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COURT OF APPEALS
FACTS: Manuel R. Dulay Enterprises, Inc, a domestic corporation obtained various loans for the
construction of its hotel project, Dulay Continental Hotel (now Frederick Hotel). Manuel Dulay
by virtue of Board Resolution No 18 sold the subject property to spouses Maria Theresa and
Castrense Veloso. Maria Veloso (buyer), without the knowledge of Manuel Dulay, mortgaged
the subject property to private respondent Manuel A. Torres. Upon the failure of Maria Veloso to
pay Torres, the property was sold to Torres in an extrajudicial foreclosure sale. Torres filed an
action against the corporation, Virgilio Dulay and against the tenants of the apartment. RTC
ordered the corporation and the tenants to vacate the building. Petitioners: RTC had acted with
GAD when it applied the doctrine of piercing the veil of corporate entity considering that the sale
has no binding effect on corporation as Board Resolution No. 18 which authorized the sale of the
subject property was resolved without the approval of all the members of the board of directors
and said Board Resolution was prepared by a person not designated by the corporation to be its
secretary.
ISSUE: Whether or not the sale to Veloso is valid notwithstanding that it was resolved without
the approval of all the members of the board of directors.