G.R. No. 143312, 12 August 2005

FACTS:

The parties are wrangling over possession of a 62 hectare-land in Calatagan, Batangas after Esses and Tri-Star failed to redeem the Calatagan Property from FBCI. During the pendency of the case, FBCI filed with the 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 Tri-Star having purchased the substantial and controlling shares of stocks of the two corporations. It claimed that since it is now the owner of the controlling shares of stocks, the property must be awarded in its favor.

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.

As a stockholder, FBCI has an interest in Esses and Tri-Star’s corporate properties that is only equitable or beneficial in nature. Even assuming that FBCI is the controlling shareholder of Esses and Tri-Star, it does not legally make it the owner of the Calatagan Property, which is legally owned by Esses and Tri-Star as distinct juridical persons. As such, FBCI is not entitled to the possession of any definite portion of the Calatagan Property or any of Esses and Tri-Star’s properties or assets. FBCI is not a co-owner or tenant in common of the Calatagan Property or any of Esses and Tri-Star’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.

*Case digest by Earl M. Acoymo, Refresher, Andres Bonifacio Law School, SY 2019-2020