Sta. Monica Industrial and Development Corp. v. DAR

Sta. Monica Industrial and Development Corp. v. DAR

G.R. No. 164846

Facts:

1.   Asuncion Trinidad is the owner of five parcels of land with a total area of 4.69 hectares in Calumpit, Bulacan. Private respondent Basilio De Guzman is the agricultural leasehold tenant of Trinidad.

2.   As an agricultural leasehold tenant, De Guzman was issued certificates of Land Transfer on July 22, 1981.

3.   De Guzman filed a petition for the issuance of patent under his name with the Regional Office of DAR. The DAR sent notices to Trinidad requiring her to comment. Instead of complying, Trinidad filed a motion for bill of particulars.

4.   After due proceedings, the Regional Director of DAR issued the order granting Emancipation Patent in favor of De Guzman as qualified farmer-beneficiary of Agrarian Reform Program.

5.   Trinidad filed a motion for reconsideration, but her motion was denied.

6.   A year later, petitioner Sta. Monica filed a petition for certiorari and prohibition with CA assailing the order of DAR. Sta. Monica claimed that while it is true that Trinidad was the former owner of the disputed parcel of land, the said landholding was sold on Jan. 27, 1986 in favor of Sta. Monica.

7.   Sta. Monica asserted that there was a denial of due process because it was not furnished a notice of coverage under the CARP law.

8.   The CA dismissed the petition of Sta. Monica for lack of merit. The CA held that Sta. Monica is not a real party-in-interest because it cannot be considered as an owner of the land it bought from Trinidad.

Issue:

Whether Sta. Monica, a corporation with separate juridical personality has been denied of the opportunity of notice and hearing when the DAR awarded land ownership to an agrarian reform farmer-beneficiary, in the person of De Guzman.

Ruling:

No. The corporation Sta. Monica was not denied of the opportunity of notice and hearing. Trinidad is still deemed the owner of the agricultural land sold to Sta. Monica; no need for separate notice of coverage under CARP law.

Buyer Sta. Monica is owned and controlled by Trinidad and her family of which they own 98% of the outstanding capital stock. As owners of 98% of outstanding capital stock, they are beneficial owners of all the assets of the corporation including the agricultural land sold by Trinidad to Sta. Monica. At the very last, the notice to her is already a notice to Sta. Monica because the corporation acted as a mere conduit of Trinidad.

The sale of the land from Trinidad to Sta. Monica was a mere ploy to evade the applicable provisions of the agrarian law. But it is a fiat that the corporate vehicle cannot be used as a shield to protect fraud or justify wrong. Thus, the veil of corporate fiction will be pierced when it is used to defeat public convenience and subvert public policy.