CORPORATION

 LAW  CASE  DIGESTS  

3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

SAN  JUAN  STRUCTURAL  AND  STEEL  FABRICATION  vs.  CA   CA:    

G.R.  No.  129459  –  September  29,  1998   Affirmed   the   Decision   of   the   RTC   with   the   modification   that  
  Respondent  Nenita  Lee  Gruenberg  was  ordered  to  refund  P100,000  to  
FACTS:   petitioner,   the   amount   remitted   as   "downpayment"   or   "earnest  
San   Juan   Structural   &   Steel   Fabricators   (San   Juan   for   brevity)   entered   money."  
into  an  agreement  with  Motorich  Sales  Corporation  for  the  transfer  to    
it   of   a   parcel   of   land   identified   as   Lot   30,   Block   1   of   the   Acropolis  
Greens   Subdivision   located   in   the   District   of   Murphy,   Quezon   City,   1. Petitioner   San   Juan   Structural   and   Steel   Fabricators,   Inc.  
Metro   Manila.   San   Juan   paid   the   downpayment   in   the   sum   of   One   alleges   that   on   February   14,   1989,   it   entered   through   its  
Hundred  Thousand  (P100,  000.00)  Pesos.     president,   Andres   Co,   into   the   disputed   Agreement   with  
  Respondent   Motorich   Sales   Corporation,   which   was   in  
San   Juan   was   ready   with   the   amount   corresponding   to   the   balance,   turn   allegedly   represented   by   its   treasurer,   Nenita   Lee  
covered   by   Metrobank   Cashier's   Check,   payable   to   Motorich   Sales   Gruenberg.  Petitioner  insists  that  "[w]hen  Gruenberg  and  
Corporation   but   the   latter’s   treasurer,   Nenita   Lee   Gruenberg   did   not   Co   affixed   their   signatures   on   the   contract   they   both  
appear   during   their   supposed   meeting   in   San   Juan’s   office.   Despite   consented   to   be   bound   by   the   terms   thereof."   Ergo,  
repeated  demands,  Motorich  Sales  Corporation  refused  to  execute  the   petitioner  contends  that  the  contract  is  binding  on  the  two  
Transfer  of  Rights/Deed  of  Assignment  which  is  necessary  to  transfer   corporations.  
the  certificate  of  title  in  favor  of  San  Juan.  
  ISSUE:    
ACL   Development   Corporation   and   Motorich   Sales   Corporation   Was   there   a   valid   contract   of   sale   between   petitioner   and   Motorich?  
entered   into   a   Deed   of   Absolute   Sale   whereby   the   former   transferred   None.  
to  the  latter  the  subject  property.  The  Registry  of  Deeds  of  Quezon  City    
issued   a   new   title   in   the   name   of   Motorich   Sales   Corporation,   Section  23  of  BP  68  provides:  
represented   by   treasurer   Nenita   Lee   Gruenberg   and   Reynaldo   L   "SEC.   23.   The   Board   of   Directors   or   Trustees.   —   Unless   otherwise  
Gruenberg,  President  and  Chairman  of  Motorich.   provided   in   this   Code,   the   corporate   powers   of   all   corporations  
  formed  under  this  Code  shall  be  exercised,  all  business  conducted  and  
By   reason   of   Motorich’s   bad   faith   in   refusing   to   execute   a   Transfer   of   all  property  of  such  corporations  controlled  and  held  by  the  board  of  
Rights/Deed   of   Assignment   in   favor   of   San   Juan,   the   latter   lost   the   directors  or  trustees  to  be  elected  from  among  the  holders  of  stocks,  
opportunity   to   construct   a   residential   building   in   the   sum   of   or   where   there   is   no   stock,   from   among   the   members   of   the  
P100,000.00.  Hence,  San  Juan  filed  a  complaint  against  Motorich  Sales.   corporation,   who   shall   hold   office   for   one   (1)   year   and   until   their  
  successors  are  elected  and  qualified."  
RTC:    
Dismissed  the  complaint  ruling  that    there  is  no  evidence  to  show  that   Indubitably,   a   corporation   may   act   only   through   its   board   of   directors  
defendant  Nenita  Lee  Gruenberg  was  indeed  authorized  by  defendant   or,   when   authorized   either   by   its   bylaws   or   by   its   board   resolution,  
corporation.   through   its   officers   or   agents   in   the   normal   course   of   business.   The  
  general   principles   of   agency   govern   the   relation   between   the  
corporation   and   its   officers   or   agents,   subject   to   the   articles   of  

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incorporation,  bylaws,  or  relevant  provisions  of  law.  Thus,  this  Court   authority   to   buy   or   sell   real   property,   an   activity   which   falls   way  
has   held   that   "   'a   corporate   officer   or   agent   may   represent   and   bind   beyond  the  scope  of  her  general  authority.  
the   corporation   in   transactions   with   third   persons   to   the   extent   that  
the   authority   to   do   so   has   been   conferred   upon   him,   and   this   includes   1.1. Petitioner  further  contends  that  Respondent  Motorich  
powers   which   have   been   intentionally   conferred,   and   also   such   has   ratified   said   contract   of   sale   because   of   its  
powers   as,   in   the   usual   course   of   the   particular   business,   are   "acceptance   of   benefits,"   as   evidenced   by   the   receipt  
incidental   to,   or   may   be   implied   from,   the   powers   intentionally   issued  by  Respondent  Gruenberg.  
conferred,  powers  added  by  custom  and  usage,  as  usually  pertaining  
to   the   particular   officer   or   agent,   and   such   apparent   powers   as   the   As   a   general   rule,   the   acts   of   corporate   officers   within   the   scope   of  
corporation   has   caused   persons   dealing   with   the   officer   or   agent   to   their   authority   are   binding   on   the   corporation.   But   when   these  
believe  that  it  has  conferred.   officers   exceed   their   authority,   their   actions   "cannot   bind   the  
  corporation,   unless   it   has   ratified   such   acts   or   is   estopped   from  
Unless  duly  authorized,  a  treasurer,  whose  powers  are  limited,  cannot   disclaiming  them."  
bind   the   corporation   in   a   sale   of   its   assets.   In   the   case   at   bar,    
Respondent   Motorich   categorically   denies   that   it   ever   authorized   EFFECT:  Because  Motorich  had  never  given  a  written  authorization  to  
Nenita   Gruenberg,   its   treasurer,   to   sell   the   subject   parcel   of   land.   Respondent   Gruenberg   to   sell   its   parcel   of   land,   the  
Consequently,   petitioner   had   the   burden   of   proving   that   Nenita   Agreement   entered   into   by   the   latter   with   petitioner   is   void  
Gruenberg   was   in   fact   authorized   to   represent   and   bind   Motorich   in   under   Article   1874   of   the   Civil   Code.   Being   inexistent   and  
the  transaction.  Petitioner  failed  to  discharge  this  burden.  Its  offer  of   void  from  the  beginning,  said  contract  cannot  be  ratified.  
evidence  before  the  trial  court  contained  no  proof  of  such  authority.  It  
2. Petitioner  also  argues  that  the  veil  of  corporate  fiction  of  
has   not   shown   any   provision   of   said   respondent's   articles   of  
Motorich   should   be   pierced,   because   the   latter   is   a   close  
incorporation,   bylaws   or   board   resolution   to   prove   that   Nenita  
corporation.   Since   "Spouses   Reynaldo   L.   Gruenberg   and  
Gruenberg   possessed   such   power.   That   Nenita   Gruenberg   is   the  
Nenita  R.  Gruenberg  owned  all  or  almost  all  or  99.866%  to  
treasurer  of  Motorich  does  not  free  petitioner  from  the  responsibility  
be   accurate,   of   the   subscribed   capital   stock"  of   Motorich,  
of   ascertaining   the   extent   of   her   authority   to   represent   the  
petitioner  argues  that  Gruenberg  needed  no  authorization  
corporation.   Petitioner   cannot   assume   that   she,   by   virtue   of   her  
from  the  board  to  enter  into  the  subject  contract.    It  adds  
position,  was  authorized  to  sell  the  property  of  the  corporation.    
that,   being   solely   owned   by   the   Spouses   Gruenberg   the  
 
company   can   be   treated   as   a   close  corporation   which   can  
Selling  is  obviously  foreign  to  a  corporate  treasurer's  function,  which  
be   bound   by   the   acts   of   its   principal   stockholder   who  
generally  has  been  described  as  "to  receive  and  keep  the  funds  of  the  
needs  no  specific  authority.  
corporation   and   to   disburse   them   in   accordance   with   the   authority  
 
given   him   by   the   board   or   the   properly   authorized   officers."   Neither  
was   such   real   estate   sale   shown   to   be   a   normal   business   activity   of   ISSUE:    
Motorich.  The  primary  purpose  of  Motorich  is  marketing,  distribution,   May  the  doctrine  of  piercing  the  veil  of  corporate  fiction  be  applied  to  
export   and   import   in   relation   to   a   general   merchandising   business.   Motorich?  No.  
Unmistakably,   its   treasurer   is   not   cloaked   with   actual   or   apparent    

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Petitioner  utterly  failed  to  establish  that  said  corporation  was  formed,   prohibited.   From   its   articles,   it   is   clear   that   Respondent   Motorich   is  
or   that   it   is   operated,   for   the   purpose   of   shielding   any   alleged   not   a   close   corporation.  Motorich   does   not   become   one   either,   just  
fraudulent   or   illegal   activities   of   its   officers   or   stockholders;   or   that   because  Spouses  Reynaldo  and  Nenita  Gruenberg  owned  99.866%  of  
the   said   veil   was   used   to   conceal   fraud,   illegality   or   inequity   at   the   its   subscribed   capital   stock.   The   [m]ere   ownership   by   a   single  
expense  of  third  persons  like  petitioner.   stockholder  or  by  another  corporation  of  all  or  nearly  all  of  the  capital  
  stock   of   a   corporation   is   not   of   itself   sufficient   ground   for  
2.1. Petitioner  claims  that  Motorich  is  a  close  corporation.   disregarding  the  separate  corporate  personalities."    So,  too,  a  narrow  
distribution   of   ownership   does   not,   by   itself,   make   a   close  
No.   Section   96   of   the   Corporation   Code   defines   a   close   corporation.  
corporation  as  follows:    
  ADD-­‐ON:    
"SEC.   96.   Definition   and   Applicability   of   Title.   —   A    
close   corporation,   within   the   meaning   of   this   Code,   is   one   The  Court  is  not  unaware  that  there  are  exceptional  cases  where  "an  
whose  articles  of  incorporation  provide  that:     action   by   a   director,   who   singly   is   the   controlling   stockholder,   may   be  
(1)  All  of  the  corporation's  issued  stock  of  all  classes,   considered   as   a   binding   corporate   act   and   a   board   action   as   nothing  
exclusive   of   treasury   shares,   shall   be   held   of   record   by   not   more  than  a  mere  formality."    The  present  case,  however,  is  not  one  of  
more   than   a   specified   number   of   persons,   not   exceeding   them.    
twenty  (20);      
  As  stated  by  petitioner,  Spouses  Reynaldo  and  Nenita  Gruenberg  own  
(2)  All  of  the  issued  stock  of  all  classes  shall  be  subject   "almost   99.866%"   of   Respondent   Motorich.  Since   Nenita   is   not   the  
to  one  or  more  specified  restrictions  on  transfer  permitted  by   sole   controlling   stockholder   of   Motorich,   the   aforementioned  
this  Title;  and     exception  does  not  apply.  
   
(3)   The   corporation   shall   not   list   in   any   stock   MANUEL  R.  DULAY  ENTERPRISES  vs.  CA  
exchange   or   make   any   public   offering   of   any   of   its   stock   of   any   G.R.  No.  91889  –  August  27,  1993  
class.   Notwithstanding   the   foregoing,   a   corporation   shall   be    
deemed  not  a  close  corporation  when  at  least  two-­‐thirds  (2/3)   FACTS:  
of   its   voting   stock   or   voting   rights   is   owned   or   controlled   by   Petitioner   Manuel   R.   Dulay   Enterprises,   Inc,   a   domestic   corporation  
another   corporation   which   is   not   a   close   corporation   within   with   the   following   as   members   of   its   Board   of   Directors:   Manuel   R.  
the  meaning  of  this  Code  .  .  ."   Dulay   with   19,960   shares   and   designated   as   president,   treasurer   and  
  general  manager,  Atty.  Virgilio  E.  Dulay  with  10  shares  and  designated  
The   articles   of   incorporation  of   Motorich   Sales   Corporation   does   not   as  vice-­‐president;  Linda  E.  Dulay  with  10  shares;  Celia  Dulay-­‐Mendoza  
contain   any   provision   stating   that   (1)   the   number   of   stockholders   with  10  shares;  and  Atty.  Plaridel  C.  Jose  with  10  shares  and  designated  
shall   not   exceed   20,   or   (2)   a   preemption   of   shares   is   restricted   in   as  secretary,  owned  a  property  covered  by  TCT  No.  17880  4  and  known  
favor  of  any  stockholder  or  of  the  corporation,  or  (3)  listing  its  stocks   as   Dulay   Apartment   consisting   of   sixteen   (16)   apartment   units   on   a   six  
in   any   stock   exchange   or   making   a   public   offering   of   such   stocks   is   hundred   eighty-­‐nine   located   at   Seventh   Street   (now   Buendia  

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Extension)  and  F.B.  Harrison  Street,  Pasay  City.   On  July  20,  1978,  private  respondent  Maria  Veloso  executed  a  Deed  of  
  Absolute   Assignment   of   the   Right   to   Redeem   12   in   favor   of   Manuel  
Petitioner   corporation   through   its   president,   Manuel   Dulay,   obtained   Dulay   assigning   her   right   to   repurchase   the   subject   property   from  
various   loans   for   the   construction   of   its   hotel   project,   Dulay   private  respondent  Torres  as  a  result  of  the  extra  sale  held  on  April  25,  
Continental   Hotel   (now   Frederick   Hotel).   It   even   had   to   borrow   money   1978.  
from  petitioner  Virgilio  Dulay  to  be  able  to  continue  the  hotel  project.    
As   a   result   of   said   loan,   petitioner   Virgilio   Dulay   occupied   one   of   the   As   neither   private   respondent   Maria   Veloso   nor   her   assignee   Manuel  
unit   apartments   of   the   subject   property   since   property   since   1973   Dulay   was   able   to   redeem   the   subject   property   within   the   one   year  
while   at   the   same   time   managing   the   Dulay   Apartment   at   his   statutory   period   for   redemption,   private   respondent   Torres   filed   an  
shareholdings   in   the   corporation   was   subsequently   increased   by   his   Affidavit  of  Consolidation  of  Ownership  13  with  the  Registry  of  Deeds  of  
father.  5   Pasay   City   and   TCT   No.   24799   14   was   subsequently   issued   to   private  
  respondent  Manuel  Torres  on  April  23,  1979.  
On   December   23,   1976,   Manuel   Dulay   by   virtue   of   Board   Resolution    
 No  18  6   of  petitioner  corporation  sold  the  subject  property  to  private   On  October  1,  1979,  private  respondent  Torres  filed  a  petition  for  the  
respondents   spouses   Maria   Theresa   and   Castrense   Veloso   in   the   issuance   of   a   writ   of   possession   against   private   respondents   spouses  
amount   of   P300,000.00   as   evidenced   by   the   Deed   of   Absolute   Sale.   7   Veloso   and   Manuel   Dulay   in   LRC   Case   No.   1742-­‐P.   However,   when  
Thereafter,   TCT   No.   17880   was   cancelled   and   TCT   No.   23225   was   petitioner   Virgilio   Dulay   was   never   authorized   by   the   petitioner  
issued   to   private   respondent   Maria   Theresa   Veloso.   8   Subsequently,   corporation   to   sell   or   mortgage   the   subject   property,   the   trial   court  
Manuel   Dulay   and   private   respondents   spouses   Veloso   executed   a   ordered   private   respondent   Torres   to   implead   petitioner   corporation  
Memorandum   to   the   Deed   of   Absolute   Sale   of   December   23,   1976   9   as  an  indispensable  party  but  the  latter  moved  for  the  dismissal  of  his  
dated  December  9,  1977  giving  Manuel  Dulay  within  (2)  years  or  until   petition  which  was  granted  in  an  Order  dated  April  8,  1980.  
December  9,  1979  to  repurchase  the  subject  property  for  P200,000.00    
which  was,  however,  not  annotated  either  in  TCT  No.  17880  or  TCT  No.   On   June   20,   1980,   private   respondent   Torres   and   Edgardo   Pabalan,  
23225.   real   estate   administrator   of   Torres,   filed   an   action   against   petitioner  
  corporation,   Virgilio   Dulay   and   Nepomuceno   Redovan,   a   tenant   of  
On  December  24,  1976,  private  respondent  Maria  Veloso,  without  the   Dulay   Apartment   Unit   No.   8-­‐A   for   the   recovery   of   possession,   sum   of  
knowledge  of  Manuel  Dulay,  mortgaged  the  subject  property  to  private   money   and   damages   with   preliminary   injunction   in   Civil   Case,   No.  
respondent  Manuel  A.  Torres  for  a  loan  of  P250,000.00  which  was  duly   8198-­‐P  with  the  then  Court  of  First  Instance  of  Rizal.  
annotated  as  Entry  No.  68139  in  TCT  No.  23225.  10    
  On  July  21,  1980,  petitioner  corporation  filed  an  action  against  private  
Upon   the   failure   of   private   respondent   Maria   Veloso   to   pay   private   respondents   spouses   Veloso   and   Torres   for   the   cancellation   of   the  
respondent   Torres,   the   subject   property   was   sold   on   April   5,   1978   to   Certificate   of   Sheriff's   Sale   and   TCT   No.   24799   in   Civil   Case   No.   8278-­‐P  
private   respondent   Torres   as   the   highest   bidder   in   an   extrajudicial   with  the  then  Court  of  First  Instance  of  Rizal.  
foreclosure   sale   as   evidenced   by   the   Certificate   of   Sheriff's   Sale   11    
issued  on  April  20,  1978.   On  January  29,  1981,  private  respondents  Pabalan  and  Torres  filed  an  
  action   against   spouses   Florentino   and   Elvira   Manalastas,   a   tenant   of  

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Dulay   Apartment   Unit   No.   7-­‐B,   with   petitioner   corporation   as   3.   The   directors   are   accustomed   to   take   informal   action   with   the  
intervenor  for  ejectment  in  Civil  Case  No.  38-­‐81  with  the  Metropolitan   express  or  implied  acquiese  of  all  the  stockholders,  or  
Trial  Court  of  Pasay  City  which  rendered  a  decision  on  April  25,  1985    
  4.  All  the  directors  have  express  or  implied  knowledge  of  the  action  
PETITIONER’S  CONTENTION:   in   question   and   none   of   them   makes   prompt   objection   thereto   in  
Petitioners   contend   that   the   respondent   court   had   acted   with   grave   writing.  
abuse  of  discretion  when  it  applied  the  doctrine  of  piercing  the  veil  of    
corporate   entity   in   the   instant   case   considering   that   the   sale   of   the   If  a  directors'  meeting  is  held  without  call  or  notice,  an  action  taken  
subject   property   between   private   respondents   spouses   Veloso   and   therein   within   the   corporate   powers   is   deemed   ratified   by   a  
Manuel   Dulay   has   no   binding   effect   on   petitioner   corporation   as   Board   director   who   failed   to   attend,   unless   he   promptly   files   his   written  
Resolution   No.   18   which   authorized   the   sale   of   the   subject   property   objection   with   the   secretary   of   the   corporation   after   having  
was  resolved  without  the  approval  of  all  the  members  of  the  board  of   knowledge  thereof.  
directors   and   said   Board   Resolution   was   prepared   by   a   person   not    
designated  by  the  corporation  to  be  its  secretary.   In   the   instant   case,   petitioner   corporation   is   classified   as   a   close  
  corporation   and   consequently   a   board   resolution   authorizing   the  
ISSUE:   sale  or  mortgage  of  the  subject  property  is  not  necessary  to  bind  
Whether  or  not  the  sale  of  the  subject  property  has  no  binding  effect  as   the   corporation   for   the   action   of   its   president.   At   any   rate,  
Board   Resolution,   which   authorized   the   sale   of   the   subject   property,   corporate  action  taken  at  a  board  meeting  without  proper  call  or  notice  
was  resolved  without  the  approval  of  all  the  members  of  the  Board.     in  a  close  corporation  is  deemed  ratified  by  the  absent  director  unless  
  the  latter  promptly  files  his  written  objection  with  the  secretary  of  the  
HELD:   corporation  after  having  knowledge  of  the  meeting  which,  in  his  case,  
The  court  did  not  agree.     petitioner  Virgilio  Dulay  failed  to  do.  
   
Section  101  of  the  Corporation  Code  of  the  Philippines  provides:   Petitioners'  claim  that  the  sale  of  the  subject  property  by  its  president,  
  Manuel  Dulay,  to  private  respondents  spouses  Veloso  is  null  and  void  
Sec.   101.   When   board   meeting   is   unnecessary   or   improperly   held.   as   the   alleged   Board   Resolution   No.   18   was   passed   without   the  
Unless   the   by-­‐laws   provide   otherwise,   any   action   by   the   directors   of   knowledge   and   consent   of   the   other   members   of   the   board   of  
a  close  corporation  without  a  meeting  shall  nevertheless  be  deemed   directors  cannot  be  sustained.    
valid  if:  
  As  correctly  pointed  out  by  the  respondent  Court  of  Appeals:  
1.   Before   or   after   such   action   is   taken,   written   consent   thereto   is   Appellant   Virgilio   E.   Dulay's   protestations   of   complete   innocence   to   the  
signed  by  all  the  directors,  or   effect  that  he  never  participated  nor  was  even  aware  of  any  meeting  or  
  resolution   authorizing   the   mortgage   or   sale   of   the   subject   premises   is  
2.   All   the   stockholders   have   actual   or   implied   knowledge   of   the   difficult   to   believe.   On   the   contrary,   he   is   very   much   privy   to   the  
action  and  make  no  prompt  objection  thereto  in  writing;  or   transactions  involved.  To  begin  with,  he  is  a  incorporator  and  one  of  the  
  board  of  directors  designated  at  the  time  of  the  organization  of  Manuel  

 CORPO  CASE  DIGESTS  3C  &  3S    ||     5  

 CORPORATION  LAW  CASE  DIGESTS  
3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

R.   Dulay   Enterprise,   Inc.   In   ordinary   parlance,   the   said   entity   is   loosely   delivered  to  him  is  also  without  merit.  
referred  to  as  a  "family  corporation".    
  Paragraph  1,  Article  1498  of  the  New  Civil  Code  provides:  
Besides,   the   fact   that   petitioner   Virgilio   Dulay   on   June   24,   1975   When  the  sale  is  made  through  a  public  instrument,  the  execution  thereof  
executed  an  affidavit  that  he  was  a  signatory  witness  to  the  execution   shall  be  equivalent  to  the  delivery  of  the  thing  which  is  the  object  of  the  
of  the  post-­‐dated  Deed  of  Absolute  Sale  of  the  subject  property  in  favor   contract,   if   from   the   deed   the   contrary   do   not   appear   or   cannot   clearly  
of   private   respondent   Torres   indicates   that   he   was   aware   of   the   be  inferred.  
transaction   executed   between   his   father   and   private   respondents   and    
had,   therefore,   adequate   knowledge   about   the   sale   of   the   subject   Therefore,  prior  physical  delivery  or  possession  is  not  legally  required  
property  to  private  respondents.   since   the   execution   of   the   Deed   of   Sale   in   deemed   equivalent   to  
  delivery.  
Consequently,  petitioner   corporation   is   liable   for   the   act   of   Manuel    
Dulay  and  the  sale  of  the  subject  property  to  private  respondents  
by  Manuel  Dulay  is  valid  and  binding.    
 
As  stated  by  the  trial  court:  
 
.   .   .   the   sale   between   Manuel   R.   Dulay   Enterprises,   Inc.   and   the   spouses  
Maria  Theresa  V.  Veloso  and  Castrense  C.  Veloso,  was  a  corporate  act  of  
the  former  and  not  a  personal  transaction  of  Manuel  R.  Dulay.  This  is  so  
because  Manuel  R.  Dulay  was  not  only  president  and  treasurer  but  also  
the   general   manager   of   the   corporation.   The   corporation   was   a   closed  
family   corporation   and   the   only   non-­‐relative   in   the   board   of   directors  
was  Atty.  Plaridel  C.  Jose  who  appeared  on  paper  as  the  secretary.  There  
is   no   denying   the   fact,   however,   that   Maria   Socorro   R.   Dulay   at   times  
acted   as   secretary.   .   .   .,   the   Court   can   not   lose   sight   of   the   fact   that   the  
Manuel   R.   Dulay   Enterprises,   Inc.   is   a   closed   family   corporation   where  
the  incorporators  and  directors  belong  to  one  single  family.  It  cannot  be  
concealed   that   Manuel   R.   Dulay   as   president,   treasurer   and   general  
manager  almost  had  absolute  control  over  the  business  and  affairs  of  the  
corporation.    
 
OTHER  ISSUE:  
Petitioners'  contention  that  private  respondent  Torres  never  acquired  
ownership   over   the   subject   property   since   the   latter   was   never   in  
actual   possession   of   the   subject   property   nor   was   the   property   ever  

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