Madrigal Shipping vs Ogilvie

Supreme Court Advanced Decision, October, 1958 issue; 55 O.G. No. 35, p.
7331

Facts:

Ogilvie et al. were engaged by Manuel Mscuana, who was the then captain of the
SS Bridge Vessel. Mascuana was in turn employed by the Madrigal Shipping Inc.

By virtue of a contract entered into by the parties, the said seamen were enplaned
to Japan and from there they were tasked to man the ship until the vessel arrives at
Manila. The contract also provided that the same will terminate upon arrival of the
vessel at the port of Manila.

Another contract containing the same terms and conditions were entered into by
the same parties. However, in this occasion, the seamen were terminated from their
employment even before the vessels arrival at Manila. They were replaced by a
crew of Chinese nationality when the vessel reached Hongkong.

Thus, the Ogilvie et al. filed a claim for their salaries from the time of their unlawful
dismissal until the vessel arrived in Manila.

Madrigal Shipping Co. Inc. refused to take responsibility alleging that it has no
juridical personality and cannot therefore be sued.

They also alleged that it was really the Madrigal & Company (and not MSCI) that
employed the seamen and who should be made liable.

Hence, MSCI filed a motion to dismiss.

Issue/s:

Whether or not Madrigal Shipping Co. Inc should be made liable to Ogilvie at. al.

Ruling:

The SC held in the AFFIRMATIVE.

The Motion to Dismiss filed by MSCI contained averments admitting the execution of
the contract between MSCI and the Seamen. Proving the existence and validity of
such contract, MSCI is guilty of violating a provision of the same providing for the
termination of the services of seamen.

Furthermore, the Court held that MSCI is estopped from claiming that it has no
juridical personality since it has taken advantage and profited from the services of
the Filipino crew.

The Court also asserted that even if it was Madrigal & Company, and not MSCI, who
hired the Filipino crew, MSCI can still be reached by the judgment. The court ruled
that since MSCI serves as a subsidiary or Conduit of the Madrigal & Company, the
fiction of corporate existence may be rightfully disregarded.

Thus, MSCI was ordered to pay the claimed salaries.

A corporation that has no juridical personality is estopped from invoking this

infirmity to evade responsibilities when it entered into a contract and accepted the
privileges and benefits arising from the said contract.