1. G.R. No. L-19550, June 19, 1967, HARRY S. STONEHILL, vs. HON. JOSE W.

DIOKNO

2. G.R. No. 75885 May 27, 1987, BASECO vs. PCGG

3. G.R. No. 141994, January 17, 2005, FILIPINAS BROADCASTING NETWORK, INC., vs.
AGO MEDICAL AND EDUCATIONAL CENTER-BICOL CHRISTIAN COLLEGE OF
MEDICINE, (AMEC-BCCM) and ANGELITA F. AGO

4. G.R. No. 119858, April 29, 2003, EDWARD C. ONG, vs.THE COURT OF APPEALS AND
THE PEOPLE OF THE PHILIPPINES

5. G.R. No. 133547 December 7, 2001, HEIRS OF ANTONIO PAEL and ANDREA
ALCANTARA and CRISANTO PAEL, vs.COURT OF APPEALS, JORGE H. CHIN and
RENATO B. MALLARI

6. G.R. No. 125027 , August 12, 2002, ANITA MANGILA, vs.COURT OF APPEALS and
LORETA GUINA.

7. G.R. No. 100866. July 14, 1992. REBECCA BOYER-ROXAS and GUILLERMO ROXAS,
Petitioners, v. HON. COURT OF APPEALS and HEIRS OF EUGENIA V. ROXAS, INC.,
Respondents.

8. GR no. 171805, 5/30/2011, PNB vs. Aznar

9. G.R. No. 143312. August 12, 2005, RICARDO S. SILVERIO, JR., ESSES DEVELOPMENT
CORPORATION, and TRI-STAR FARMS, INC., Petitioners, vs. FILIPINO BUSINESS
CONSULTANTS, INC

10. G.R. No. 178352. June 17, 2008 , VIRGILIO S. DELIMA, PETITIONER, VS. SUSAN
MERCAIDA GOIS, RESPONDENT.

1. Harry Stonehill,Robert Brooks, John Brooks and Karl Beck, petitioner

vs.

Hon. Jose Diokno as Sec of Justice, Prosecutors and Judges, respondents

 This is a petition for certiorari, prohibition, mandamus and injunction to restrain the
respondent-Prosecutors, their agents and/or representatives from using the effects seized by the
police officers from the petitioners’ offices and residences by virtue of search warrants.

Facts:

Upon application of the Respondent-Prosecutors and Respondent-Judges, a total of 42 search

warrants were issued on different dates against petitioners and/or the corporations of which they
were officers, directing any peace officer to search the petitioners and/or the premises of their
offices, warehouses and/or residences and to seize and take possession of records to all business
transactions.

Petitioners questioned the validity of the search warrants and alleged that they are null and void,
mainly, because they do not describe with particularity the books and things to be seized.

Respondents alleged that the said search warrants are valid and issued in accordance with law,
that the defects, if any, were cured by petitioners’ consent

Issue:

Whether the petitioners can assail the legality of the search warrants and of the seizures made in
pursuance thereof

Ruling:

No. The petitioners herein and the corporations of which they are officers have personalities
separate and distinct from each other.

It is well settled that the legality of a seizure can be contested only by the party whose rights
have been impaired thereby, and that the objection to an unlawful search and seizure is purely
personal and cannot be availed of by third parties. Consequently, petitioners herein may not
validly object to the use in evidence against them of the documents, papers and things seized
from the offices and premises of the corporations adverted to above, since the right to object to
the admission of said papers in evidence belongs exclusively to the corporations, to whom the
seized effects belong, and may not be invoked by the corporate officers in proceedings against
them in their individual capacity.

Moreover, the Government's action in gaining possession of papers belonging to the corporation
did not relate to nor did it affect the personal defendants. If these papers were unlawfully seized
and thereby the constitutional rights of or any one were invaded, they were the rights of the
corporation and not the rights of the other defendants.

STONEHILL V. DIOKNO G.R. No. L-19550 June 19, 1967

FACTS:
Stonehill et al, herein petitioners, and the corporations they form were alleged to have committed acts in
“violation of Central Bank Laws, Tariff and Customs Laws, Internal Revenue (Code) and Revised Penal Code.”

Respondents issued, on different dates, 42 search warrants against petitioners personally, and/or corporations for
which they are officers directing peace officers to search the persons of petitioners and premises of their offices,
warehouses and/or residences to search for personal properties “books of accounts, financial records, vouchers,
correspondence, receipts, ledgers, journals, portfolios, credit journals, typewriters, and other documents
showing all business transactions including disbursement receipts, balance sheets and profit and loss statements
and Bobbins(cigarette wrappers)” as the subject of the offense for violations of Central Bank Act, Tariff and
Customs Laws, Internal Revenue Code, and Revised Penal Code.

The documents, papers, and things seized under the alleged authority of the warrants in question may be split into
(2) major groups, namely:

(a) those found and seized in the offices of the aforementioned corporations and

(b) those found seized in the residences of petitioners herein.

Petitioners averred that the warrant is null and void for being violative of the constitution and the Rules of court
by:

(1) not describing with particularity the documents, books and things to be seized;

(2) money not mentioned in the warrants were seized;

(3) the warrants were issued to fish evidence for deportation cases filed against the petitioner;

(4) the searches and seizures were made in an illegal manner; and

(5) the documents paper and cash money were not delivered to the issuing courts for disposal in
accordance with law.

The prosecution counters that the search warrants are valid and issued in accordance with law; The defects of said
warrants were cured by petitioners consent; and in any event, the effects are admissible regardless of the
irregularity.

The Court granted the petition and issued the writ of preliminary injunction. However, by a resolution, the writ was
partially lifted dissolving insofar as paper and things seized from the offices of the corporations.

ISSUE:

WON the search warrant issued is valid.

HELD:

NO the search warrant is invalid.

The SC ruled in favor of petitioners. l The constitution protects the people’s right against unreasonable search and
seizure. It provides; (1) that no warrant shall issue but upon probable cause, to be determined by the judge in the
manner set forth in said provision; and (2) that the warrant shall particularly describe the things to be seized. In the
case at bar, none of these are met.
The warrant was issued from mere allegation that petitioners committed a “violation of Central Bank Laws, Tariff
and Customs Laws, Internal Revenue (Code) and Revised Penal Code.” In other words, no specific offense had been
alleged in said applications. The averments thereof with respect to the offense committed were abstract.

As a consequence, it was impossible for the judges who issued the warrants to have found the existence of
probable cause, for the same presupposes the introduction of competent proof that the party against whom it is
sought has performed particular acts, or committed specific omissions, violating a given provision of our criminal
laws.

As a matter of fact, the applications involved in this case do not allege any specific acts performed by herein
petitioners. It would be a legal heresy, of the highest order, to convict anybody of a “violation of Central Bank
Laws, Tariff and Customs Laws, Internal Revenue (Code) and Revised Penal Code,” — as alleged in the
aforementioned applications — without reference to any determinate provision of said laws or codes.

The warrants authorized the search for and seizure of records pertaining to all business transactions of petitioners
regardless of whether the transactions were legal or illegal.

Thus, openly contravening the explicit command of the Bill of Rights — that the things to be seized be particularly
described — as well as tending to defeat its major objective: the elimination of general warrants.

However, SC emphasized that petitioners cannot assail the validity of the search warrant issued against their
corporation because petitioners are not the proper party.

The petitioners have no cause of action to assail the legality of the contested warrants and of the seizures made in
pursuance thereof, for the simple reason that said corporations have their respective personalities, separate and
distinct from the personality of herein petitioners, regardless of the amount of shares of stock or of the interest of
each of them in said corporations, and whatever the offices they hold therein may be.8 Indeed, it is well settled
that the legality of a seizure can be contested only by the party whose rights have been impaired thereby and that
the objection to an unlawful search and seizure is purely personal and cannot be availed of by third parties.

2. Bataan Shipyard & Engineering Co., Inc. vs Presidential Commission on Good

Government
 150 SCRA 181 – Business Organization – Corporation Law – A Corporation Cannot Invoke the
Right Against Self-Incrimination
When President Corazon Aquino took power, the Presidential Commission on Good
Government (PCGG) was formed in order to recover ill gotten wealth allegedly acquired by
former President Marcos and his cronies. Aquino then issued two executive orders in 1986 and
pursuant thereto, a sequestration and a takeover order were issued against Bataan Shipyard &
engineering Co., Inc. (BASECO). BASECO was alleged to be in actuality owned and controlled
by the Marcoses through the Romualdez family, and in turn, through dummy stockholders.
The sequestration order issued in 1986 required, among others, that BASECO produce
corporate records from 1973 to 1986 under pain of contempt of the PCGG if it fails to do so.
BASECO assails this order as it avers, among others, that it is against BASECO’s right against
self incrimination and unreasonable searches and seizures.

ISSUE: Whether or not BASECO is correct.

HELD: No. First of all, PCGG has the right to require the production of such documents
pursuant to the power granted to it. Second, and more importantly, right against self-
incrimination has no application to juridical persons. There is a reserve right in the
legislature to investigate the contracts of a corporation and find out whether it has exceeded its
powers. It would be a strange anomaly to hold that a state, having chartered a corporation like
BASECO to make use of certain franchises, could not, in the exercise of sovereignty, inquire
how these franchises had been employed, and whether they had been abused, and demand the
production of the corporate books and papers for that purpose.
Neither is the right against unreasonable searches and seizures applicable here. There
were no searches made and no seizure pursuant to any search was ever made. BASECO was
merely ordered to produce the corporate records.
 3. FILIPINAS BROADCASTING NETWORK, INC., vs. AMEC-BCCM

Petitioner: Filipinas Broadcasting Network, Inc.,

Respondents: AGO Medical and Educational Center-Bicol Christian College of Medicine,

(amec-bccm) and Angelita f. Ago

FACTS: Exposé is a radio documentary program hosted by Carmelo Rima and Hermogenes
Alegre. Exposé is aired every morning over DZRC-AM which is owned by Filipinas
Broadcasting Network, Inc. (FBNI). Exposé is heard over Legazpi City, the Albay municipalities
and other Bicol areas.

Rima and Alegre exposed various alleged complaints from students, teachers and parents against
Ago Medical and Educational Center-Bicol Christian College of Medicine (AMEC) and its
administrators. Claiming that the broadcasts were defamatory, AMEC and the dean of AMEC’s
College of Medicine, filed a complaint for damages against FBNI, Rima and Alegre.

ISSUE: Whether AMEC is entitled to moral damages.

RULING:

A juridical person is generally not entitled to moral damages because, unlike a natural
person, it cannot experience physical suffering or such sentiments as wounded feelings, serious
anxiety, mental anguish or moral shock. Nevertheless, AMEC’s claim for moral damages falls
under item 7 of Article 2219 of the Civil Code. This provision expressly authorizes the recovery
of moral damages in cases of libel, slander or any other form of defamation. Article 2219(7) does
not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such
as a corporation can validly complain for libel or any other form of defamation and claim for
moral damages.
4. EDWARD C. ONG, petitioner, vs. THE COURT OF APPEALS AND THE PEOPLE OF
THE PHILIPPINES, respondents., G.R. No. 119858. April 29, 2003

Facts:

Assistant City Prosecutor Dina P. Teves of the City of Manila charged petitioner and
Benito Ong with two counts of estafa under separate Informations dated 11 October 1991.

In Criminal Case No. 92-101989, the Information indicts petitioner and Benito Ong of the crime
of estafa committed as follows:

On July 23, 1990, the said accused, representing ARMAGRI International Corporation,
conspiring and confederating together did then and there willfully, unlawfully and feloniously
defraud the SOLIDBANK Corporation represented by its Accountant, DEMETRIO LAZARO, a
corporation duly organized and existing under the laws of the Philippines located at Juan Luna
Street, Binondo, this City, in the following manner, to wit: the said accused received in trust
from said SOLIDBANK Corporation the following, to wit: 10,000 bags of urea valued at
P2,050,000.00 specified in a Trust Receipt Agreement and covered by a Letter of Credit No.
DOM GD 90-009 in favor of the Fertiphil Corporation.

In Criminal Case No. 92-101990, the Information likewise charges petitioner of the crime
of estafa committed as follows:

That on or about July 6, 1990, in the City of Manila, Philippines, the said accused,
representing ARMAGRI International Corporation, defraud the SOLIDBANK Corporation
represented by its Accountant, DEMETRIO LAZARO. The said accused received in trust from
said SOLIDBANK Corporation the following goods, to wit: 125 pcs. Rear diff. assy RNZO 49”
50 pcs. Front & Rear diff assy. Isuzu Elof, 85 units 1-Beam assy. Isuzu Spz all valued at
P2,532,500.00 specified in a Trust Receipt Agreement and covered by a Domestic Letter of
Credit No. DOM GD 90-006 in favor of the Metropole Industrial Sales with address at P.O. Box
AC 219, Quezon City.

Issue: WON PETITIONER WAS NECESSARILY THE ONE RESPONSIBLE FOR THE
OFFENSE, BY THE MERE CIRCUMSTANCE THAT PETITIONER ACTED AS AGENT
AND SIGNED FOR THE ENTRUSTEE CORPORATION.

Held: Section 13 of the Trust Receipts Law which provides: x x x. If the violation is committed
by a corporation, partnership, association or other juridical entities, the penalty provided for in
this Decree shall be imposed upon the directors, officers, employees or other officials or persons
therein responsible for the offense, without prejudice to the civil liabilities arising from the
offense. We hold that petitioner is a person responsible for violation of the Trust Receipts
Law.

The Trust Receipts Law is violated whenever the entrustee fails to: (1) turn over the proceeds of
the sale of the goods, or (2) return the goods covered by the trust receipts if the goods are not
sold.[18] The mere failure to account or return gives rise to the crime which is malum
prohibitum.[19] There is no requirement to prove intent to defraud.
The Trust Receipts Law recognizes the impossibility of imposing the penalty of imprisonment on
a corporation. Hence, if the entrustee is a corporation, the law makes the officers or employees or
other persons responsible for the offense liable to suffer the penalty of imprisonment. The reason
is obvious: corporations, partnerships, associations and other juridical entities cannot be put to
jail. Hence, the criminal liability falls on the human agent responsible for the violation of the
Trust Receipts Law.

EDWARD C. ONG, petitioner, vs. THE COURT OF APPEALS AND THE PEOPLE OF THE
PHILIPPINES, respondents.

Facts:

Assistant City Prosecutor Dina P. Teves of the City of Manila charged petitioner and Benito Ong with two
counts of estafa under separate Informations dated 11 October 1991.

In Criminal Case No. 92-101989, the Information indicts petitioner and Benito Ong of the crime of estafa
committed as follows:

That on or about July 23, 1990, in the City of Manila, Philippines, the said accused, representing
ARMAGRI International Corporation, conspiring and confederating together did then and there willfully,
unlawfully and feloniously defraud the SOLIDBANK Corporation represented by its Accountant,
DEMETRIO LAZARO, a corporation duly organized and existing under the laws of the Philippines located
at Juan Luna Street, Binondo, this City, in the following manner, to wit: the said accused received in trust
from said SOLIDBANK Corporation the following, to wit: 10,000 bags of urea valued at P2,050,000.00
specified in a Trust Receipt Agreement and covered by a Letter of Credit No. DOM GD 90-009 in
favor of the Fertiphil Corporation.

In Criminal Case No. 92-101990, the Information likewise charges petitioner of the crime of estafa
committed as follows:

That on or about July 6, 1990, in the City of Manila, Philippines, the said accused, representing
ARMAGRI International Corporation, defraud the SOLIDBANK Corporation represented by its
Accountant, DEMETRIO LAZARO. The said accused received in trust from said SOLIDBANK Corporation
the following goods, to wit: 125 pcs. Rear diff. assy RNZO 49” 50 pcs. Front & Rear diff assy. Isuzu Elof,
85 units 1-Beam assy. Isuzu Spz all valued at P2,532,500.00 specified in a Trust Receipt Agreement and
covered by a Domestic Letter of Credit No. DOM GD 90-006 in favor of the Metropole Industrial Sales
with address at P.O. Box AC 219, Quezon City.

Issue: WON PETITIONER WAS NECESSARILY THE ONE RESPONSIBLE FOR THE OFFENSE, BY
THE MERE CIRCUMSTANCE THAT PETITIONER ACTED AS AGENT AND SIGNED FOR THE
ENTRUSTEE CORPORATION.

Held: Section 13 of the Trust Receipts Law which provides: x x x. If the violation is committed by a
corporation, partnership, association or other juridical entities, the penalty provided for in this Decree shall
be imposed upon the directors, officers, employees or other officials or persons therein responsible for the
offense, without prejudice to the civil liabilities arising from the offense. We hold that petitioner is a
person responsible for violation of the Trust Receipts Law.

The Trust Receipts Law is violated whenever the entrustee fails to: (1) turn over the proceeds of the sale
of the goods, or (2) return the goods covered by the trust receipts if the goods are not sold.[18] The mere
failure to account or return gives rise to the crime which is malum prohibitum.[19] There is no
requirement to prove intent to defraud.[20]
The Trust Receipts Law recognizes the impossibility of imposing the penalty of imprisonment on a
corporation. Hence, if the entrustee is a corporation, the law makes the officers or employees or other
persons responsible for the offense liable to suffer the penalty of imprisonment. The reason is obvious:
corporations, partnerships, associations and other juridical entities cannot be put to jail. Hence, the
criminal liability falls on the human agent responsible for the violation of the Trust Receipts Law.

5. HEIRS OF ANTONIO PAEL and ANDREA ALCANTARA and CRISANTO PAEL

vs.

COURT OF APPEALS, JORGE H. CHIN and RENATO B. MALLARI

G.R. No. 133547.December 7, 2001

FACTS:

PFINA acquired the properties from the Heirs of Pael by virtue of a deed of assignment
dated January 25, 1983. It filed a motion to intervene before the Court of Appeals; however,
before it filed its motion for intervention, or for a long period of fifteen (15) years, PFINA and
the Heirs of Pael were totally silent about the alleged deed of assignment. No steps were taken
by either of them to register the deed or secure transfer certificate of title evidencing the change
of ownership during this long period of time.

At the time PFINA acquired the disputed properties in 1983, its corporate name was
PFINA Mining and Exploration, Inc., a mining company which had no valid grounds to engage
in the highly speculative business of urban real estate development.

ISSUE:

Whether or not the 1983 transfer produces legal effect.

RULING:

NO.

As correctly ruled by the courts, the alleged transfer in 1983 was not only dubious and
fabricated; it could produce no legal effect as the Paels were no longer owners of the land they
allegedly assigned.

The Court highlighted the citation in the comment of Intervenor U.P., specifically citing
the decision in Roberto A. Pael et al. v. Court of Appeals, et al., supra, wherein the title of the
Paels was declared to be of dubious origin and a fabrication. Hence, since respondents derive
their titles from a defective title, their titles should also be null and void.

The motion for intervention of the University of the Philippines is GRANTED. The case
is REMANDED to the Court of Appeals for reception of evidence on the conflicting claims over
the property covered by TCT Nos. 52928 and 52929 between the intervernor University of the
Philippines, on the one hand, and respondents Jorge H. Chin and Renato B. Mallari, on the other
hand. The motions for reconsideration filed by petitioners are DENIED for lack of merit. This
denial is FINAL and no further pleadings from petitioners will be entertained.

6. ANITA MANGILA, petitioner, vs. COURT OF APPEALS and LORETA GUINA,

respondents.
 G.R. No. 125027. August 12, 2002

FACTS:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to set
aside the Decision of the Court of Appeals affirming the Decision of the Regional Trial Court,
Branch 108,Pasay City. The trial court upheld the writ of attachment and the declaration of
default on petitioner while ordering her to pay private respondent P109,376.95 plus 18 percent
interest per annum, 25percent attorney’s fees and costs of suit. On December 15, 1995, the Court
of Appeals rendered adecision affirming the decision of the trial court. The Court of Appeals
upheld the validity of theissuance of the writ of attachment and sustained the filing of the action
in the RTC of Pasay. TheCourt of Appeals also affirmed the declaration of default on petitioner
and concluded that the trialcourt did not commit any reversible error.

ISSUES:

WHETHER RESPONDENT COURT ERRED IN NOT HOLDING THAT THE WRIT

OFATTACHMENT WAS IMPROPERLY ISSUED AND SERVED; WHETHER THERE WAS
IMPROPER VENUE.

HELD:

The petition is GRANTED on the grounds of improper venue and invalidity of the service of the
writ of attachment. The decision of the Court of Appeals and the order of respondent judge
denying the motion to dismiss are REVERSED and SET ASIDE.

The grant of the provisional remedy of attachment involves three stages: first, the court issues the
order granting the application; second, the writ of attachment issues pursuant to the order
granting the writ; and third, the writ is implemented. For the initial two stages, it is not necessary
that jurisdiction over the person of the defendant be first obtained. However, once the
implementation of the writ commences, the court must have acquired jurisdiction over the
defendant for without such jurisdiction, the court has no power and authority to act in any
manner against the defendant. Any order issuing from the Court will not bind the defendant. The
trial court cannot enforce such a coercive process on petitioner without first obtaining
jurisdiction over her person. The preliminary writ of attachment must be served after or
simultaneous with the service of summons on the defendant whether by personal service,
substituted service or by publication as warranted by the circumstances of the case. The
subsequent service of summons does not confer a retroactive acquisition of jurisdiction over her
person because the law does not allow for retroactivity of a belated service.

A sole proprietorship does not possess a juridical personality separate and distinct from the
personality of the owner of the enterprise. The law merely recognizes the existence of a sole
proprietorship as a form of business organization conducted for profit by a single individual and requires
its proprietor or owner to secure licenses and permits, register its business name, and pay taxes to the
national government. The law does not vest a separate legal personality on the sole proprietorship or
empower it to file or defend an action in court
 7. REBECCA BOYER-ROXAS and GUILLERMO ROXAS, petitioners, vs. HON.
COURT OF APPEALS and HEIRS OF EUGENIA V. ROXAS, INC., respondents.

G.R. No. 100866 | July 14, 1992 | Third Division | Justice Gutierrez, Jr.

Corporation Law | Corporation | Attributes of a Corporation

FACTS:

In two (2) separate complaints for recovery of possession filed with the Regional Trial
Court of Laguna against petitioners Rebecca Boyer-Roxas and Guillermo Roxas
respectively, respondent corporation, Heirs of Eugenia V. Roxas, Inc., prayed for the
ejectment of the petitioners from buildings inside the Hidden Valley Springs Resort located
at Limao, Calauan, Laguna allegedly owned by the respondent corporation.

In both cases, the respondent corporation alleged that the petitioners never paid rentals for
the use of the buildings and the lots and that they ignored the demand letters for them to
vacate the buildings.

In their separate answers, the petitioners traversed the allegations in the complaint by
stating that they are heirs of Eugenia V. Roxas and therefore, co-owners of the Hidden
Valley Springs Resort; and as co-owners of the property, they have the right to stay within
its premises. The plaintiffs alleged, among others, that the veil of corporate fiction should
be pierced.

ISSUE:

Whether the petitioners are co-owners of the contested property.

Whether there is basis for piercing the veil of the corporation.

RULING:

1. No. The respondent is a bona fide corporation. As such, it has a juridical personality of
its own separate from the members composing it. There is no dispute that title over the
questioned land where the Hidden Valley Springs Resort is located is registered in the
name of the corporation. The records also show that the staff house being occupied by
petitioner Rebecca Boyer-Roxas and the recreation hall which was later on converted into
a residential house occupied by petitioner Guillermo Roxas are owned by the respondent
corporation.

2. No. The petitioners’ suggestion that the veil of the corporate fiction should be pierced is
untenable. The separate personality of the corporation may be disregarded only when the
corporation is used “as a cloak or cover for fraud or illegality, or to work injustice, or
where necessary to achieve equity or when necessary for the protection of the creditors.”
The circumstances in the present cases do not fall under any of the enumerated categories.
 BOYER – ROXAS VS. COURT OF APPEALS

211 SCRA 470 (1992)

FACTS OF THE CASE

When Eugenia V. Roxas died, her heirs formed a corporation under the name and style of
Heirs of Eugenia V. Roxas, Inc. using her estate as the capital of the corporation, the private
respondent herein. It was primarily engaged in agriculture business, however it amended its
purpose to enable it to engage in resort and restaurant business. Petitioners are stockholders of
the corporation and two of the heirs of Eugenia. By tolerance, they were allowed to occupy some
of the properties of the corporation as their residence. However, the board of directors of the
corporation passed a resolution evicting the petitioners from the property of the corporation
because the same will be needed for expansion.

At the RTC, private respondent presented its evidence averring that the subject premises
are owned by the corporation. Petitioners failed to present their evidence due to alleged
negligence of their counsel. RTC handed a decision in favor of private respondent.

Petitioners appealed to the Court of Appeals but the latter denied the petition and
affirmed the ruling of the RTC. Hence, they appealed to the Supreme Court. In their appeal,
petitioners argues that the CA made a mistake in upholding the decision of the RTC, and that
their occupancy of the subject premises should be respected because they own an aliquot part of
the corporation as stockholders, and that the veil of corporate fiction must be pierced by virtue
thereof.

ISSUE

1. Whether petitioner’s contention were correct as regards the piercing of the corporate veil.

2. Whether petitioners were correct in their contention that they should be respected as regards
their occupancy since they own an aliquot part of the corporation.

RULING

1.Petitioner’s contention to pierce the veil of corporate fiction is untenable. As aptly held by the
court: “..The separate personality of a corporation may ONLY be disregarded when the
corporation is used as a cloak or cover for fraud or illegality, or to work injustice, or when
necessary to achieve equity or when necessary for the protection of creditors.”

2. As regards petitioners contention that they should be respected on their occupancy by virtue of
an aliquot part they own on the corporation as stockholders, it also fails to hold water. The court
held that “properties owned by a corporation are owned by it as an entity separate and distinct
from its members. While shares of stocks are personal property, they do not represent property
of the corporation. A share of stock only typifies an aliquot part of the corporation’s property, or
the right to share in its proceeds to that extent when distributed according to law and equity, but
its holder is not the owner of any part of the capital of the corporation. Nor is he entitled to the
possession of any definite portion of its property or assets. The holder is not a co-owner or a
tenant in common of the corporate property.”

7. Boyer-Roxas vs. Court of Appeals

Facts:
- Eugenia Roxas originally owned the questioned properties in this case which include
among others cottages, houses, buildings, swimming pools, tennis court, restaurants,
open pavilions inside the Hidden Valley Springs Resort in Laguna.
- When Eugenia died, her heirs among whom were Rebecca Boyer-Roxas and
Guillermo Roxas decided to form the corporation, Heirs of Eugenia V. Roxas, Inc.
with the inherited properties as capital of the corporation.
- This was incorporated with the primary purpose of engaging in agriculture to
develop the inherited properties.
- The Articles of Incorporation however was amended to allow it to engage in the
resort business.
- Accordingly, the corporation put up a resort known as Hidden Valley Spring Resort
where the questioned properties were located.
- Eufrocino Roxas, (husband of Eugenia) during his lifetime together with Eribito
Roxas ( husband of Rebecca and father of Guillermo) managed the corporation.
- Eriberto and Rebecca occupied the staff house as their residence and converted the
recreation hall into a residential house with the blessings of Eufrocino, who was then
the majority stockholder of the corporation.
- The Board of directors did not object to the actions of Eufrocino.
- Rebecca and Guillermo were allowed to stay within the questioned properties until
the Board of Directors approved a resolution ejecting them.
- Despite demand however, they refused to vacate.
- Hence, two separate complaints for recovery of possession was filed.
- TC affirmed by CA, ordered Rebecca and all persons claiming under her to vacate
the premises.
- Hence, this petition.

Issue: Whether or not the petitioner could be ejected? Yes.

Held:

Properties registered in the name of the corporation are owned by it as an entity separate and
distinct from its members. While shares of stock constitute personal property, they do not
represent property of the corporation. The corporation has property of its own. A share of stock
only typifies an aliquot part of the corporation’s property or the right to share in its proceeds to
that extent when distributed according to law and equity but its holder is not the owner of any
part of the capital of the corporation. Nor is he entitled to the possession of any definite portion
of its property or assets. The stockholder is not a co-owner or tenant in common of the corporate
property. A corporation can therefore sue to recover real property being occupied by its former
president (who was also a significant stockholder) for it has a juridical personality separate and
distinct from its stockholders even though in the past the corporation allowed the president to
enjoy the possession of the property.
There is nothing irregular in the adoption of the Resolution by the BOD ejecting petitioners for
Corporation’s expansion and improvement program.
- Petitioner’s stay within the questioned properties was merely by tolerance of the
respondent corporation in deference to the wishes of Eufrocino Roxas.
- Eufrocino’s action can not bound the corporation forever.

The Corrporation may elect to eject petitioners at any time it wishes for the benefit and interest
of the respondent corporation.

8. PHILIPPINE NATIONAL BANK, petitioner, vs. MERELO B. AZNAR; MATIAS B.

AZNAR III; JOSE L. AZNAR (deceased), represented by his heirs; RAMON A.
BARCENILLA; ROSARIO T. BARCENILLA; JOSE B. ENAD (deceased), represented by
his heirs; and RICARDO GABUYA (deceased), represented by his heirs, Respondents

G.R. No.172021 May 30, 2011

MERELO B. AZNAR and MATIAS B. AZNAR III, petitioners, vs. PHILIPPINE NATIONAL
BANK, Respondent

LEONARDO-DE CASTRO, J.:

Facts

Rural Insurance and Surety Company, Inc. (RISCO) ceased operation due to business
reverses. Stockholders, Aznar et.al want to rehabilitate the company, thus they contributed a
total amount of P212,720.00 to purchase three parcels of land in Cebu. Titles of the lots were
issued under the name of RISCO. There was an annotation on the title of the lots:

“And that the respective contributions above-mentioned shall constitute as their lien or interest
on the property described above, if and when said property are titled in the name of RURAL
INSURANCE & SURETY CO., INC., subject to registration as their adverse claim in pursuance
of the Provisions of Land Registration Act, (Act No. 496, as amended) until such time their
respective contributions are refunded to them completely”.

There are subsequent annotations made on the same titles including the Notice of Attachment
and Writ of Execution both dated August 3, 1962 in favor of Philippine National Bank.

PNB was the only bidder of the 3 parcels of land, thus the Certificate of Sale was issued to them.
Because of this Aznar et.al file a claim to quiet title to the 3 parcels of land.

Defendant PNB averred that plaintiffs have no right of action for quieting of title since the order
of the court directing the issuance of titles to PNB had already become final and executory and
their validity cannot be attacked except in a direct proceeding for their annulment. Defendant
further asserted that plaintiffs, as mere stockholders of RISCO do not have any legal or equitable
right over the properties of the corporation. PNB posited that even if plaintiffs’ monetary lien
had not expired, their only recourse was to require the reimbursement or refund of their
contribution.

Trial Court ruled against PNB on the basis that there was an Express Trust between RISCO as
the trustee and Aznar et.al (stockholders) were the beneficiaries.

Issue

Whether or not Aznar et.al have the right to quiet title of the 3 parcels of land.

Ruling:

The court held that the agreement contained in the Minutes of the Special Meeting of the
RISCO Board of Directors was a loan by the stockholders to RISCO. The contributions shall
constitute as “lien or interest on the property”. The term lien as used in the Minutes is defined as
“a discharge on property usually for the payment of some debt or obligation. Hence, the term lien
in the Minutes, the court said that the money contributed by Aznar et.al was in the nature of a
loan, secured by their liens and interests duly annotated on the titles. The annotation of their lien
serves only as collateral and does not in any way vest ownership of property to plaintiffs, thus
there’s no creation of trust relationship between RISCO and Aznar et.al. The creation of an
express trust must be manifested with reasonable certainty and cannot be inferred from loose and
vague declarations or from ambiguous circumstances susceptible of other interpretations.

The court ruled that Aznar, et al., have no right to ask for the quieting of title of the properties at
issue because they have no legal and/or equitable rights over the properties that are derived from
the previous registered owner which is RISCO, the pertinent provision of the law is Section 2 of
the Corporation Code (Batas Pambansa Blg. 68), which states that corporation is an artificial
being created by operation of law, having the right of succession and the powers, attributes and
properties expressly authorized by law or incident to its existence.

As a consequence thereof, a corporation has a personality separate and distinct from those of its
stockholders and other corporations to which it may be connected. Thus, as ruled in Magsaysay-
Labrador v. Court of Appeals that the interest of the stockholders over the properties of the
corporation is merely inchoate and therefore does not entitle them to intervene in litigation
involving corporate property.

WHEREFORE, the petition of Aznar, et al.,in G.R. No. 172021 is DENIED for lack of merit.
The petition of PNB in G.R. No. 171805 is GRANTED. The Complaint, docketed as Civil Case
No. CEB-21511, filed by Azna-r, et al., is hereby DISMISSED.No costs.
 9. Ricardo S. Silverio and Esses Development Corporation and Tri-Stars Farms, Inc.

v. Filipino Business Consultants, Inc. 466 scra 584

G.R. No. 143312, 12 August 2005, FIRST DIVISION (Carpio, J.)

Silverio, Jr. is the President of Esses and Tri-Star. Esses and Tri-Star were in possession
of theCalatagan Property and registered in the names of Esses and Tri-Star. Esses and Tri-Star
executed a Deed of Sale with Assumption of Mortgage in favor of Filipino Business Consultants,
Inc. ("FBCI"). Esses and Tri-Star failed to redeem the Calatagan Property

· FBCI filed a Petition for Consolidation of Title of the Calatagan Property and subsequently, the
title in the names of Esses and Tri-Star was cancelled and a new title was issued in FBCI's name

· FBCI filed with the RTC an Urgent Ex-Parte Motion to Suspend Enforcement of Writ of
Possession. FBCI pointed out that it is now the new owner of Esses and Tri-Star having
purchased

the "substantial and controlling shares of stocks" of the two corporations. FBCI also informed
RTC that a new board of directors for Esses and Tri-Star had been convened following the
resignation of the members of the board of directors

ISSUE: Whether or not Land Bank correctly paid Monet’s suppliers despite discrepancies in the
shipped goods and Monet’s specifications

HELD: Properties registered in the n ame of the corporation are owned by it as an entity
separate and distinct from its members; While shares of stock constitute personal property,
they do not represent property of the corporation

· FBCI's acquisition of the "substantial and controlling shares of stocks" of Esses and Tri-Star
does not create a substantial change in the rights or relations of the parties that would entitle
FBCI to possession of the Calatagan Property, a corporate property of Esses and Tri-Star. Esses
and Tri- Star, just like FBCI, are corporations. A corporation has a personality distinct from that
of its stockholders
· A corporation is a juridical person distinct from the members composing it. Properties
registered in the name of the corporation are owned by it as an entity separate and distinct from
its members. While shares of stock constitute personal property, they do not represent property
of the corporation. The corporation has property of its own which consists chiefly of real estate

· Thus, FBCI's alleged controlling shareholdings in Esses and Tri-Star merely represent a
proportionate or aliquot interest in the properties of the two corporations. As a stockholder, FBCI
has an interest in Esses and Tri-Star's corporate properties that is only equitable or beneficial in
nature. Even assuming that FBCI is the controlling shareholder of Esses and Tri-Star, it does not
legally make it the owner of the Calatagan Property, which is legally owned by Esses and Tri-
Star as distinct juridical persons.
 10. Delima vs. Gois

FACTS:
- Petitioner Virgilio Delima filed a case for dismissal against Golden Union
aquamarine Corp., Prospero Gois and herein respondent Susan Mercaida Gois before
the NLRC.
- Labor Arbiter favored him.
- Golden failed to appeal and so the decision became final and executory. Likewise, a
writ of execution was issued and an Isuzu Jeep was attached, which vehicle was
registered in Susan Gois’ name.
- For this reason, Gois filed a third party claim claiming that the attachment was
irregular, the vehicle not belonging to Golden but was denied by the Labor arbiter.
- She filed an appeal with NLRC and at the same time filed a motion to release the
motor vehicle after substituting the same with a cash bond before the NLRC.
- L.A. ordered the release of the vehicle but NLRC denied appeal.
- MR was also denied and an Entry of Judgment was issued.
- She filed a petition for certiorari before CA invoking corporate fiction and was
granted.
- Hence, this petition by petitioner.

ISSUE: w/N Susan Gois is liable?

HELD: NO!

The rule is that obligations incurred by the corporation, acting through its officers and
employees are its sole liabilities.

Unless they have exceeded their authority, corporate officers are as a general rule, not
personally liable for their official acts because a corporation has a personality separate and
distinct from its officers, stockholders and members.

Thus, property belonging to a corporation cannot be attached to satisfy the debt of a stockholder
and vice versa, the latter having only an indirect interest in the assets and business of the
former.16
Since the Decision of the Labor Arbiter dated April 29, 2005 directed only Golden to pay the
petitioner the sum of P115,561.05 and the same was not joint and solidary obligation with Gois,
then the latter could not be held personally liable since Golden has a separate and distinct
personality of its own. It remains undisputed that the subject vehicle was owned by Gois, hence
it should not be attached to answer for the liabilities of the corporation. Unless they have
exceeded their authority, corporate officers are, as a general rule, not personally liable for their
official acts, because a corporation, by legal fiction, has a personality separate and distinct from
its officers, stockholders and members. No evidence was presented to show that the termination
of the petitioner was done with malice or in bad faith for it to hold the corporate officers, such as
Gois, solidarily liable with the corporation.