FACTS:

The case involves a petition for review seeking the reversal of the decision and resolution made by the Court of Appeals. The dispute revolves around the Ellice Agro-Industrial Corporation and the Margo Management and Development Corporation. According to the petitioners, the purposes for which these corporations were established, namely to prevent the Gala estate from being covered by the Comprehensive Agrarian Reform Program (CARP) and for estate planning, should be declared illegal and contrary to public policy.

The petitioners also argue that the lower court committed errors in the case. They assert that the court resolved the matter hastily without thoroughly examining the factual findings. Additionally, the lower court's ruling, which stated that the organization of the corporations was not illegal in terms of depriving one of the petitioners of her legitime, is contested by the petitioners.

Furthermore, the petitioners argue that the lower court should have pierced the veils of corporate fiction of the respondent corporations. They believe that the lower court should have disregarded the corporate entities and treated the corporations as mere instruments or alter egos of the individuals behind them.

ISSUES:

1. Whether the lower court erred in not resolving the case within two days from receipt of respondents' comment and in not making a determination of the issues of facts.

2. Whether the lower court erred in ruling that the organization of respondent corporations was not illegal for depriving petitioner of her legitime.

3. Whether the lower court erred in not piercing the veils of corporate fiction of respondent corporations Ellice and Margo.

4. Whether the factual findings of the Court of Appeals and the SEC En Banc are conclusive and not reviewable by the Supreme Court.

5. Whether the transfers of property to the children and encargados of the Gala spouses were relatively simulated or absolutely simulated.

6. Whether the reliefs sought by the petitioners should have been raised in a proceeding for settlement of estate.

7. Whether the veil of corporate fiction of Ellice and Margo should be pierced.

8. Whether the failure to pay capital gains taxes and documentary stamp taxes renders the underlying transactions void.

9. Whether or not a family corporation should serve as a rallying point for family unity and prosperity.

10. Whether or not the concept of mutual aid and security should be used to facilitate settlements of family corporate disputes.

RULING:

1. The Court held that the lower court did not err in resolving the case within two days from receipt of respondents' comment. As long as the lower court does not sacrifice the orderly administration of justice in favor of a speedy but reckless disposition of a case, it cannot be taken to task for rendering its decision with due dispatch. The Court of Appeals committed no reversible error in this regard.

2. The Court held that petitioners' contentions impugning the legality of the purposes for which Ellice and Margo were organized amount to collateral attacks, which are prohibited in this jurisdiction. The best proof of the purpose of a corporation is its articles of incorporation and by-laws. A perusal of the Articles of Incorporation of Ellice and Margo shows no sign of the allegedly illegal purposes that petitioners are complaining of. The Court also held that concerns regarding the circumvention of land reform laws should be brought before the Department of Agrarian Reform Adjudication Board (DARAB) as it has primary jurisdiction over the matter. With regard to the claim of using Ellice and Margo as tools for the avoidance of estate taxes, the Court held that the legal right of a taxpayer to reduce taxes by means permitted by law cannot be doubted.

3. The Court held that even if Ellice and Margo were organized for the purpose of exempting the properties of the Gala spouses from the coverage of land reform legislation and avoiding estate taxes, their separate juridical personalities cannot be disregarded. The allegations of lack of corporate formalities should be addressed in an administrative case before the SEC.

4. The factual findings of the Court of Appeals and the SEC En Banc are conclusive and not reviewable by the Supreme Court. However, in the interest of equity, the Supreme Court reviewed and affirmed the factual findings.

5. The transfers of property to the children and encargados of the Gala spouses were relatively simulated, as the intention of the Gala spouses was to donate portions of their property to their children and encargados.

6. The reliefs sought by the petitioners should have been raised in a proceeding for settlement of estate, not in the current intra-corporate controversy.

7. The veil of corporate fiction of Ellice and Margo should not be pierced since there is no proof that they were being used as a cloak or cover for fraud or illegality.

8. The failure to pay capital gains taxes and documentary stamp taxes does not render the underlying transactions void. The books and records of the corporation are generally admissible as evidence of corporate acts and proceedings.

9. A family corporation should serve as a rallying point for family unity and prosperity, not as a flashpoint for familial strife.

10. The concept of mutual aid and security should be used to facilitate more civil settlements of family corporate disputes.

PRINCIPLES:

• Collateral attacks on the legality of a corporation's purposes stated in its articles of incorporation and by-laws are prohibited.

• Concerns regarding the circumvention of specific laws should be brought before the administrative body with primary jurisdiction over the matter.

• Taxpayers have the legal right to reduce or avoid taxes by means permitted by law.

• Allegations of lack of corporate formalities should be addressed in an administrative case before the SEC.

• Factual findings of the Court of Appeals are conclusive and not reviewable by the Supreme Court.

• Factual findings of administrative bodies, such as the SEC, will not be interfered with by the courts unless there is grave abuse of discretion or lack of substantial evidence.

• Transfers of property can be deemed relatively simulated if there is an evident intention to donate portions of the property.

• Reliefs related to the distribution and partition of an estate should be sought in a proceeding for settlement of estate.

• The veil of corporate fiction can only be pierced if there is proof that the corporation is being used as a cloak or cover for fraud or illegality.

• Failure to pay taxes on a transaction does not render the transaction void if there are other means to prove its existence.

• Family corporations should promote family unity and prosperity.

• Mutual aid and security are driving forces behind the formation of family corporations.

• Parties involved in family corporate disputes should strive for more civil and amicable settlements.