquisition of assets of Dyne-Sem was through a public
    bidding. What took place was a sale of the assets of the former to the latter. Merger is legally
    distinct from a sale of assets. Thus, where one corporation sells or otherwise transfers all its
    assets to another corporation for value, the latter is not, by that fact alone, liable for the debts
    and liabilities of the transferor. Even the overlapping of incorporators and stockholders of two or
    more corporations will not necessarily lead to such inference and justify the piercing of the veil of
    corporate fiction.

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