Marvel Bldg. vs.
David (94 SCRA 376)
EN BANC
[G.R. No. L-5081. February 24, 1954.]
MARVEL BUILDING CORPORATION, ET AL., Plaintiffs-Appellees, v. SATURNINO
DAVID, in his capacity as Collector, Bureau of Internal Revenue, Defendant-
Appellant.
DECISION. LABRADOR, J.:
DOCTRINE: The circumstantial evidence is not only convincing; it is conclusive.
The fact that Maria B. Castro advanced big sums of money to the corporation
without any previous arrangement or accounting, and the fact that the books of
accounts were kept as if they belonged to Maria B. Castro alone — these facts are
of patent and potent significance.
FACTS: Plaintiffs, as stockholders of Marvel Building Corporation sought to enjoin the
defendant Collector of Internal Revenue from selling at a public auction property which
were said to be registered in the name of said corporation.
Said properties were seized and distrained by defendant to collect war profits taxes
against Maria Castro who the former claims to be the sole owner of the said
corporation. Maria Castro owns P250,000 of the P1,025,000 capital of the corporation,
of the rest of the incorporators were her half-brothers, half-sister and a brother-in-law.
ISSUE: Whether Maria B. Castro is the owner of all the shares of stock of the Marvel
Building Corporation and the other stockholders mere dummies of hers?
HELD: YES.
The circumstantial evidence is not only convincing; it is conclusive.
The existence of endorsed certificates, discovered by the internal revenue agents
between 1943 and 1949 in the possession of the Secretary-Treasurer, the fact that
twenty-five certificates were signed by the president of the corporation, for no justifiable
reason, the fact that two sets of certificates were issued, the undisputed fact that Maria
B. Castro had made enormous profits and, therefore, had a motive to hide them to
evade the payment of taxes, the fact that the other subscribers had no incomes of
sufficient magnitude to justify their big subscriptions, the fact that the subscriptions were
not receipted for and deposited by the treasurer in the name of the corporation but were
kept by Maria B. Castro herself, the fact that the stockholders or the directors never
appeared to have ever met to discuss the business of the corporation, the fact that
Maria B. Castro advanced big sums of money to the corporation without any previous
arrangement or accounting, and the fact that the books of accounts were kept as if they
belonged to Maria B. Castro alone — these facts are of patent and potent significance.
What are their necessary implications? Maria B. Castro would not have asked them to
endorse their stock certificates, or be keeping these in her possession, if they were
really the owners. They never would have consented that Maria B. Castro keep the
funds without receipts or accounting, nor that she manages the business without their
knowledge or concurrence, were they owners of the stocks in their own rights. Each and
every one of the facts all set forth above, in the same manner, is inconsistent with the
claim that the stockholders, other than Maria B. Castro, owned their shares in their own
right.
On the other hand, each and every one of them, and all of them, can point to no other
conclusion than that Maria B. Castro was the sole and exclusive owner of the shares
and that they were only her dummies.
In our opinion, the facts and circumstances duly set forth above, all of which have been
proved to our satisfaction, prove conclusively and beyond reasonable doubt (section 89,
Rule 123 of the Rules of Court and section 42 of the Provisional law for the application
of the Penal Code) that Maria B. Castro is the sole and exclusive owner of all the shares
of stock of the Marvel Building Corporation and that the other partners are her dummies.
The judgment appealed from is hereby reversed.
