Boyer Vs Ca.docx

G.R. No. 100866 July 14, 1992 REBECCA BOYER-ROXAS and GUILLERMO ROXAS vs. HON. COURT OF APPEALS and HEIRS OF EUGENIA V. ROXAS, INC. FACTS: Plaintiff, Heirs of Eugenia V Roxas, Incorporated, was incorporated on December 4, 1962 (Exh. "C") with the primary purpose of engaging in agriculture to develop the properties inherited from Eugenia V. Roxas and that of y Eufrocino Roxas; that the Articles of Incorporation of the plaintiff, in 1971, was amended to allow it to engage in the resort business (Exh."C-1"); that the incorporators as original members of the board of directors of the plaintiff were all members of the same family, with Eufrocino Roxas having the biggest share; that accordingly, the plaintiff put up a resort known as Hidden Valley Springs Resort on a portion of its land located at Bo. Limao, Calauan, Laguna, and covered by TCT No. 32639 (Exhs. "A" and "A-l"); that improvements were introduced in the resort by the plaintiff and among them were cottages, houses or buildings, swimming pools, tennis court, restaurant and open pavilions; that the house near the Balugbugan Pool (Exh. "B-l") being occupied by Rebecca B. Roxas was originally intended as staff house but later used as the residence of Eriberto Roxas, deceased husband of the defendant Rebecca Boyer Roxas and father of Guillermo Roxas; that this house presently being occupied by Rebecca B. Roxas was built from corporate funds; that the construction of the unfinished house (Exh. "B-2") was started by the defendant Rebecca Boyer-Roxas and her husband Eriberto Roxas; that the third building (Exh. "B-3") presently being occupied by Guillermo Roxas was originally intended as a recreation hall but later converted as a residential house; that this house was built also from corporate funds; that the said house occupied by Guillermo Roxas when it was being built had nipa roofing but was later changed to galvanized iron sheets; that at the beginning, it had no partition downstairs and the second floor was an open space; that the conversion from a recreation hall to a r esidential house was with the knowledge of Eufrocino Roxas and was not objected to by any of the Board of Directors of the plaintiff; that most of the materials used in converting the building into a residential house came from the materials left by Coppola, a film producer, who filmed the movie "Apocalypse Now"; that Coppola left the materials as part of his payment for rents of the rooms that he occupied in the resort; that after the said recreation hall was converted into a residential house, defendant Guillermo Roxas moved in and occupied the same together with his family sometime in 1977 or 1978; that during the time Eufrocino Roxas was still alive, Eriberto Roxas was the general manager of the corporation and there was seldom any board meeting; that Eufrocino Roxas together with Eriberto Roxas were (sic ) the ones who

were running the corporation; that during this time, Eriberto Roxas was the restaurant and wine concessionaire of the resort; that after the death of Eufrocino Roxas, Eriberto Roxas continued as the general manager until his death in 1980; that after the death of Eriberto Roxas in 1980, the defendants Rebecca B. Roxas and Guillermo Roxas, committed acts that impeded the plaintiff's expansion and normal operation of the resort; that the plaintiff could not even use its own pavilions, kitchen and other facilities because of the acts of the defendants which led to the filing of criminal cases in court; that on August 27, 1983, because of the acts of the defendants, the Board of Directors of the plaintiff adopted Resolution No. 8312 series of 1983 (Exh. "F") authorizing the ejectment of the defendants from the premises occupied by them; that on September 1, 1983, demand letters were sent to Rebecca Bo yer-Roxas and Guillermo Roxas (Exhs. "D" and "D-1") demanding that they vacate the respective premises they occupy; and that the dispute between the plaintiff and the defendants was brought before the barangay level and the same was not settled. The petitioners point out that their occupancy of the staff house which was later used as the residence of Eriberto Roxas, husband of petitioner Rebecca Boyer-Roxas and the recreation hall which was converted into a residential house were with the blessings of Eufrocino Roxas, the deceased husband of Eugenia V. Roxas, who was the majority and controlling stockholder of the corporation. In his lifetime, Eufrocino Roxas together with Eriberto Roxas, the husband of petitioner Rebecca Boyer-Roxas, and the father of petitioner Guillermo Roxas managed the corporation. The Board of Directors did not object to such an arrangement. ISSUE: WON the authority thus given by Eufrocino Roxas for the conversion of the recreation hall into a residential house can no longer be questioned by the stockholders of the private respondent and/or its board of directors for they impliedly but no leas explicitly delegated such authority to said Eufrocino Roxas. HELD:

NO. Again, we must emphasize that the respondent corporation has a distinct personality separate from its members. The corporation transacts its business only through its officers or agents. (Western Agro-Industrial Corporation v. Court of Appeals, supra). Whatever authority these officers or agents may have is derived from the board of directors or other governing body unless conferred by the charter of the corporation. An officer's power as an agent of the corporation must be sought from the statute, charter, the by-laws or in a delegation of

authority to such officer, from the acts of the board of directors, formally expressed or implied from a habit or custom of doing business. (Vicente v. Geraldez, 52 SCRA 210 [1973]) In the present case, the record shows that Eufrocino V. Roxas who then controlled the management of the corporation, being the majority stockholder, consented to the petitioners' stay within the questioned properties. Specifically, Eufrocino Roxas gave his consent to the conversion of the recreation hall to a residential house, now occupied by petitioner Guillermo Roxas. The Board of Directors did not object to the actions of Eufrocino Roxas. The petitioners were allowed to stay within the questioned properties until August 27, 1983, when the Board of Directors approved a Resolution ejecting the petitioners, We find nothing irregular in the adoption of the Resolution by the Board of Directors. The petitioners' stay within the questioned properties was merely by tolerance of the respondent corporation in deference to the wishes of Eufrocino Roxas, who during his lifetime, controlled and managed the corporation. Eufrocino Roxas' actions could not have bound the corporation forever. The petitioners have not cited any provision of the corporation by-laws or any resolution or act of the Board of Directors which authorized Eufrocino Roxas to allow them to stay within the company premises forever. We rule that in the absence of any existing contract between the petitioners and the respondent corporation, the corporation may elect to eject the petitioners at any time it wishes for the benefit and interest of the respondent corporation. BOYER – ROXAS VS. COURT OF APPEALS 211 SCRA 470 (1992) FACTS OF THE CASE: When Eugenia V. Roxas died, her heirs formed a corporation under the name and style of Heirs of Eugenia V. Roxas, Inc. using her estate as the capital of the corporation, the private respondent herein. It was primarily engaged in agriculture business, however it amended its purpose to enable it to engage in resort and restaurant business. Petitioners are stockholders of the corporation and two of the heirs of Eugenia. By tolerance, they were allowed to occupy some of the properties of the corporation as their residence. However, the board of directors of the corporation passed a resolution evicting the petitioners from the property of the corporation because the same will be needed for expansion. At the RTC, private respondent presented its evidence averring that the subject premises are owned by the corporation. Petitioners failed to present their

evidence due to alleged negligence of their counsel. RTC handed a decision in favor of private respondent. Petitioners appealed to the Court of Appeals but the latter denied the petition and affirmed the ruling of the RTC. Hence, they appealed to the Supreme Court. In their appeal, petitioners argues that the CA made a mistake in upholding the decision of the RTC, and that their occupancy of the subject premises should be respected because they own an aliquot part of the corporation as stockholders, and that the veil of corporate fiction must be pierced by virtue thereof. ISSUE 1. Whether petitioner’s contention were correct as regards the piercing of the corporate veil. 2. Whether petitioners were correct in their contention that they should be respected as regards their occupancy since they own an aliquot part of the corporation. RULING 1.Petitioner’s contention to pierce the veil of corporate fiction is untenable. As aptly held by the court: “..The separate personality of a corporation may ONLY be disregarded when the corporation is used as a cloak or cover for fraud or illegality, or to work injustice, or when necessary to achieve equity or when necessary for the protection of creditors.” 2. As regards petitioners contention that they should be respected on their occupancy by virtue of an aliquot part they own on the corporation as stockholders, it also fails to hold water. The court held that “properties owned by a corporation are owned by it as an entity separate and distinct from its members. While shares of stocks are personal property, they do not represent property of the corporation. A share of stock only typifies an aliquot part of the corporation’s property, or the right to share in its proceeds to that extent when distributed according to law and equity, but its holder is not the owner of any part of the capital of the corporation. Nor is he entitled to the possession of any definite portion of its property or assets. The holder is not a co-owner or a tenant in common of the corporate property.”