I.SHORT TITLE: SILVERIO, JR. V.

FBCI

II. FULL TITLE: Ricardo S. Silverio, Jr., Esses Development Corporation, and Tri-Star
Farms, Inc. versus Filipino Business Consultants, Inc. – G.R. No.
143312,
August 12, 2005, J. Carpio

III. TOPIC: Doctrine of Separate Juridical Personality

IV. STATEMENT OF FACTS:

The subject matter is a 62-hectare land in Calatagan, Batangas. Esses and Tri-star executed a
Deed of Sale with Assumption of Mortgage in favor of FBCI and the former failed to redeem the
property.

FBCI filed a Petition for Consolidation of Title to the land before the RTC Balayan and obtained
a judgment by default and was issued a writ of possession. FBCI took possession of the subject
land.

The judgment by default and the writ of possession was later set aside and nullified after Silverio
Jr., Esses, and Tri-star filed a petition for relief from judgment because of lack of jurisdiction as
FBCI forged the service of summons on them.

The petitioners were then properly served summons. The RTC Balayan issued an Order that
restored the right of possession of the land to the petitioners as a consequence of the nullification
of the judgment by default. The trial court denied FBCI’s motion for reconsideration. It then
filed a petition for certiorari with the Court of Appeals but it was denied. The Supreme Court
also denied the petition. Such order has attained finality.

Meanwhile, FBCI filed a motion to suspend the enforcement of the writ of possession. It claims
the happening of supervening event that it is the new owner of Esses and Tri-star because it
purchased the substantial and controlling assets of the two corporations.

RTC Balayan ordered the suspension of the writ of possession it issued in favor of the
petitioners. The trial court reasoned out that it would violate the rule against forum shopping
because at this time, FBCI’s motion for reconsideration filed earlier with the CA was still
pending. It also noted that FBCI barricaded the perimeter of the land to block the petitioners and
even threatened each other with violence so the suspension of the writ is warranted to avoid
violence.

Consequently, the trial court also had to rule on the claim of supervening event that would make
the execution of the writ of possession absurd as FBCI alleges that it now owns the controlling
interest of Esses and Tri-star. It lifted the suspension of the writ of possession but cancelled the
hearings on the supervening event hoping that the appellate court will resolve this issue. The trial
court said that it would violate the rule against forum shopping because a motion for
reconsideration was still pending before the appellate court.

V. STATEMENT OF THE CASE:

The petitioners filed a petition for review of the order of RTC Balayan, the order that suspended
the enforcement of the writ of possession that it previously issued in favor of the petitioners.
FBCI, now called Filipino Vastland Company, sought to suspend the writ on the ground of
supervening event.

VI. ISSUE:
Whether or not there was a supervening event.

VII. RULING:
No.

Indeed, the court may stay the execution of a judgment when supervening events bring about a
material change in the situation between the parties. The supervening events must have a direct
effect on the matter already settled or must create a substantial change in the rights and
obligations of the parties which would make the final judgment unjust, impossible or inequitable.

However, there was no judgment on the merits in this case. The judgment by default in favor of
FBCI was already nullified. The case is in fact, still being litigated before the RTC Balayan.
Also, the writ of possession is not a judgment on the merits as it is only a mere consequence of
the nullification of the earlier judgment by default. This is only an order of restitution that placed
the parties in the position prior to the voided judgment by default.

The trial court should have decided on the issue of supervening event after the proper service of
summons as they have the power and jurisdiction to do so. Instead of this, it referred the issue to
the appellate court. Courts must execute its functions and not succumb to any threats from any
party. It is apparent that there was no supervening in this case.

FBCI’s acquisition of the “substantial and controlling shares of stocks” of Esses and Tri-star
does not create a substantial change that would grant the possession of the land to FBCI. The
subject land is a corporate property of Esses and Tri-star. Esses and Tri-star are corporation. A
corporation has a personality distinct from that of its stockholders.

A corporation is a juridical person distinct from the members composing it. Properties in the
name of the corporation are owned by it as an entity separate and distinct from its members.
While shares of stocks constitute personal property, they do not represent property of the
corporation. The corporation has properties of its own. A share of stock only represents an
aliquot part of the corporation’s property, or the right to share in its proceeds but its holder is not
the owner of any part of the capital of the corporation nor is he entitled to the possession of any
definite portion of its property or assets.

Therefore, FBCI’s acquisition of the substantial and controlling shares of stocks of the two
corporations does not mean that they have any legal right or title to any of the properties of Esses
and Tri-star. It merely has an interest in each corporation’s properties that is only equitable or
beneficial in nature. Even if FBCI is the controlling shareholder of the corporations, it will not
make it the owner of any of its properties.
VIII. DISPOSITIVE PORTION:
WHEREFORE, we GRANT the petition. The Regional Trial Court, Branch XI, Balayan,
Batangas is ordered to immediately execute the writ of possession in the Civil Case No. 3356 in
favor of Esses Development Corporation and Tri-star Farms, Inc. through their representative,
Ricardo S. Silversio, Jr. No costs.

SO ORDERED.

IX. PREPARED BY: Ian Joshua Romasanta