SECOND DIVISION

[G.R. No. 124715. January 24, 2000]

RUFINA LUY LIM petitioner, vs. COURT OF A !AL", AUTO TRUC# T$A COR ORATION, " !!% %I"TRI$UTING, INC., ACTI&! %I"TRI$UTOR", ALLIANC! MAR#!TING COR ORATION, ACTION COM ANY, INC. respondents. %!CI"ION
$U!NA, J.' May a corporation, in its universality, be the proper subject of and be included in the inventory of the estate of a deceased person? etitioner disputes before us throu!h the instant petition for revie" on certiorari, the decision $#% of the Court of &ppeals pro'ul!ated on #( &pril #))*, in C&+,- S No. /(*#0, "hich nullified and set aside the orders dated 12 3uly #))4 $5%, #5 Septe'ber #))4 $/% and #4 Septe'ber #))4 $2% of the -e!ional 6rial Court of 7ue8on City, 9ranch )/, sittin! as a probate court.
# 5 / 2

etitioner -ufina :uy :i' is the survivin! spouse of the late astor ;. :i' "hose estate is the subject of probate proceedin!s in Special roceedin!s 7+)4+5///2, entitled, <In -e= Intestate Estate of astor ;. :i' -ufina :uy :i', represented by ,eor!e :uy, etitioner<. rivate respondents &uto 6ruc> Corporation, &lliance Mar>etin! Corporation, Speed Distributin!, Inc., &ctive Distributin!, Inc. and &ction Co'pany are corporations for'ed, or!ani8ed and e?istin! under hilippine la"s and "hich o"ned real properties covered under the 6orrens syste'. On ## 3une #))2, astor ;. :i' died intestate. @erein petitioner, as survivin! spouse and duly represented by her nephe" ,eor!e :uy, filed on #0 March #))4, a joint petition $4% for the ad'inistration of the estate of astor ;. :i' before the -e!ional 6rial Court of 7ue8on City.
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rivate respondent corporations, "hose properties "ere included in the inventory of the estate of astor ;. :i', then filed a 'otion $*% for the liftin! of lis pendens and 'otion $0% for e?clusion of certain properties fro' the estate of the decedent.
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In an order $(% dated 1( 3une #))4, the -e!ional 6rial Court of 7ue8on City, 9ranch )/, sittin! as a probate court, !ranted the private respondentsA t"in 'otions, in this "ise=
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<Bherefore, the -e!ister of Deeds of 7ue8on City is hereby ordered to lift, e?pun!e or delete the annotation of lis pendens on 6ransfer Certificates of 6itle Nos. ##*0#*, ##*0#0, ##*0#(, ##*0#) and 4#(5 and it is hereby further ordered that the properties covered by the sa'e titles as "ell as those properties by CsicD 6ransfer Certificate of 6itle Nos. *#/2)2, /*/#5/, 5/*5/* and 5*/5/* are e?cluded fro' these proceedin!s. SO O-DE-ED.< SubseEuently, -ufina :uy :i' filed a verified a'ended petition $)% "hich contained the follo"in! aver'ents=
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</. 6he late astor ;. :i' personally o"ned durin! his lifeti'e the follo"in! business entities, to "it= 9usiness Entity F F F F 9loc> /, :ot *, Dacca &ddress=

&lliance Mar>etin! ,Inc. 9G @o'es, araHaEue, Metro Manila. F F F F

Speed Distributin! Inc. &!uinaldo @i!h"ay, 9acoor, Cavite. * 0 ( )

)#1 9arrio Nio!,

F 554# -oosevelt &venue,

&uto 6ruc> 69& Corp. 7ue8on City. F F F F

&ctive Distributors, Inc. @o'es, araHaEue, Metro Manila. F F F F

9loc> /, :ot *, Dacca 9G

&ction Co'pany Murphy, 7ue8on City or )5+D Mc+&rthur @i!h"ay Valen8uela 9ulacan.

#11 51th &venue

</.# &lthou!h the above business entities dealt and en!a!ed in business "ith the public as corporations, all their capital, assets and eEuity "ere ho"ever, personally o"ned by the late astor ; :i'. @ence the alle!ed stoc>holders and officers appearin! in the respective articles of incorporation of the above business entities "ere 'ere du''ies of astor ;. :i', and they "ere listed therein only for purposes of re!istration "ith the Securities and E?chan!e Co''ission. <2. astor :i', li>e"ise, had 6i'e, Savin!s and Current Deposits "ith the follo"in! ban>s= CaD Metroban>, ,race ar>, Caloocan City and 7ue8on &venue, 7ue8on City 9ranches and CbD Girst Intestate 9an> Cfor'erly roducers 9an>D, -i8al Co''ercial 9an>in! Corporation and in other ban>s "hose identities are yet to be deter'ined. <4. 6hat the follo"in! real properties, althou!h re!istered in the na'e of the above entities, "ere actually acEuired by astor ;. :i' durin! his 'arria!e "ith petitioner, to "it= Corporation 6itle :ocation

F 6C6 No. *#005* Sto. Do'in!o Cainta, 6C6 No. 50()* rance,

>. &uto 6ruc> 69& Corporation -i8al E. &lliance Mar>etin! Metro Manila

Copies of the above+'entioned 6ransfer Certificate of 6itle andIor 6a? Declarations are hereto attached as &nne?es <C< to <B<. F F F F

<0. 6he afore'entioned properties andIor real interests left by the late astor ;. :i', are all conju!al in nature, havin! been acEuired by hi' durin! the e?istence of his 'arria!e "ith petitioner. <(. 6here are other real and personal properties o"ned by astor ;. :i' "hich petitioner could not as yet identify. etitioner, ho"ever "ill sub'it to this @onorable Court the identities thereof and the necessary docu'ents coverin! the sa'e as soon as possible.< On 12 3uly #))4, the -e!ional 6rial Court actin! on petitionerAs 'otion issued an order $#1%, thus=
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<Bherefore, the order dated 1( 3une #))4 is hereby set aside and the -e!istry of Deeds of 7ue8on City is hereby directed to reinstate the annotation of lis pendens in case said annotation had already been deleted andIor cancelled said 6C6 Nos. ##*0#*, ##*0#0, ##*0#(, ##*0#) and 4#5(5. Gurther 'ore CsicD, said properties covered by 6C6 Nos. *#/2)2, /*4#5/, 5/*54* and 5/*5/0 by virtue of the petitioner are included in the instant petition. SO O-DE-ED.< On 12 Septe'ber #))4, the probate court appointed -ufina :i' as special ad'inistrator $##% and Mi!uel :i' and :a"yer Donald :ee, as co+special ad'inistrators of the estate of astor ;. :i', after "hich letters of ad'inistration "ere accordin!ly issued.
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In an order $#5% dated #5 Septe'ber #))4, the probate court denied ane" private respondentsA 'otion for e?clusion, in this "ise=
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<6he issue precisely raised by the petitioner in her petition is "hether the corporations are the 'ere alter e!os or instru'entalities of astor :i', Other"ise CsicD stated, the issue involves the piercin! of the corporate veil, a 'atter that is clearly "ithin the jurisdiction of this @onorable Court and not the Securities and E?chan!e Co''ission. 6hus, in the case of Cease vs. Court of &ppeals, )/ SC-& 2(/, the crucial issue decided by the re!ular court "as "hether the corporation involved therein "as the 'ere e?tension of the decedent. &fter findin! in the affir'ative, the Court ruled that the assets of the corporation are also assets of the estate. & readin! of .D. )15, the la" relied upon by oppositors, sho"s that the SECAs e?clusive CsicD applies only to intra+corporate controversy. It is si'ply a suit to settle the intestate estate of a deceased person "ho, durin! his lifeti'e, acEuired several properties and put up corporations as his instru'entalities. SO O-DE-ED.< On #4 Septe'ber #))4, the probate court actin! on an ex parte 'otion filed by petitioner, issued an order $#/% the dispositive portion of "hich reads=
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<Bherefore, the parties and the follo"in! ban>s concerned herein under enu'erated are hereby ordered to co'ply strictly "ith this order and to produce and sub'it to the special ad'inistrators , throu!h this @onorable Court "ithin C4D five days fro' receipt of this order their respective records of the savin!sIcurrent accountsIti'e deposits and other deposits in the na'es of astor :i' andIor corporations above+'entioned, sho"in! all the transactions 'ade or done concernin! savin!s Icurrent accounts fro' 3anuary #))2 up to their receipt of this court order. FFF FFF FFF SO O-DE-ED.< rivate respondent filed a special civil action for certiorari $#2%, "ith an ur!ent prayer for a restrainin! order or "rit of preli'inary injunction, before the Court of &ppeals Euestionin! the orders of the -e!ional 6rial Court, sittin! as a probate court.
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On #( &pril #))*, the Court of &ppeals, findin! in favor of herein private respondents, rendered the assailed decision $#4%, the decretal portion of "hich declares=
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<Bherefore, pre'ises considered, the instant special civil action for certiorari is hereby !ranted, 6he i'pu!ned orders issued by respondent court on 3uly 2,#))4 and Septe'ber #5, #))4 are hereby nullified and set aside. 6he i'pu!ned order issued by respondent on Septe'ber #4, #))4 is nullified insofar as petitioner corporations< ban> accounts and records are concerned. SO O-DE-ED.< 6hrou!h the e?pediency of -ule 24 of the -ules of Court, herein petitioner -ufina :uy :i' no" co'es before us "ith a lone assi!n'ent of error $#*%=
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<6he respondent Court of &ppeals erred in reversin! the orders of the lo"er court "hich 'erely allo"ed the preli'inary or provisional inclusion of the private respondents as part of the estate of the late deceased CsicD astor ;. :i' "ith the respondent Court of &ppeals arro!atin! unto itself the po"er to repeal, to disobey or to i!nore the clear and e?plicit provisions of -ules (#,(/,(2 and (0 of the -ules of Court and thereby preventin! the petitioner, fro' perfor'in! her duty as special ad'inistrator of the estate as e?pressly provided in the said -ules.< etitionerAs contentions tread on perilous !rounds. In the instant petition for revie", petitioner prays that "e affir' the orders issued by the probate court "hich "ere subseEuently set aside by the Court of &ppeals. ;et, before "e delve into the 'erits of the case, a revie" of the rules on jurisdiction over probate proceedin!s is indeed in order. 6he provisions of -epublic &ct 0*)# a'bansa 9l!. #5), are pertinent=
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$#0%,

"hich introduced a'end'ents to 9atas

(")*+,on 1. Section #) of 9atas a'bansa 9l!. #5), other"ise >no"n as the <3udiciary -eor!ani8ation &ct of #)(1<, is hereby a'ended to read as follo"s= Section #). 3urisdiction in civil cases. -e!ional 6rial Courts shall e?ercise e?clusive jurisdiction= ??? #4 #* #0 ??? ???

C2D In all 'atters of probate, both testate and intestate, "here the !ross value of the estate e?ceeds One @undred 6housand esos C #11,111D or, in probate 'atters in Metro Manila, "here such !ross value e?ceeds 6"o @undred 6housand esos C 511,111DJ ??? ??? ???

Section /. Section // of the sa'e la" is hereby a'ended to read as follo"s= Section //. 3urisdiction of Metropolitan 6rial Courts, Municipal 6rial Courts and Municipal Circuit 6rial Courts in Civil Cases.+Metropolitan 6rial Courts, Municipal 6rial Courts and Municipal Circuit 6rial Courts shall e?ercise= #. E?clusive ori!inal jurisdiction over civil actions and probate proceedin!s, testate and intestate, includin! the !rant of provisional re'edies in proper cases, "here the value of the personal property, estate or a'ount of the de'and does not e?ceed One @undred 6housand esosC #11,111D or, in Metro Manila "here such personal property, estate or a'ount of the de'and does not e?ceed 6"o @undred 6housand esos C 511,111D, e?clusive of interest, da'a!es of "hatever >ind, attorneyAs fees, liti!ation e?penses and costs, the a'ount of "hich 'ust be specifically alle!ed, rovided, that interest, da'a!es of "hatever >ind, attorneyAs, liti!ation e?penses and costs shall be included in the deter'ination of the filin! fees, rovided further, that "here there are several clai's or causes of actions bet"een the sa'e or different parties, e'bodied in the sa'e co'plaint, the a'ount of the de'and shall be the totality of the clai's in all the causes of action, irrespective of "hether the causes of action arose out of the sa'e or different transactionsJ ??? ??? ???<

Si'ply put, the deter'ination of "hich court e?ercises jurisdiction over 'atters of probate depends upon the !ross value of the estate of the decedent. &s to the po"er and authority of the probate court, petitioner relies heavily on the principle that a probate court 'ay pass upon title to certain properties, albeit provisionally, for the purpose of deter'inin! "hether a certain property should or should not be included in the inventory.

In a litany of cases, Be defined the para'eters by "hich the court 'ay e?tend its probin! ar's in the deter'ination of the Euestion of title in probate proceedin!s. 6his Court, in PASTOR, JR. vs. COURT OF APPEALS,
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$#(%

held=

<F F F &s a rule, the Euestion of o"nership is an e?traneous 'atter "hich the probate court cannot resolve "ith finality. 6hus, for the purpose of deter'inin! "hether a certain property should or should not be included in the inventory of estate properties, the robate Court 'ay pass upon the title thereto, but such deter'ination is provisional, not conclusive, and is subject to the final decision in a separate action to resolve title.< Be reiterated the rule in PEREIRA vs. COURT OF APPEALS
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$#)%=

<F F F 6he function of resolvin! "hether or not a certain property should be included in the inventory or list of properties to be ad'inistered by the ad'inistrator is one clearly "ithin the co'petence of the probate court. @o"ever, the courtAs deter'ination is only provisional in character, not conclusive, and is subject to the final decision in a separate action "hich 'ay be instituted by the parties.< Gurther, in MORALES vs. CFI OF CAVITE $51% citin! CUIZON vs. RAMOLETE Be 'ade an e?position on the probate courtAs li'ited jurisdiction=
51 5#

$5#%,

<It is a "ell+settled rule that a probate court or one in char!e of proceedin!s "hether testate or intestate cannot adjudicate or deter'ine title to properties clai'ed to be a part of the estate and "hich are eEually clai'ed to belon! to outside parties. &ll that the said court could do as re!ards said properties is to deter'ine "hether they should or should not be included in the inventory or list of properties to be ad'inistered by the ad'inistrator. If there is no dispute, "ell and !oodJ but if there is, then the parties, the ad'inistrator and the opposin! parties have to resort to an ordinary action for a final deter'ination of the conflictin! clai's of title because the probate court cannot do so.< &!ain, in VALERA vs. INSERTO &ndres Narvasa $5/%=
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$55%,

Be had occasion to elucidate, throu!h Mr. 3ustice

<Settled is the rule that a Court of Girst Instance Cno" -e!ional 6rial CourtD, actin! as a probate court, e?ercises but li'ited jurisdiction, and #( #) 51 5# 55 5/

thus has no po"er to ta>e co!ni8ance of and deter'ine the issue of title to property clai'ed by a third person adversely to the decedent, unless the clai'ant and all other parties havin! le!al interest in the property consent, e?pressly or i'pliedly, to the sub'ission of the Euestion to the probate court for adjud!'ent, or the interests of third persons are not thereby prejudiced, the reason for the e?ception bein! that the Euestion of "hether or not a particular 'atter should be resolved by the court in the e?ercise of its !eneral jurisdiction or of its li'ited jurisdiction as a special court Ce.!. probate, land re!istration, etc.D, is in reality not a jurisdictional but in essence of procedural one, involvin! a 'ode of practice "hich 'ay be "aived. ? ? ? ? ? ?. T-).) *on.,/)ra+,on. a..u0) 1r)a+)r *o1)n*y 2-)r), a. -)r), +-) Torr)n. +,+3) ,. no+ ,n +-) /)*)/)n+4. na0) 5u+ ,n o+-)r., a .,+ua+,on on 2-,*- +-,. Cour+ -a. a3r)a/y -a/ o**a.,on +o ru3) ? ? ?.<Ce'phasis OursD etitioner, in the present case, ar!ues that the parcels of land covered under the 6orrens syste' and re!istered in the na'e of private respondent corporations should be included in the inventory of the estate of the decedent astor ;. :i', alle!in! that after all the deter'ination by the probate court of "hether these properties should be included or not is 'erely provisional in nature, thus, not conclusive and subject to a final deter'ination in a separate action brou!ht for the purpose of adjud!in! once and for all the issue of title. ;et, under the peculiar circu'stances, "here the parcels of land are re!istered in the na'e of private respondent corporations, the jurisprudence pronounced in BOLISA vs., ALCI! $52% is of !reat essence and finds applicability, thus=
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<It does not 'atter that respondent+ad'inistratri? has evidence purportin! to support her clai' of o"nership, for, on the other hand, petitioners have a 6orrens title in their favor, "hich under the la" is endo"ed "ith incontestability until after it has been set aside in the 'anner indicated in the la" itself, "hich, of course, does not include, brin!in! up the 'atter as a 'ere incident in special proceedin!s for the settle'ent of the estate of deceased persons. ? ? ?< <? ? ?. In re!ard to such incident of inclusion or e?clusion, Be hold that if a property covered by 6orrens title is involved, the presu'ptive conclusiveness of such title should be !iven due "ei!ht, and in the absence of stron! co'pellin! evidence to the contrary, the holder thereof should be considered as the o"ner of the property in controversy until his title is nullified or 'odified in an appropriate ordinary action, particularly, "hen as in the case at bar, possession of the property itself is in the persons na'ed in the title. ? ? ?< 52

& perusal of the records "ould reveal that no stron! co'pellin! evidence "as ever presented by petitioner to bolster her bare assertions as to the title of the deceased astor ;. :i' over the properties. Even so, .D. #45), other"ise >no"n as, < 6he roperty -e!istration Decree<, proscribes collateral attac> on 6orrens 6itle, hence= <??? ??? ???

Section 2(. Certificate not subject to collateral attac>. + & certificate of title shall not be subject to collateral attac>. It cannot be altered, 'odified or cancelled e?cept in a direct proceedin! in accordance "ith la".< In CUIZON vs. RAMOLETE, "here si'ilarly as in the case at bar, the property subject of the controversy "as duly re!istered under the 6orrens syste', Be cate!orically stated= <? ? ? @avin! been apprised of the fact that the property in Euestion "as in the possession of third parties and 'ore i'portant, covered by a transfer certificate of title issued in the na'e of such third parties, the respondent court should have denied the 'otion of the respondent ad'inistrator and e?cluded the property in Euestion fro' the inventory of the property of the estate. It had no authority to deprive such third persons of their possession and o"nership of the property. ? ? ?< Inas'uch as the real properties included in the inventory of the estate of the late astor ;. :i' are in the possession of and are re!istered in the na'e of private respondent corporations, "hich under the la" possess a personality separate and distinct fro' their stoc>holders, and in the absence of any co!ency to shred the veil of corporate fiction, the presu'ption of conclusiveness of said titles in favor of private respondents should stand undisturbed. &ccordin!ly, the probate court "as re'iss in denyin! private respondentsA 'otion for e?clusion. Bhile it 'ay be true that the -e!ional 6rial Court, actin! in a restricted capacity and e?ercisin! li'ited jurisdiction as a probate court, is co'petent to issue orders involvin! inclusion or e?clusion of certain properties in the inventory of the estate of the decedent, and to adjud!e, albeit, provisionally the Euestion of title over properties, it is no less true that such authority conferred upon by la" and reinforced by jurisprudence, should be e?ercised judiciously, "ith due re!ard and caution to the peculiar circu'stances of each individual case. Not"ithstandin! that the real properties "ere duly re!istered under the 6orrens syste' in the na'e of private respondents, and as such "ere to be afforded the presu'ptive conclusiveness of title, the probate court obviously opted to shut its eyes to this !lea'y fact and still proceeded to issue the i'pu!ned orders.

9y its denial of the 'otion for e?clusion, the probate court in effect acted in utter disre!ard of the presu'ption of conclusiveness of title in favor of private respondents. Certainly, the probate court throu!h such bra8en act trans!ressed the clear provisions of la" and infrin!ed settled jurisprudence on this 'atter. Moreover, petitioner ur!es that not only the properties of private respondent corporations are properly part of the decedentAs estate but also the private respondent corporations the'selves. 6o rivet such fli'sy contention, petitioner cited that the late astor ;. :i' durin! his lifeti'e, or!ani8ed and "holly+o"ned the five corporations, "hich are the private respondents in the instant case. $54% etitioner thus attached as &nne?es <G< $5*% and <,< $50% of the petition for revie" affidavits e?ecuted by 6eresa :i' and :ani Benceslao "hich a'on! others, contained aver'ents that the incorporators of Kni"ide Distributin!, Inc. included on the list had no actual participation in the or!ani8ation and incorporation of the said corporation. 6he affiants added that the persons "hose na'es appeared on the articles of incorporation of Kni"ide Distributin!, Inc., as incorporators thereof, are 'ere du''ies since they have not actually contributed any a'ount to the capital stoc> of the corporation and have been 'erely as>ed by the late astor ;. :i' to affi? their respective si!natures thereon.
54 5* 50

It is settled that a corporation is clothed "ith personality separate and distinct fro' that of the persons co'posin! it. It 'ay not !enerally be held liable for that of the persons co'posin! it. It 'ay not be held liable for the personal indebtedness of its stoc>holders or those of the entities connected "ith it. $5(%
5(

-udi'entary is the rule that a corporation is invested by la" "ith a personality distinct and separate fro' its stoc>holders or 'e'bers. In the sa'e vein, a corporation by le!al fiction and convenience is an entity shielded by a protective 'antle and i'bued by la" "ith a character alien to the persons co'prisin! it. Nonetheless, the shield is not at all ti'es invincible. 6hus, in FIRST P"ILIPPINE INTERNATIONAL BAN# vs. COURT OF APPEALS $5)%, Be enunciated=
5)

<? ? ? Bhen the fiction is ur!ed as a 'eans of perpetratin! a fraud or an ille!al act or as a vehicle for the evasion of an e?istin! obli!ation, the circu'vention of statutes, the achieve'ent or perfection of a 'onopoly or !enerally the perpetration of >navery or cri'e, the veil "ith "hich the la" covers and isolates the corporation fro' the 'e'bers or stoc>holders "ho co'pose it "ill be lifted to allo" for its consideration 'erely as an a!!re!ation of individuals. ? ? ?<

54 5* 50 5( 5)

iercin! the veil of corporate entity reEuires the court to see throu!h the protective shroud "hich e?e'pts its stoc>holders fro' liabilities that ordinarily, they could be subject to, or distin!uishes one corporation fro' a see'in!ly separate one, "ere it not for the e?istin! corporate fiction. $/1%
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6he corporate 'as> 'ay be lifted and the corporate veil 'ay be pierced "hen a corporation is just but the alter e!o of a person or of another corporation. Bhere bad!es of fraud e?ist, "here public convenience is defeatedJ "here a "ron! is sou!ht to be justified thereby, the corporate fiction or the notion of le!al entity should co'e to nau!ht. $/#%
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Gurther, the test in deter'inin! the applicability of the doctrine of piercin! the veil of corporate fiction is as follo"s= #D Control, not 'ere 'ajority or co'plete stoc> control, but co'plete do'ination, not only of finances but of policy and business practice in respect to the transaction attac>ed so that the corporate entity as to this transaction had at the ti'e no separate 'ind, "ill or e?istence of its o"nJ C5D Such control 'ust have been used by the defendant to co''it fraud or "ron!, to perpetuate the violation of a statutory or other positive le!al duty, or dishonest and unjust act in contravention of plaintiffs le!al ri!htJ and C/D 6he aforesaid control and breach of duty 'ust pro?i'ately cause the injury or unjust loss co'plained of. 6he absence of any of these ele'ents prevent <piercin! the corporate veil<. $/5%
/5

Mere o"nership by a sin!le stoc>holder or by another corporation of all or nearly all of the capital stoc> of a corporation is not of itself a sufficient reason for disre!ardin! the fiction of separate corporate personalities. $//%
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Moreover, to disre!ard the separate juridical personality of a corporation, the "ron!+ doin! 'ust be clearly and convincin!ly established. It cannot be presu'ed. $/2%
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,rantin! arguendo that the -e!ional 6rial Court in this case "as not 'erely actin! in a li'ited capacity as a probate court, petitioner nonetheless failed to adduce co'petent evidence that "ould have justified the court to i'pale the veil of corporate fiction. 6ruly, the reliance reposed by petitioner on the affidavits e?ecuted by 6eresa :i' and :ani Benceslao is unavailin! considerin! that the afore'entioned docu'ents possess no "ei!hty probative value pursuant to the hearsay rule. 9esides it is i'perative for us to stress that such affidavits are inad'issible in evidence inas'uch as the affiants "ere not at all presented durin! the course of the proceedin!s in the lo"er court. 6o put it differently, for this Court to uphold the ad'issibility of said docu'ents "ould be to rele!ate fro' Our duty to apply such basic rule of evidence in a 'anner consistent "ith the la" and jurisprudence. /1 /# /5 // /2

Our pronounce'ent in PEOPLE BAN# AN! TRUST COMPAN vs. LEONI!AS finds pertinence=

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$/4%

<&ffidavits are classified as hearsay evidence since they are not !enerally prepared by the affiant but by another "ho uses his o"n lan!ua!e in "ritin! the affiantAs state'ents, "hich 'ay thus be either o'itted or 'isunderstood by the one "ritin! the'. Moreover, the adverse party is deprived of the opportunity to cross+e?a'ine the affiants. Gor this reason, affidavits are !enerally rejected for bein! hearsay, unless the affiant the'selves are placed on the "itness stand to testify thereon.< &s to the order $/*% of the lo"er court, dated #4 Septe'ber #))4, the Court of &ppeals correctly observed that the -e!ional 6rial Court, 9ranch )/ acted "ithout jurisdiction in issuin! said orderJ 6he probate court had no authority to de'and the production of ban> accounts in the na'e of the private respondent corporations.
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67!R!FOR!, in vie" of the fore!oin! disEuisitions, the instant petition is hereby DISMISSED for lac> of 'erit and the decision of the Court of &ppeals "hich nullified and set aside the orders issued by the -e!ional 6rial Court, 9ranch )/, actin! as a probate court, dated 12 3uly #))4 and #5 Septe'ber #))4 is &GGI-MED. "O OR%!R!%. Bellosillo, (Chairman), Mendoza, Quisumbing, and De Leon, Jr., JJ., concur.

Ca.) %,1).+ on Ru8,na L,0 9.. CA, Au+o Tru*:, T$A Cor;, )+. a3.
3uly 50, 51#1 -ufina :i' vs C&, &uto 6ruc>, 69& Corporation, Sspeed Distributin! Inc., &ctive Distributors, &lliance Mar>etin! Corporation, &ction Co'pany, Inc. C3anuary 52, 5111D 6ests to ierce the Veil of Corporate Giction Gacts= -ufina :i' is the survivin! spouse of astor :i' "hose estate is the subject of probate proceedin!s. 6he private respondents are corporations for'ed, or!ani8ed and e?istin! under hilippine :a"s and "hich o"n real properties. astor :i' died 3une #))2, -ufina :i' filed for the ad'inistration of the estate. 6he properties "hich "ere o"ned by the corporations "ere included in the inventory of the estate. 6hey filed for the e?clusion of the properties fro' said estate and the cancellation of the annotation of lis /4 /*

pendens in the 6C6s of said properties. 6he -6C !ranted the 'otions. @o"ever -ufina :i' filed an a'ended petition "hich averred that such corporations "ere o"ned by astor :i', that such "ere du''ies of astor :i', that those listed as incorporators are there only for the purpose of re!istration "ith the SEC, and that the real properties, althou!h re!istered in the na'e of the corporations, "ere actually acEuired by astor :i' durin! his 'arria!e "ith -ufina :i'. 6he -6C actin! on such 'otion set aside its order and ordered the -e!ister of Deeds to reinstate the lis pendens. 6he respondent filed for certiorari "ith the C& "hich !ranted its prayer. -ufina :i' disputes such decision and ur!es that not only are the properties of the corporations part of the estate but also the corporations the'selves. She cites that astor :i' durin! his lifeti'e or!ani8ed and "holly o"ned the 4 corporations. Issue= Bhether or not a corporation in its universality be the proper subject of and be included in the inventory of the estate of a deceased person? @eld= 6he real properties included in the inventory of the estate of the late astor :i' are in the possession of and are re!istered in the na'e of private respondent corporations, "hich under the la" possess a personality separate and distinct fro' their stoc>holders and in the absence of any co!ency to shred the veil of corporate fiction, the presu'ption of conclusiveness of said titles in favor of private respondents should stand. It is settled that a corporation is clothed "ith personality separate and distinct fro' that of persons co'posin! it. It 'ay not !enerally be held liable for that of the persons co'posin! it. It 'ay not be held liable for the personal indebtedness of its stoc>holders or those of the entities connected "ith it. & corporation by le!al fiction and convenience is an entity shielded by a protective 'antle and i'bued by la" "ith a character alien to the persons co'prisin! it. 9ut L"hen the fiction is ur!ed as a 'eans of perpetratin! a fraud or an ille!al act or as a vehicle for the evasion of an e?istin! obli!ation, the circu'vention of statutes, the achieve'ent or perfection of a 'onopoly or !enerally the perpetration of >navery or cri'e, the veil "ith "hich the la" covers and isolates the corporation fro'M "ill be lifted to allo" for its consideration 'erely as an a!!re!ation of individuals.N Girst hilippine International 9an> vs C& C545 SC-& 54)D 6he test in deter'inin! the applicability of piercin! the veil of corporation fiction is as follo"s= #D Control, not 'ere 'ajority or co'plete stoc> control but co'plete do'ination not only of finances but of policy and business practice in respect to the transaction attac>ed so that the corporate entity as of this transaction had at the ti'e no separate 'ind, "ill or e?istence of its o"n. 5D Such control 'ust have been used by the defendant to co''it fraud or "ron!, to perpetuate the violation of a statutory or other positive le!al duty, or dishonest and unjust act in contravention of plaintiffAs le!al ri!ht. /D 6he control and breach of duty 'ust pro?i'ately cause the injury. 6he absence of these ele'ents prevent the piercin!. etitioner failed to adduce evidence that "ould justify such piercin!. Mere o"nership by a sin!le stoc>holder or by a corporation of all or nearly all of the capital stoc> is not sufficient reason for disre!ardin! the fiction of separate corporate personalities.