Title
Boyer-Roxas vs. Court of Appeals
Case
G.R. No. 100866
Decision Date
Jul 14, 1992
Petitioners, heirs of Eugenia V. Roxas, claimed co-ownership of corporate property but were ordered to vacate. Court upheld corporate separateness, denied due process claim, and applied Article 448 for unfinished building.

Case Summary (G.R. No. 100866)

Petitioners’ Position

Petitioners claimed status as heirs of Eugenia V. Roxas and therefore as co‑owners (stockholders) of the corporation owning the resort; they asserted a right to remain in occupancy of the subject houses as part owners or by virtue of implied authorization given during prior management.

Respondent Corporation’s Position

Heirs of Eugenia V. Roxas, Inc. alleged that the petitioners occupied corporate property only by tolerance, that the houses (one unfinished) were constructed at corporate expense, that petitioners never paid rent, and that demand letters and a board resolution authorizing ejectment were issued when corporate management sought expansion and proper operation of the resort.

Key Dates and Procedural Milestones

  • Incorporation of respondent corporation: December 4, 1962; Articles amended 1971 to permit resort operation.
  • Board Resolution authorizing ejectment: August 27, 1983.
  • Demand letters to petitioners: September 1, 1983.
  • RTC decision rendered: January 15, 1987 (trial court ordered ejectment, rents, removal of unfinished building, and costs).
  • CA affirmed RTC decision; petitioners’ motion for reconsideration denied.
  • Supreme Court decision: July 14, 1992 (petition partly granted and modification ordered).
    (Constitutional basis applied: 1987 Constitution, consistent with the decision date.)

Applicable Law and Precedents Relied Upon

Primary statutory provisions applied: Civil Code, especially Article 448 (rights of landowner when something built in good faith) and Article 453 (treatment when both builder and owner acted in bad faith). Corporate law principles cited: separate juridical personality of a corporation and the narrow circumstances for piercing the corporate veil. Controlling jurisprudence quoted or cited in the decision included Aguila, Legarda, Escudero, Western Agro Industrial Corporation v. Court of Appeals, Stockholders of F. Guanzon and Sons, Inc. v. Register of Deeds of Manila, Vicente v. Geraldez, and related authorities contained in the record.

Issues Presented to the Supreme Court

(1) Whether the corporate veil should be pierced so petitioners’ alleged aliquot ownership of corporate assets would sustain their possession; (2) whether petitioners were denied due process because of the gross negligence of their counsel; and (3) whether petitioner Rebecca, as a builder in good faith who financed the unfinished building, was improperly ordered to remove it and to pay rent.

Facts Found at Trial

The RTC accepted testimony and exhibits showing that the resort and relevant improvements were on land registered in the corporation’s name (TCT No. 32639). The staff house (occupied by Rebecca) and the structure converted from a recreation hall into a residence (occupied by Guillermo) were built or improved with corporate funds and materials (including materials left by Coppola for filming). Eriberto Roxas (Rebecca’s husband) served as general manager and concessionaire; while alive and during Eufrocino Roxas’s control, the petitioners’ occupation was tolerated and unobjected to by the board. Following disputes and interference with operations, the board adopted Resolution No. 83‑12 (Aug. 27, 1983) authorizing ejectment and demand letters were sent; administrative matters and complaints were also taken to various authorities.

Procedural History at Trial and on Appeal

The two ejectment actions were consolidated, tried jointly, and the plaintiff corporation completed presentation of evidence. The petitioners and their counsel repeatedly failed to appear at scheduled hearings despite notice; the RTC eventually considered the cases submitted for decision based on the record and rendered judgment in favor of the plaintiff. The CA affirmed the RTC decision; petitioners then filed a petition for review to the Supreme Court.

Due Process and Counsel Negligence Ruling

The Court reiterated the general rule that a client is bound by the mistakes of counsel, but acknowledged the exception where gross negligence by counsel effectively deprives a party of due process and property. After reviewing the chronology and notices, the Supreme Court concluded the petitioners were aware of their counsel’s lapses, failed to replace him or otherwise protect their interests, and received repeated notices of hearings and warnings that nonappearance would cause submission of the case on the record. Consequently, the Court declined to apply the exception for gross negligence and found no deprivation of due process sufficient to overturn the proceedings.

Piercing the Corporate Veil and Stockholder Rights Ruling

The Court reaffirmed the principle that a corporation has a juridical personality distinct from its stockholders and that corporate property registered in the corporation’s name belongs to the corporation, not to individual shareholders as co‑owners. While acknowledging that management (notably Eufrocino Roxas) allowed or consented to the petitioners’ occupancy during his control, the Court held such tolerance does not bind the corporation indefinitely. Piercing the corporate veil was rejected because the record did not show the corporation was used as a cloak for fraud, illegality, or to work injustice in circumstances warranting disregard of corporate personality. Thus petitioners’ stockholder status did not confer a right to possession of corporate assets against the corporation’s subsequent decision to eject.

Builder in Good Faith and Unfinished Building Ru

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms