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 Monets suppliers despite discrepancies in the shipped goods and Monets 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.

Land Bank of the Philippines v. CA, ECO Management Corporation and Emmanuel Oate G.R. No. 127181, 4 September 2001, SECOND DIVISION (Quisumbing, J.) Land Bank of the Philippines (LBP) extended a series of credit accommodations to appellee ECO, using the trust funds of the Philippine Virginia Tobacco Administration (PVTA). The proceeds of the credit accommodations were received on behalf of ECO by appellee Oate On the respective maturity dates of the loans, ECO failed to pay the same. Oral and written demands were made, but ECO was unable to pay. ECO claims that the company was in financial difficulty for it was unable to collect its investments with companies which were affected by the financial crisis brought about by the Dewey Dee scandal ECO proposed and submitted to LBP a "Plan of Payment" whereby the former would set up a financing company which would absorb the loan obligations. It was proposed that LBP would participate in the scheme through the conversion of P9,000,000.00 which was part of the total loan, into equity. LBP approved the payment plan but stated that it shall not participate in the undertaking in any manner whatsoever ECO submitted to LBP a "Revised Plan of Payment" deleting the latter's participation in the proposed financing company, however, LBP resolved to reject it. LBP then sent a letter to the PVTA for the latter's comments stating that if PVTA does not responde within five (5) days from the latter's receipt of the letter, such silence would be construed to be an approval of LBP's intention to file suit against ECO and its corporate officers. PVTA did not respond to the letter Landbank filed a complaint for Collection of Sum of Money against ECO and Emmanuel C. Oate ISSUE: Whether or not the corporate veil of ECO Management Corporation should be pierced and Oate be held liable for the amount of the judgment HELD: Mere ownership by a single stockholder of all or nearly all of the capital stock of a corporation is not by itself sufficient reason for disregarding the fiction of separate corporate personalities; A corporation may assume any name provided it is lawful. There is nothing illegal in