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3C)&)3S))ATTY.)CARLO)BUSMENTE)
SAN)JUAN)STRUCTURAL)AND)STEEL)FABRICATION)vs.)CA)
G.R.)No.)129459))September)29,)1998)
)
FACTS:)
San! Juan! Structural! &! Steel! Fabricators! (San! Juan! for! brevity)! entered!
into!an!agreement!with!Motorich!Sales!Corporation!for!the!transfer!to!
it! of! a! parcel! of! land! identified! as! Lot! 30,! Block! 1! of! the! Acropolis!
Greens! Subdivision! located! in! the! District! of! Murphy,! Quezon! City,!
Metro! Manila.! San! Juan! paid! the! downpayment! in! the! sum! of! One!
Hundred!Thousand!(P100,!000.00)!Pesos.!!
!
San! Juan! was! ready! with! the! amount! corresponding! to! the! balance,!
covered! by! Metrobank! Cashier's! Check,! payable! to! Motorich! Sales!
Corporation! but! the! latters! treasurer,! Nenita! Lee! Gruenberg! did! not!
appear! during! their! supposed! meeting! in! San! Juans! office.! Despite!
repeated!demands,!Motorich!Sales!Corporation!refused!to!execute!the!
Transfer!of!Rights/Deed!of!Assignment!which!is!necessary!to!transfer!
the!certificate!of!title!in!favor!of!San!Juan.!
!
ACL! Development! Corporation! and! Motorich! Sales! Corporation!
entered! into! a! Deed! of! Absolute! Sale! whereby! the! former! transferred!
to!the!latter!the!subject!property.!The!Registry!of!Deeds!of!Quezon!City!
issued! a! new! title! in! the! name! of! Motorich! Sales! Corporation,!
represented! by! treasurer! Nenita! Lee! Gruenberg! and! Reynaldo! L!
Gruenberg,!President!and!Chairman!of!Motorich.!
!
By! reason! of! Motorichs! bad! faith! in! refusing! to! execute! a! Transfer! of!
Rights/Deed! of! Assignment! in! favor! of! San! Juan,! the! latter! lost! the!
opportunity! to! construct! a! residential! building! in! the! sum! of!
P100,000.00.!Hence,!San!Juan!filed!a!complaint!against!Motorich!Sales.!
)
RTC:!
Dismissed!the!complaint!ruling!that!!there!is!no!evidence!to!show!that!
defendant!Nenita!Lee!Gruenberg!was!indeed!authorized!by!defendant!
corporation.!
)
CA:!!
Affirmed! the! Decision! of! the! RTC! with! the! modification! that!
Respondent!Nenita!Lee!Gruenberg!was!ordered!to!refund!P100,000!to!
petitioner,! the! amount! remitted! as! "downpayment"! or! "earnest!
money."!
!
1.
ISSUE:))
Was! there! a! valid! contract! of! sale! between! petitioner! and! Motorich?!
None.!
!
Section!23!of!BP!68!provides:!
"SEC.! 23.! The, Board, of, Directors, or, Trustees.! ! Unless! otherwise!
provided! in! this! Code,! the! corporate! powers! of! all! corporations!
formed!under!this!Code!shall!be!exercised,!all!business!conducted!and!
all!property!of!such!corporations!controlled!and!held!by!the!board!of!
directors!or!trustees!to!be!elected!from!among!the!holders!of!stocks,!
or! where! there! is! no! stock,! from! among! the! members! of! the!
corporation,! who! shall! hold! office! for! one! (1)! year! and! until! their!
successors!are!elected!and!qualified."!
!
Indubitably,!a!corporation!may!act!only!through!its!board!of!directors!
or,! when! authorized! either! by! its! bylaws! or! by! its! board! resolution,!
through! its! officers! or! agents! in! the! normal! course! of! business.! The!
general! principles! of! agency! govern! the! relation! between! the!
corporation! and! its! officers! or! agents,! subject! to! the! articles! of!
!CORPO!CASE!DIGESTS!3C!&!3S!!||!! 1!
CORPORATION)LAW)CASE)DIGESTS)
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3C)&)3S))ATTY.)CARLO)BUSMENTE)
incorporation,!bylaws,!or!relevant!provisions!of!law.!Thus,!this!Court!
has! held! that! "! 'a! corporate! officer! or! agent! may! represent! and! bind!
the! corporation! in! transactions! with! third! persons! to! the! extent! that!
the!authority!to!do!so!has!been!conferred!upon!him,!and!this!includes!
powers! which! have! been! intentionally! conferred,! and! also! such!
powers! as,! in! the! usual! course! of! the! particular! business,! are!
incidental! to,! or! may! be! implied! from,! the! powers! intentionally!
conferred,!powers!added!by!custom!and!usage,!as!usually!pertaining!
to! the! particular! officer! or! agent,! and! such! apparent! powers! as! the!
corporation! has! caused! persons! dealing! with! the! officer! or! agent! to!
believe!that!it!has!conferred.!
!
Unless!duly!authorized,!a!treasurer,!whose!powers!are!limited,!cannot!
bind! the! corporation! in! a! sale! of! its! assets.! In! the! case! at! bar,!
Respondent! Motorich! categorically! denies! that! it! ever! authorized!
Nenita! Gruenberg,! its! treasurer,! to! sell! the! subject! parcel! of! land.!
Consequently,! petitioner! had! the! burden! of! proving! that! Nenita!
Gruenberg! was! in! fact! authorized! to! represent! and! bind! Motorich! in!
the!transaction.!Petitioner!failed!to!discharge!this!burden.!Its!offer!of!
evidence!before!the!trial!court!contained!no!proof!of!such!authority.!It!
has! not! shown! any! provision! of! said! respondent's! articles! of!
incorporation,! bylaws! or! board! resolution! to! prove! that! Nenita!
Gruenberg! possessed! such! power.! That! Nenita! Gruenberg! is! the!
treasurer!of!Motorich!does!not!free!petitioner!from!the!responsibility!
of! ascertaining! the! extent! of! her! authority! to! represent! the!
corporation.! Petitioner! cannot! assume! that! she,! by! virtue! of! her!
position,!was!authorized!to!sell!the!property!of!the!corporation.!!
!
Selling!is!obviously!foreign!to!a!corporate!treasurer's!function,!which!
generally!has!been!described!as!"to!receive!and!keep!the!funds!of!the!
corporation! and! to! disburse! them! in! accordance! with! the! authority!
given! him! by! the! board! or! the! properly! authorized! officers."! Neither!
was! such! real! estate! sale! shown! to! be! a! normal! business! activity! of!
Motorich.!The!primary!purpose!of!Motorich!is!marketing,!distribution,!
export! and! import! in! relation! to! a! general! merchandising! business.!
Unmistakably,! its! treasurer! is! not! cloaked! with! actual! or! apparent!
authority! to! buy! or! sell! real! property,! an! activity! which! falls! way!
beyond!the!scope!of!her!general!authority.!
1.1. Petitioner)further)contends)that)Respondent)Motorich)
has) ratified) said) contract) of) sale) because) of) its)
"acceptance) of) benefits,") as) evidenced) by) the) receipt)
issued)by)Respondent)Gruenberg.)
As! a! general! rule,! the! acts! of! corporate! officers! within! the! scope! of!
their! authority! are! binding! on! the! corporation.! But! when! these!
officers! exceed! their! authority,! their! actions! "cannot! bind! the!
corporation,! unless! it! has! ratified! such! acts! or! is! estopped! from!
disclaiming!them."!
!
EFFECT:!Because!Motorich!had!never!given!a!written!authorization!to!
Respondent! Gruenberg! to! sell! its! parcel! of! land,! the!
Agreement! entered! into! by! the! latter! with! petitioner! is! void!
under! Article! 1874! of! the! Civil! Code.! Being! inexistent! and!
void!from!the!beginning,!said!contract!cannot!be!ratified.!
2. Petitioner)also)argues)that)the)veil)of)corporate)fiction)of)
Motorich) should) be) pierced,) because) the) latter) is) a) close)
corporation.) Since) "Spouses) Reynaldo) L.) Gruenberg) and)
Nenita)R.)Gruenberg)owned)all)or)almost)all)or)99.866%)to)
be) accurate,) of) the) subscribed) capital) stock")of) Motorich,)
petitioner)argues)that)Gruenberg)needed)no)authorization)
from)the)board)to)enter)into)the)subject)contract.))It)adds)
that,) being) solely) owned) by) the) Spouses) Gruenberg) the)
company) can) be) treated) as) a) close&corporation) which) can)
be) bound) by) the) acts) of) its) principal) stockholder) who)
needs)no)specific)authority.)
!
ISSUE:!!!
May!the!doctrine!of!piercing!the!veil!of!corporate!fiction!be!applied!to!
Motorich?!No.!
!
Text
!CORPO!CASE!DIGESTS!3C!&!3S!!||!! 2!
CORPORATION)LAW)CASE)DIGESTS)
Text
3C)&)3S))ATTY.)CARLO)BUSMENTE)
Petitioner!utterly!failed!to!establish!that!said!corporation!was!formed,!
or! that! it! is! operated,! for! the! purpose! of! shielding! any! alleged!
fraudulent! or! illegal! activities! of! its! officers! or! stockholders;! or! that!
the! said! veil! was! used! to! conceal! fraud,! illegality! or! inequity! at! the!
expense!of!third!persons!like!petitioner.!
!
2.1. Petitioner)claims)that)Motorich)is)a)close)corporation.)
No.! Section! 96! of! the! Corporation! Code! defines! a! close!
corporation!as!follows:!
!
"SEC.! 96.! Definition, and, Applicability, of, Title.! ! A!
close! corporation,! within! the! meaning! of! this! Code,! is! one!
whose!articles!of!incorporation!provide!that:!!
(1)!All!of!the!corporation's!issued!stock!of!all!classes,!
exclusive! of! treasury! shares,! shall! be! held! of! record! by! not!
more! than! a! specified! number! of! persons,! not! exceeding!
twenty!(20);!!
!
(2)!All!of!the!issued!stock!of!all!classes!shall!be!subject!
to!one!or!more!specified!restrictions!on!transfer!permitted!by!
this!Title;!and!!
!
(3)! The! corporation! shall! not! list! in! any! stock!
exchange!or!make!any!public!offering!of!any!of!its!stock!of!any!
class.! Notwithstanding! the! foregoing,! a! corporation! shall! be!
deemed!not!a!close!corporation!when!at!least!twohthirds!(2/3)!
of! its! voting! stock! or! voting! rights! is! owned! or! controlled! by!
another! corporation! which! is! not! a! close! corporation! within!
the!meaning!of!this!Code!.!.!."!
!
The! articles! of! incorporation)of! Motorich! Sales! Corporation! does! not!
contain! any! provision! stating! that! (1)! the! number! of! stockholders!
shall! not! exceed! 20,! or! (2)! a! preemption! of! shares! is! restricted! in!
favor!of!any!stockholder!or!of!the!corporation,!or!(3)!listing!its!stocks!
in! any! stock! exchange! or! making! a! public! offering! of! such! stocks! is!
prohibited.! From! its! articles,! it! is! clear! that! Respondent! Motorich! is!
not! a! close! corporation.)Motorich! does! not! become! one! either,! just!
because!Spouses!Reynaldo!and!Nenita!Gruenberg!owned!99.866%!of!
its! subscribed! capital! stock.! The! [m]ere! ownership! by! a! single!
stockholder!or!by!another!corporation!of!all!or!nearly!all!of!the!capital!
stock! of! a! corporation! is! not! of! itself! sufficient! ground! for!
disregarding!the!separate!corporate!personalities."!)So,!too,!a!narrow!
distribution! of! ownership! does! not,! by! itself,! make! a! close!
corporation.!
!
ADD`ON:))
!
The!Court!is!not!unaware!that!there!are!exceptional!cases!where!"an!
action!by!a!director,!who!singly!is!the!controlling!stockholder,!may!be!
considered! as! a! binding! corporate! act! and! a! board! action! as! nothing!
more!than!a!mere!formality."!!The!present!case,!however,!is!not!one!of!
them.!!
!
As!stated!by!petitioner,!Spouses!Reynaldo!and!Nenita!Gruenberg!own!
"almost! 99.866%"! of! Respondent! Motorich.!Since! Nenita! is! not! the!
sole! controlling! stockholder! of! Motorich,! the! aforementioned!
exception!does!not!apply.!
Text
)
MANUEL)R.)DULAY)ENTERPRISES)vs.)CA)
G.R.)No.)91889))August)27,)1993)
)
FACTS:)
Petitioner! Manuel! R.! Dulay! Enterprises,! Inc,! a! domestic! corporation!
with! the! following! as! members! of! its! Board! of! Directors:! Manuel! R.!
Dulay! with! 19,960! shares! and! designated! as! president,! treasurer! and!
general!manager,!Atty.!Virgilio!E.!Dulay!with!10!shares!and!designated!
as!vicehpresident;!Linda!E.!Dulay!with!10!shares;!Celia!DulayhMendoza!
with!10!shares;!and!Atty.!Plaridel!C.!Jose!with!10!shares!and!designated!
as!secretary,!owned!a!property!covered!by!TCT!No.!17880!4)and!known!
as!Dulay!Apartment!consisting!of!sixteen!(16)!apartment!units!on!a!six!
hundred! eightyhnine! located! at! Seventh! Street! (now! Buendia!
!CORPO!CASE!DIGESTS!3C!&!3S!!||!!
3!
Text
CORPORATION)LAW)CASE)DIGESTS)
Text
3C)&)3S))ATTY.)CARLO)BUSMENTE)
Extension)!and!F.B.!Harrison!Street,!Pasay!City.!
!
Petitioner! corporation! through! its! president,! Manuel! Dulay,! obtained!
various! loans! for! the! construction! of! its! hotel! project,! Dulay!
Continental!Hotel!(now!Frederick!Hotel).!It!even!had!to!borrow!money!
from!petitioner!Virgilio!Dulay!to!be!able!to!continue!the!hotel!project.!
As! a! result! of! said! loan,! petitioner! Virgilio! Dulay! occupied! one! of! the!
unit! apartments! of! the! subject! property! since! property! since! 1973!
while! at! the! same! time! managing! the! Dulay! Apartment! at! his!
shareholdings! in! the! corporation! was! subsequently! increased! by! his!
father.!5)
!
On! December! 23,! 1976,! Manuel! Dulay! by! virtue! of! Board! Resolution!
!No!18)6) of!petitioner!corporation!sold!the!subject!property!to!private!
respondents! spouses! Maria! Theresa! and! Castrense! Veloso! in! the!
amount! of! P300,000.00! as! evidenced! by! the! Deed! of! Absolute! Sale.) 7)
Thereafter,! TCT! No.! 17880! was! cancelled! and! TCT! No.! 23225! was!
issued! to! private! respondent! Maria! Theresa! Veloso.! 8! Subsequently,!
Manuel! Dulay! and! private! respondents! spouses! Veloso! executed! a!
Memorandum! to! the! Deed! of! Absolute! Sale! of! December! 23,! 1976! 9)
dated!December!9,!1977!giving!Manuel!Dulay!within!(2)!years!or!until!
December!9,!1979!to!repurchase!the!subject!property!for!P200,000.00!
which!was,!however,!not!annotated!either!in!TCT!No.!17880!or!TCT!No.!
23225.!
!
On!December!24,!1976,!private!respondent!Maria!Veloso,!without!the!
knowledge!of!Manuel!Dulay,!mortgaged!the!subject!property!to!private!
respondent!Manuel!A.!Torres!for!a!loan!of!P250,000.00!which!was!duly!
annotated!as!Entry!No.!68139!in!TCT!No.!23225.!10)
!
Upon! the! failure! of! private! respondent! Maria! Veloso! to! pay! private!
respondent! Torres,! the! subject! property! was! sold! on! April! 5,! 1978! to!
private! respondent! Torres! as! the! highest! bidder! in! an! extrajudicial!
foreclosure! sale! as! evidenced! by! the! Certificate! of! Sheriff's! Sale! 11)
issued!on!April!20,!1978.!
!
On!July!20,!1978,!private!respondent!Maria!Veloso!executed!a!Deed!of!
Absolute! Assignment! of! the! Right! to! Redeem! 12) in! favor! of! Manuel!
Dulay! assigning! her! right! to! repurchase! the! subject! property! from!
private!respondent!Torres!as!a!result!of!the!extra!sale!held!on!April!25,!
1978.!
!
As! neither! private! respondent! Maria! Veloso! nor! her! assignee! Manuel!
Dulay! was! able! to! redeem! the! subject! property! within! the! one! year!
statutory! period! for! redemption,! private! respondent! Torres! filed! an!
Affidavit!of!Consolidation!of!Ownership!13)with!the!Registry!of!Deeds!of!
Pasay! City! and! TCT! No.! 24799! 14) was! subsequently! issued! to! private!
respondent!Manuel!Torres!on!April!23,!1979.!
!
On!October!1,!1979,!private!respondent!Torres!filed!a!petition!for!the!
issuance! of! a! writ! of! possession! against! private! respondents! spouses!
Veloso! and! Manuel! Dulay! in! LRC! Case! No.! 1742hP.! However,! when!
petitioner! Virgilio! Dulay! was! never! authorized! by! the! petitioner!
corporation! to! sell! or! mortgage! the! subject! property,! the! trial! court!
ordered! private! respondent! Torres! to! implead! petitioner! corporation!
as!an!indispensable!party!but!the!latter!moved!for!the!dismissal!of!his!
petition!which!was!granted!in!an!Order!dated!April!8,!1980.!
!
On! June! 20,! 1980,! private! respondent! Torres! and! Edgardo! Pabalan,!
real! estate! administrator! of! Torres,! filed! an! action! against! petitioner!
corporation,! Virgilio! Dulay! and! Nepomuceno! Redovan,! a! tenant! of!
Dulay! Apartment! Unit! No.! 8hA! for! the! recovery! of! possession,! sum! of!
money! and! damages! with! preliminary! injunction! in! Civil! Case,! No.!
8198hP!with!the!then!Court!of!First!Instance!of!Rizal.!
!
On!July!21,!1980,!petitioner!corporation!filed!an!action!against!private!
respondents! spouses! Veloso! and! Torres! for! the! cancellation! of! the!
Certificate!of!Sheriff's!Sale!and!TCT!No.!24799!in!Civil!Case!No.!8278hP!
with!the!then!Court!of!First!Instance!of!Rizal.!
!
On!January!29,!1981,!private!respondents!Pabalan!and!Torres!filed!an!
action! against! spouses! Florentino! and! Elvira! Manalastas,! a! tenant! of!
Text
!CORPO!CASE!DIGESTS!3C!&!3S!!||!! 4!
CORPORATION)LAW)CASE)DIGESTS)
Text
3C)&)3S))ATTY.)CARLO)BUSMENTE)
Dulay! Apartment! Unit! No.! 7hB,! with! petitioner! corporation! as!
intervenor!for!ejectment!in!Civil!Case!No.!38h81!with!the!Metropolitan!
Trial!Court!of!Pasay!City!which!rendered!a!decision!on!April!25,!1985!
!
PETITIONERS)CONTENTION:)
Petitioners! contend! that! the! respondent! court! had! acted! with! grave!
abuse!of!discretion!when!it!applied!the!doctrine!of!piercing!the!veil!of!
corporate! entity! in! the! instant! case! considering! that! the! sale! of! the!
subject! property! between! private! respondents! spouses! Veloso! and!
Manuel!Dulay!has!no!binding!effect!on!petitioner!corporation!as!Board!
Resolution! No.! 18! which! authorized! the! sale! of! the! subject! property!
was!resolved!without!the!approval!of!all!the!members!of!the!board!of!
directors! and! said! Board! Resolution! was! prepared! by! a! person! not!
designated!by!the!corporation!to!be!its!secretary.!
!
ISSUE:)
Whether!or!not!the!sale!of!the!subject!property!has!no!binding!effect!as!
Board! Resolution,! which! authorized! the! sale! of! the! subject! property,!
was!resolved!without!the!approval!of!all!the!members!of!the!Board.!!
!
HELD:)
The!court!did!not!agree.!!
!
Section!101!of!the!Corporation!Code!of!the!Philippines!provides:!
!
Sec.& 101.& When& board& meeting& is& unnecessary& or& improperly& held.&
Unless&the&by:laws&provide&otherwise,&any&action&by&the&directors&of&
a&close&corporation&without&a&meeting&shall&nevertheless&be&deemed&
valid&if:&
&
1.& Before& or& after& such& action& is& taken,& written& consent& thereto& is&
signed&by&all&the&directors,&or&
&
2.& All& the& stockholders& have& actual& or& implied& knowledge& of& the&
action&and&make&no&prompt&objection&thereto&in&writing;&or&
&
3.& The& directors& are& accustomed& to& take& informal& action& with& the&
express&or&implied&acquiese&of&all&the&stockholders,&or&
Text &
4.&All&the&directors&have&express&or&implied&knowledge&of&the&action&
in& question& and& none& of& them& makes& prompt& objection& thereto& in&
writing.&
&
If&a&directors'&meeting&is&held&without&call&or¬ice,&an&action&taken&
therein& within& the& corporate& powers& is& deemed& ratified& by& a&
director& who& failed& to& attend,& unless& he& promptly& files& his& written&
objection& with& the& secretary& of& the& corporation& after& having&
knowledge&thereof.&
&
In! the! instant! case,! petitioner! corporation! is! classified! as! a! close!
corporation! and! consequently! a) board) resolution) authorizing) the)
sale)or)mortgage)of)the)subject)property)is)not)necessary)to)bind)
the) corporation) for) the) action) of) its) president.! At! any! rate,!
corporate!action!taken!at!a!board!meeting!without!proper!call!or!notice!
in!a!close!corporation!is!deemed!ratified!by!the!absent!director!unless!
the!latter!promptly!files!his!written!objection!with!the!secretary!of!the!
corporation!after!having!knowledge!of!the!meeting!which,!in!his!case,!
petitioner!Virgilio!Dulay!failed!to!do.!
)
Petitioners'!claim!that!the!sale!of!the!subject!property!by!its!president,!
Manuel!Dulay,!to!private!respondents!spouses!Veloso!is!null!and!void!
as! the! alleged! Board) Resolution) No.) 18) was) passed) without) the)
knowledge) and) consent) of) the) other) members) of) the) board) of)
directors)cannot)be)sustained.!!
As)correctly)pointed)out)by)the)respondent)Court)of)Appeals:)
Appellant, Virgilio, E., Dulay's, protestations, of, complete, innocence, to, the,
effect,that,he,never,participated,nor,was,even,aware,of,any,meeting,or,
resolution, authorizing, the, mortgage, or, sale, of, the, subject, premises, is,
difficult, to, believe., On, the, contrary,, he, is, very, much, privy, to, the,
transactions,involved.,To,begin,with,,he,is,a,incorporator,and,one,of,the,
board,of,directors,designated,at,the,time,of,the,organization,of,Manuel,
!CORPO!CASE!DIGESTS!3C!&!3S!!||!!Text
5!
Text
CORPORATION)LAW)CASE)DIGESTS)
Text
3C)&)3S))ATTY.)CARLO)BUSMENTE)
R., Dulay, Enterprise,, Inc., In, ordinary, parlance,, the, said, entity, is, loosely,
referred,to,as,a,"family,corporation".,
,
Besides,! the! fact! that! petitioner! Virgilio! Dulay! on! June! 24,! 1975!
executed!an!affidavit!that!he!was!a!signatory!witness!to!the!execution!
of!the!posthdated!Deed!of!Absolute!Sale!of!the!subject!property!in!favor!
of! private! respondent! Torres! indicates! that! he! was! aware! of! the!
transaction! executed! between! his! father! and! private! respondents! and!
had,! therefore,! adequate! knowledge! about! the! sale! of! the! subject!
property!to!private!respondents.!
!
Consequently,!petitioner)corporation)is)liable)for)the)act)of)Manuel)
Dulay)and)the)sale)of)the)subject)property)to)private)respondents)
by)Manuel)Dulay)is)valid)and)binding.!!
!
As)stated)by)the)trial)court:)
,
., ., ., the, sale, between, Manuel, R., Dulay, Enterprises,, Inc., and, the, spouses,
Maria,Theresa,V.,Veloso,and,Castrense,C.,Veloso,,was,a,corporate,act,of,
the,former,and,not,a,personal,transaction,of,Manuel,R.,Dulay.,This,is,so,
because,Manuel,R.,Dulay,was,not,only,president,and,treasurer,but,also,
the, general, manager, of, the, corporation., The, corporation, was, a, closed,
family, corporation, and, the, only, nonHrelative, in, the, board, of, directors,
was,Atty.,Plaridel,C.,Jose,who,appeared,on,paper,as,the,secretary.,There,
is, no, denying, the, fact,, however,, that, Maria, Socorro, R., Dulay, at, times,
acted, as, secretary., ., ., .,, the, Court, can, not, lose, sight, of, the, fact, that, the,
Manuel, R., Dulay, Enterprises,, Inc., is, a, closed, family, corporation, where,
the,incorporators,and,directors,belong,to,one,single,family.,It,cannot,be,
concealed, that, Manuel, R., Dulay, as, president,, treasurer, and, general,
manager,almost,had,absolute,control,over,the,business,and,affairs,of,the,
corporation.,,
,
OTHER)ISSUE:)
Petitioners'!contention!that!private!respondent!Torres!never!acquired!
ownership! over! the! subject! property! since! the! latter! was! never! in!
actual! possession! of! the! subject! property! nor! was! the! property! ever!
delivered!to!him!is!also!without!merit.!
!
Paragraph)1,)Article)1498)of)the)New)Civil)Code)provides:)
When,the,sale,is,made,through,a,public,instrument,,the,execution,thereof,
shall,be,equivalent,to,the,delivery,of,the,thing,which,is,the,object,of,the,
contract,, if, from, the, deed, the, contrary, do, not, appear, or, cannot, clearly,
be,inferred.,
!
Therefore,!prior!physical!delivery!or!possession!is!not!legally!required!
since! the! execution! of! the! Deed! of! Sale! in! deemed! equivalent! to!
delivery.,
,
!CORPO!CASE!DIGESTS!3C!&!3S!!||!! 6!
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