Mayor v.
Tiu  Appointment of the OIC Clerk of Court as special
MANUELA AZUCENA MAYOR, petitioner, vs.
EDWIN TIU and DAMIANA CHARITO MARTY,
respondents.
Facts:
 On 25 May 2008, Rosario, the widow of Primo, passed
away and left a holographic last will and testament
 A holographic will is one entirely handwritten,
dated, and signed by the testator himself.
 The will named Remedios Tiu (Rosario’s sister) and
Manuela MAYOR (Rosario’s niece) as the
executors.
 The will was raffled for probation to the RTC. Total
estimated value of the estate is P2.5 million.
 On 29 May 2008, MARTY, claiming to be the adopted
daughter of Rosario, filed a petition for letters of
administration. This was not given due course because
of the probate proceedings.
 On 23 June 2008, MARTY filed a Verified Urgent
Manifestation and Motion praying for probate the
following things below.
 Order an immediate inventory of all the properties
subject of the proceedings
 Direct the tenants of the estate, Mercury Drug and
Chowking, located at Primrose Hotel, to deposit
their rentals with the court
 Direct Metrobank to freeze accounts in the name of
Rosario, Primrose Development (PRIMROSE) or
Remedios;
 Lock up Primrose Hotel in order to preserve the
property until final disposition by the Court.
 On 8 July 2008, Remedios and MAYOR filed their
comment averring that following things:
 MARTY was not an adopted child of the Villasins
(Remedios’ family) based on a certification issued
by the Office of the Clerk of Court of Tacloban
City, attesting that no record of any adoption
proceedings involving Marty existed in their
records.
 The probate court has no jurisdiction over the
properties mistakenly claimed by MARTY as part of
Rosario’s estate because the properties are titled in
the name of Primrose.
 Regarding the deposit of the rental payments, the
probate court has no jurisdiction because the
properties are owned by Primrose, a third person,
having a separate and distinct personality from
Rosario’s estate.
 On 15 July 2008, MARTY replied piercing the
corporate veil is justified in this case since, as early as
March 1981, the veil of corporate entity of
PRIMROSE was already pierced on the ground that it
was a closed family corporation controlled by Rosario
after Primo’s death.
Probate Court Order:
 In favor of MARTY, the following were granted:
administrator
 Ordering Mercury Drug and Chowking to deposit
the rental income with the court
 Metrobank to freeze the accounts mentioned in
Marty’s motion.
 The probate court applied the piercing of the corporate
veil considering that Rosario had no other properties
that comprised her estate other than Primrose.
 MAYOR’s motion for reconsideration, which was
later denied:
 The estate only consisted of shares of stock in
PRIMROSE and not the corporation itself. Thus, the
court could not order the lessees of the corporation
to remit the rentals with the estate administrator.
Court of Appeals decision:
 The probate court order is REVERSED, except for the
appointment of the administrator.
 PRIMROSE had a personality separate and
distinct from the estate and that the probate
court had no jurisdiction to apply the doctrine of
piercing the corporate veil.
 The probate court cannot adjudicate ownership of a
property claimed by another based on adverse title
(this must be submitted to a general court).
 MARTY’s claims have no merit. The properties she
claimed to be part of Rosario’s estate, comprised of
real properties registered under the Torrens system.
Thus, PRIMROSE was considered the owner until
the titles are nullified.
Events after the CA decision:
 MARTY filed an omnibus motion ordering the
following
 Remedios and MAYOR to render an accounting of
the properties and assets of the estate.
 Deposit or consign all rental payments or passive or
passive income derived from the said properties.
 Prohibit the disbursement of funds comprising the
estate, without formal approval by the probate court.
 This was granted by the probate court and affirmed by
the CA when the petition for certiorari was denied
based on technicalities.
Issues:
The pertinent issues are the following:
 Whether PRIMROSE had a personality separate and
distinct from Rosario’s estate.
 Whether the piercing of the corporate veil applicable
in this case.
Ruling:
On the first issue, YES, PRIMROSE has a personality
separate and distinct from the estate of Rosario:
 Artificial persons include:
  A collection or succession of natural persons  This has remained a vacant assertion. At most, what
forming a corporation; and Rosario owned were shares of stock in Primrose. In
 A collection of property to which the law attributes turn, this boldly underscores the fact that Primrose is
the capacity of having rights and duties. a separate and distinct personality from the estate
 Examples include the estate of a bankrupt or of the decedent. Inasmuch as the real properties
deceased person. included in the inventory of the estate of Rosario are in
 The estate of a deceased person is a juridical person the possession of, and are registered in the name of,
separate and distinct from the person of the decedent Primrose, Marty’s claims are bereft of any logical
and any other corporation. reason and conclusion to pierce the veil of corporate
 This status of an estate comes about by operation of fiction.
law.
 This is in consonance with the basic tenet under Additional notes on the doctrine of piercing the
corporation law that a corporation has a separate corporate veil:
personality distinct from its stockholders and from  The probate court in this case has not acquired
other corporations which it may be connected. jurisdiction over Primrose and its properties. Piercing
the veil of corporate entity applies to determination
of liability not of jurisdiction; it is basically applied
On the second issue, NO, the doctrine of piercing the
only to determine established liability. It is not
corporate veil is NOT applicable in this case.
available to confer on the court a jurisdiction it has not
 Under this doctrine, the court looks at the
acquired, in the first place, over a party not impleaded
corporation as a mere collection of individuals or
in a case.
an aggregation of persons undertaking business as
a group, disregarding the separate juridical  This is so because the doctrine of piercing the veil
personality of the corporation unifying the group. of corporate fiction comes to play only during the
trial of the case after the court has already
 Another formulation of this doctrine is that when two
acquired jurisdiction over the corporation. Hence,
business enterprises are owned, conducted and
before this doctrine can be even applied, based on the
controlled by the same parties, both law and equity
evidence presented, it is imperative that the court must
will, when necessary to protect the rights of third
first have jurisdiction over the corporation.
parties, disregard the legal fiction that two
corporations are distinct entities and treat them as  Hence, a corporation not impleaded in a suit cannot be
identical or as one and the same. subject to the court’s process of piercing the veil of its
corporate fiction. Resultantly, any proceedings taken
 The purpose behind piercing a corporation’s identity is
against the corporation and its properties would
to remove the barrier between the corporation and
infringe on its right to due process.
the persons comprising it to thwart the fraudulent
and illegal schemes of those who use the corporate  In the case at bench, the probate court applied the
personality as a shield for undertaking certain doctrine of piercing the corporate veil ratiocinating
proscribed activities. that Rosario had no other properties that comprise her
estate other than her shares in Primrose. Although the
 In this case, instead of holding the decedent’s interest
probate court’s intention to protect the decedent’s
in the corporation separately as a stockholder, the
shares of stock in Primrose from dissipation is
situation was reversed. Instead, the probate court
laudable, it is still an error to order the
ordered the lessees of the corporation to remit rentals
corporation’s tenants to remit their rental
to the estate’s administrator without taking note of the
payments to the estate of Rosario.
fact that the decedent was not the absolute owner of
Primrose but only an owner of shares thereof.
 Mere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stocks of a
corporation is not of itself a sufficient reason for
disregarding the fiction of separate corporate
personalities.
 Moreover, to disregard the separate juridical
personality of a corporation, the wrongdoing
cannot be presumed, but must be clearly and
convincingly established.
 A perusal of the records of this case would show that
no compelling evidence was ever presented to
substantiate the position of Marty that Rosario and
Primrose were one and the same, justifying the
inclusion of the latter’s properties in the inventory of
the decedent’s properties.