Philippine National Bank v. Merelo B. Aznar; Matias B. Aznar Iii; Jose L. Aznar (Deceased)

Summary

This consolidated Supreme Court case involved disputes over property rights to three parcels of land originally owned by defunct Rural Insurance and Surety Company, Inc. (RISCO). Stockholders contributed P212,720.00 for RISCO's rehabilitation to purchase the properties, claiming this created an express trust making them beneficial owners. Philippine National Bank acquired the properties through foreclosure proceedings. The RTC ruled in favor of stockholders, finding an express trust existed. The Court of Appeals reversed, characterizing the arrangement as a loan secured by lien, and ordered PNB to reimburse the stockholders. The Supreme Court dismissed the case entirely, holding that: (1) judgment on pleadings was improper due to genuine factual issues; (2) the arrangement was a loan, not an express trust; (3) stockholders cannot claim ownership of corporate property due to separate corporate personality doctrine; and (4) the stockholders' right to reimbursement had prescribed under the 10-year limitation period for written contracts. The decision reinforced the principle of separate corporate personality and the distinction between stockholder rights and corporate property ownership.