G.R. No.

125986 January 28, 1999

LUXURIA HOMES, INC., and/or AIDA M.
POSADAS, petitioners,
vs.
HONORABLE COURT OF APPEALS, JAMES
BUILDER CONSTRUCTION and/or JAIME T.
BRAVO,respondents.

make payment. Bravo then filed a

complaint for specific performance
against Posadas but he included
Luxuria Homes as a co-defendant as he
alleged that Luxuria Homes was a mere
conduit of Posadas; that the said
corporation was created in order to
defraud Bravo and avoid the payment
of debt.

Facts:

Aida Posadas was the owner of a 1.6

hectare land in Sucat, Muntinlupa. In
1989, she entered into an agreement
with Jaime Bravo for the latter to draft
a
development
and
architectural
design for the said property.

Ruling: No. It was Posadas who entered into a

contract with Bravo in her personal capacity.
Bravo was not able to prove that Luxuria
Homes was a mere conduit of Posadas.

The contract price was P450,000.00.

Posadas gave a down payment of
P25,000.00.

Later, Posadas assigned her property to

Luxuria Homes, Inc. One of the
witnesses to the deed of assignment
and articles of incorporation was Jaime
Bravo.

In
1992,
Bravo
finished
the
architectural design so he proposed
that he and his company manage the
development of the property. But
Posadas turned down the proposal and
thereafter the business relationship
between the two went sour. Bravo then
demanded Posadas to pay them the
balance of their agreement as regards
the architectural design (P425k).

ISSUE: WON petitioner Luxuria Homes, Inc. be

held liable to private respondents for the
transactions supposedly entered into between
petitioner Posadas and private respondents?

Bravo also demanded payment for

some other expenses and fees he
incurred i.e., negotiating and relocating
the informal settlers then occupying
the land of Posadas. Posadas refused to

The Deed of Assignment dated 11 December

1989 and the Articles of Incorporation of
Luxuria Homes, Inc., issued 26 January 1990
were both signed by respondent Bravo himself
as witness. It cannot be said then that the
incorporation of petitioner Luxuria Homes and
the eventual transfer of the subject property to
it were in fraud of private respondents as such
were done with the full knowledge of
respondent Bravo himself.

Besides petitioner Posadas is not the majority

stockholder of petitioner Luxuria Homes, Inc.,
as erroneously stated by the lower court. The
Articles of Incorporation of petitioner Luxuria
Homes, Inc., clearly show that petitioner
Posadas owns approximately 33% only of the
capital stock. Hence petitioner Posadas cannot
be considered as an alter ego of petitioner
Luxuria Homes, Inc.

To disregard the separate juridical personality

of a corporation, the wrongdoing must be
clearly and convincingly established. It cannot
be presumed

Obviously in the instant case, private

respondents failed to show proof that petitioner
Posadas acted in bad faith. Consequently since
private respondents failed to show that
petitioner Luxuria Homes, Inc., was a party to
any of the supposed transactions, not even to
the agreement to negotiate with and relocate

the squatters, it cannot be held liable, nay

jointly and in solidum, to pay private
respondents. In this case since it was petitioner
Aida M. Posadas who contracted respondent
Bravo to render the subject services, only she
is liable to pay the amounts adjudged herein.