July 14, 1992
Petitioner Heirs of Eugenia Roxas Inc. prayed for the ejectment of Rebecca Boyer-Roxas and Guillermo Roxas from buildings inside the Hidden Valley Springs Resort in Laguna allegedly owned by the respondent corporation. The Corp alleged they spent for the house of Rebecca and merely tolerated her occupation while Guillermo converted the recreation hall into his house. Rebecca and Guillermo’s defense was that they are also heirs of Eugenia Roxas and therefore co-owners of the Resort.
Lower courts favored the Heirs Inc. Rebecca Roxas et al appealed to SC contending that they “pierced the corporate veil” because they are owners of the aliquot (part) of the properties/assets of the Corp. Their ownership gives them right to possess.
Are the properties of the corporation also the properties of Rebecca and Guillermo as stockholders?
No. 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 the personal property, they do not represent (real) properties of the corporation.
A share of stock does not entitle its holder to the possession of any definite portion of the Corp’s property or assets. The stockholder is not a co-owner or tenant in common of the corporate property.
No provision in bylaws or board resolution allows them to stay. Hence, they were merely tolerated.
The doctrine of piercing the corporate veil is untenable because it may only be regarded 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.”
However, Rebecca was a good faith builder under Article 453 of the NCC.