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Luxuria Homes V CA Digest

Posadas owned land that she contracted with Bravo to design plans for developing. Posadas later assigned the land to Luxuria Homes, Inc., which Bravo witnessed. When their business relationship soured, Bravo sued both Posadas and Luxuria Homes for payment, alleging Luxuria Homes was created to defraud him. However, the court found Luxuria Homes should not be impleaded because Posadas contracted with Bravo personally, Bravo could not prove Luxuria Homes was a mere conduit, and Bravo witnessed Luxuria Homes' creation, so he could not claim it was to defraud him. The court upheld Luxuria Homes' separate juridical personality from Pos

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326 views1 page

Luxuria Homes V CA Digest

Posadas owned land that she contracted with Bravo to design plans for developing. Posadas later assigned the land to Luxuria Homes, Inc., which Bravo witnessed. When their business relationship soured, Bravo sued both Posadas and Luxuria Homes for payment, alleging Luxuria Homes was created to defraud him. However, the court found Luxuria Homes should not be impleaded because Posadas contracted with Bravo personally, Bravo could not prove Luxuria Homes was a mere conduit, and Bravo witnessed Luxuria Homes' creation, so he could not claim it was to defraud him. The court upheld Luxuria Homes' separate juridical personality from Pos

Uploaded by

MalolosFire Bulacan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

302 SCRA 315 – Business Organization – Corporation Law – Piercing the Veil of Corporate

Fiction
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. 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). 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 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.
ISSUE: Whether or not Luxuria Homes should be impleaded.
HELD: 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. Posadas
owns just 33% of Luxuria Homes. Further, when Luxuria Homes was created, Bravo was
there as a witness. So how can he claim that the creation of said corporation was to defraud
him. The eventual transfer of Posadas’ property to Luxuria was with the full knowledge of
Bravo. The agreement between Posadas and Bravo was entered into even before Luxuria
existed hence Luxuria was never a party thereto. Whatever liability Posadas incurred arising
from said agreement must be borne by her solely and not in solidum with Luxuria. To
disregard the separate juridical personality of a corporation, the wrongdoing must be clearly
and convincingly established. It cannot be presumed.

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