Silverio v. Filipino Business Consultants, Inc.

Silverio v. Filipino Business Consultants, Inc.

(G.R. No. 143312, Aug. 12, 2005)

Carpio, J.:

Facts:

1.   Petitioner Silverio, Jr. is the President of two corporations namely Esses Devt. Corp., and Tristar Farms, Inc.

2.   The above-mentioned corporations were in possession of the Calatagan Property and registered in the names of Esses and Tristar.

3.   On Sept. 22, 1995, Esses and Tristar executed a Deed of Sale with Assumption of Mortgage in favor of Filipino Business Consultants, Inc. (FBCI). Esses and Tristar failed to redeem the Calatagan Property.

4.   On May 27, 1997, FBCI filed a Petition for Consolidation of Title of the Calatagan Property with RTC-Balayan.

5.   FBCI obtained a judgment by default. Subsequently, two land titles in the name of Esses and Tristar were cancelled and new land title was issued in favor of FBCI.

6.   On April 20, 1998, RTC-Balayan issued a writ of possession in FBCI’s  favor. The latter then entered the Calatagan Property.

7.   When Silverio, Jr., Esses and Tristar learned of the judgment by default and writ of possession, they filed a petition for relief from judgment and the recall of the writ of possession. Silverio et. al. alleged that the judgment by default is void because the RTC-Balayan did not acquire jurisdiction over them as a result of forged service of summons on them.

8.   On May 23, 2000, FBCI filed with RTC-Balayan 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 Tristar having purchased the “substantial and controlling shares of stocks” of the two corporations.

Issue:

Whether FBCI’s acquisition of shares of stocks of Esses and Tristar representing a controlling interest of the two corporations would also give FBCI a proprietary right over the Calatagan Property owned by both Esses Corp. and Tristar.

Ruling:

No. FBCI’s alleged controlling shareholdings in Esses and Tristar merely represent a proportionate interest in the properties of the two corporations. Such controlling shareholdings do not vest FBCI with any legal right or title to any of Esses and Tristar’s corporate properties.

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.