G.R. No.

124715 January 24, 2000 323 SCRA 102

RUFINA LUY LIM, petitioner,

vs.
COURT OF APPEALS, AUTO TRUCK TBA CORPORATION, SPEED DISTRIBUTING, INC., ACTIVE
DISTRIBUTORS, ALLIANCE MARKETING CORPORATION, ACTION COMPANY, INC. respondents.

BUENA, J.:

FACTS: In 1994, Pastor Lim died. His wife, Rufina Lim petitioned with the lower court, acting as a probate
court, for the inclusion of 5 corporations into the inventory of the estate of Pastor Lim. The 5 corporations were:
Auto Truck Corporation, Alliance Marketing Corporation, Speed Distributing, Inc., Active Distributing, Inc. and
Action Company. Rufina alleged that the assets of these corporations were owned wholly by Pastor; that these
corporations themselves are owned by Pastor and they are mere dummies of Pastor. The corporations filed a
motion for exclusion from the estate. They presented proof (Torrens Titles) showing that the assets of the
corporations are in their respective names and titles. The probate court denied their motion. The Court of
Appeals reversed the decision of the probate court.

ISSUE: Whether or not the corporations and/or their assets should be included in the inventory of the estate.

HELD: No. As regards the assets, the corporations were able to present their respective Torrens Titles over
the disputed assets. It is true that a probate court may pass upon the question ownership albeit in a provisional
manner but still, a Torrens Title cannot be attacked collaterally in a probate proceeding, it must be attacked
directly in a separate proceeding.
As regards the corporations, to include them in the inventory is tantamount to the piercing of the veil of
corporate fiction because the probate court effectively adopted the theory of Rufina. This cannot be done.
Firstly, the probate court is sitting in a limited capacity. Secondly, Rufina was not able to present sufficient
evidence that indeed the corporations are mere conduits of Pastor. Mere ownership by a single stockholder or
by another corporation of all or nearly all of the capital stock of a corporation is not of itself a sufficient reason
for disregarding the fiction of separate corporate personalities. The veil can’t be pierced without any showing
that indeed the corporation is being used merely as a dummy. To disregard the separate juridical personality
of a corporation, the wrong-doing must be clearly and convincingly established. It cannot be presumed.