Case Digest (G.R. No. 91889) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
Manuel R. Dulay Enterprises, Inc., a close family corporation, owned a sixteen‐unit apartment building in Pasay City under TCT No. 17880. Its president and majority shareholder, Manuel R. Dulay, obtained loans for a hotel project, borrowing even from his son, Virgilio E. Dulay, who lived in and managed one of the units. On December 23, 1976, by Board Resolution No. 18, the corporation allegedly sold the property to spouses Maria Theresa and Castrense Veloso for ₱300,000, cancelling TCT No. 17880 and issuing TCT No. 23225 to Maria Veloso. A non‐annotated option to repurchase within two years for ₱200,000 was later executed. Unbeknownst to Manuel Dulay, Maria Veloso mortgaged the property to Manuel A. Torres for ₱250,000 on December 24, 1976, and upon her default, an extrajudicial foreclosure on April 5, 1978 resulted in Torres’s acquisition and the issuance of TCT No. 24799 on April 23, 1979. Torres filed for possession and ejectment suits against the Dulays and other tenants, wh Case Digest (G.R. No. 91889) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Corporate background and property
- Manuel R. Dulay Enterprises, Inc. was a close family corporation with Manuel R. Dulay (19,960 shares, president/treasurer/general manager), Virgilio E. Dulay (10 shares, vice-president), and other relatives as directors. The corporation owned the Dulay Apartment on a 689 sqm lot in Pasay City (TCT No. 17880).
- To finance the Dulay Continental Hotel project, the corporation obtained various loans, including advances from Virgilio Dulay, who subsequently occupied and managed one apartment unit as partial compensation.
- Sale, mortgage, and foreclosure
- By Board Resolution No. 18 (Dec. 23, 1976), the corporation, through its president, sold the Dulay Apartment to spouses Maria Theresa and Castrense Veloso for ₱300,000 (Deed of Absolute Sale; TCT No. 23225). A separate Memorandum granted Manuel Dulay an unannotated option to repurchase for ₱200,000 until December 9, 1979.
- Without Manuel Dulay’s knowledge, Maria Veloso mortgaged the property to Manuel A. Torres for ₱250,000 (annotated in TCT). Upon her default, the property was extrajudicially foreclosed (Apr. 5, 1978), sold to Torres, and, after the one-year redemption period lapsed, Torres consolidated ownership and obtained TCT No. 24799 (Apr. 23, 1979).
- Proceedings below
- Torres sought a writ of possession (LRC Case No. 1742-P), but when Virgilio Dulay intervened, the court ordered impleader of the corporation; petition was dismissed (Apr. 8, 1980).
- Three actions ensued: (a) Civil Case No. 8198-P—Torres and Edgardo Pabalan sued for possession, rents, damages, injunction; (b) Civil Case No. 8278-P—the corporation sought cancellation of the sheriff’s sale and reconveyance; (c) Civil Case No. 2880-P—the corporation and Virgilio Dulay annulled the MTC’s ejectment decision (Civil Case No. 38-81).
- The RTC dismissed the corporation’s and Dulay’s claims and granted relief to Torres/Pabalan. The Court of Appeals affirmed (Oct. 23, 1989) and denied reconsideration (Jan. 26, 1990). Petitioners then sought certiorari relief in the Supreme Court.
Issues:
- Whether the sale of corporate property by the president, without a properly convened board meeting or resolution, validly bound the close corporation.
- Whether Manuel A. Torres acquired vested ownership and a right to possession of the property despite no physical delivery before the redemption period expired.
- Whether the corporate veil properly could be pierced to hold the corporation liable for the acts of its president.
- Whether the Court of Appeals erred in resolving the motion for reconsideration absent the private respondents’ comment.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)