G.R. No. 47013, February 17, 2000 FACTS:
On April 6, 1965, The Associated Anglo-American Tobacco Corporation entered into a "Contract of Sales Agent" with Andres Lao. Under the contract, Lao agreed to sell cigarettes manufactured and shipped by the Corporation to his business. Lao would in turn remit the sales proceeds to the Corporation. For his services, Lao would receive commission depending on the kind of cigarettes sold, fixed monthly salary, and operational allowance. For several months, Lao had religiously complied with his obligations, however until about seven (7) months later, Lao failed to accomplish his monthly sales report. Re was reminded of his enormous accounts and the difficulty of obtaining a tally thereon despite Lao's avowal of regular remittances of his collections.
Because of this he was summoned to the office of the corporation where his liability amounted to P525,053.47. The corporation stopped providing Lao with the products.
Subsequently, Andres, Jose and Tomas Lao brought a complaint for accounting and damages with writ of preliminary injunction against the Corporation. The CFI rendered judgment in favor of petitioners. Meanwhile, on June 24, 1974 and during the pendency of Civil Case No. 4452, Esteban Co, representing the Corporation as its new vice-president, filed an affidavit of complaint alleging that Lao failed to remit the amount of P224,585.82 which he allegedly misappropriated and converted to his personal use, which resulted to the filing of an estafa case against Lao. In turn Lao filed a case for malicious prosecution against the corporation. In this case, Co was made liable solidarily with the corporation for malicious prosecution.
ISSUE:
Whether or not Co should be made liable solidarily with the corporation for malicious prosecution.
RULING:
YES.
Co asserted that he should not be held jointly and severally liable with the Corporation because in filing the affidavit-complaint against respondent Lao, he was acting as the executive vice-president of the Corporation and his action was within the scope of his authority as such corporate officer. Based from the records, Co was the vice-president of the corporation when he filed the affidavit- complaint. The corporation failed tomake an issue out of his authority to file said case. Upon well-established principles of pleading, lack of authority of an officer of a corporation to bind it by contract executed by him in its name, is a defense which should have been specially pleaded by the Corporation
The Corporation's failure to interpose such a defense could only mean that the filing of the affidavit-complaint by petitioner Co was with the consent and authority of the Corporation. In the same vein, petitioner Co may not be held personally liable for acts performed in pursuance of an authority and therefore, holding him solidarily liable with the Corporation for the damages awarded to respondent Lao does accord with law and jurisprudence.
133 | P a g e MITA PARDO DE TAVERA
vs.
PHILIPPINE TUBERCULOSIS SOCIETY, INC., et al GR. No. L-48928, February 25, 1982
FACTS:
The plaintiff alleges that she is a doctor of Medicine by profession and a recognized specialist in the treatment of tuberculosis and that she was a member of the Board of Directors of the defendant Society, in representation of the Philippine Charity Sweepstakes Office. She was also duly appointed as Executive Secretary of the Society. However, she was removed from such position without any cause. This was denied by the respondents. The appellate courts rendered decision in favor of respondents.
ISSUE:
Whether or not the petitioner is an officer of the corporation.
RULING:
NO.
The Court ruled that there was no clear indication that the petitioner was appointed to a permanent position. Although the minutes of the organizational meeting show that the Chairman mentioned the need of appointing a "permanent" Executive Secretary, such statement alone cannot characterize the appointment of petitioner without a contract of employment definitely fixing her term. Without such term, the appointment was deemed to be temporary, and is subject to the pleasure of the Board or of the appointing body. Hence, when the Board opts to replace the incumbent, technically there is no removal but only expiration of term and in an expiration of term, there is no need of prior notice, due hearing or sufficient grounds before the incumbent can be separated from office.
134 | P a g e Corporate Officers; Qualifications and Disqualifications; Authority and Liabilities MATLING INDUSTRIAL AND COMMERCIAL CORPORATION, RICHARD K.
SPENCER, CATHERINE SPENCER, AND ALEX MANCILLA vs.
RICARDO R. COROS
G.R. No. 157802, October 13, 2010 FACTS:
The respondent filed a case for illegal dismissal against Matling and some of its corporate officers (petitioners) in the NLRC. He was the Vice President for Finance and Administration when he was dismissed. The petitioner opposed said complaint on the ground that the issue at hand is an intra- corporate dispute which falls under the jurisdiction of the SEC. The respondent opposed the same contending that his being in the position was doubtful that he had not been formally elected as such. The LA ruled in favor of petitioner but the same was reversed by the NLRC, and to which the CA affirmed.
ISSUE:
Whether or not respondent is a corporate officer.
RULING:
NO.
The petitioners contend that the position of Vice President for Finance and Administration was a corporate office, having been created by Matling‘s President pursuant to the by-Law.
However, the Court explained that an "office" is created by the charter of the corporation and the officer is elected by the directors or stockholders. On the other hand, an employee occupies no office and generally is employed not by the action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee. In this case, respondent was appointed vice president for nationwide expansion by Malonzo, petitioner‘'s general manager, not by the board of directors of petitioner. Also his compensation was paid by Malonzo. Thus, respondent was an employee, not a "corporate officer.
Also, the Board of Directors of Matling could not validly delegate the power to create a corporate office to the President, in light of Section 25 of the Corporation Code requiring the Board of Directors itself to elect the corporate officers. Verily, the power to elect the corporate officers was a discretionary power that the law exclusively vested in the Board of Directors, and could not be delegated to subordinate officers or agents.The office of Vice President for Finance and Administration created by Matling‘s President pursuant to the by- law was an ordinary, not a corporate, office.
In this case the Court enumerated the minimum set of officers who are the president, vice president, secretary and treasurer and modern corporation statutes usually designate them as the officers of the corporation. However, other offices are sometimes created by the charter or by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to create additional offices as may be necessary.
135 | P a g e LESLIE OKOL
vs.
SLIMMERS WORLD INTERNATIONAL, BEHAVIOR MODIFICATIONS, INC., and RONALD JOSEPH MOY
G.R. No. 160146, December 11, 2009 FACTS:
Leslie Okol, a Vice President of Slimmers World, was terminated from employment after an incident with the Bureau of Customs regarding equipment belonging to/consigned to Slimmers World. As such, Okolfiled a complaint with the Arbitration branch of the NLRC against Slimmers World for illegal suspension, illegal dismissal, unpaid commissions, damages, and attorney‘s fees, with prayer for reinstatement and payment of backwages.
Slimmers World filed a Motion to Dismiss the case, asserting that the NLRC had no jurisdiction over the subject matter of the complaint. Slimmers World‘s motion was sustained, with the labor arbiter ruling that since Okol was the vice president at the time of her dismissal, being a corporate officer, the dispute was an intra-corporate controversy falling outside the jurisdiction of the arbitration branch. On appeal, the NLRC reversed the LA decision and ordered Slimmers World to reinstate Okol. The CA subsequently set aside the NLRC decision and ruled that the case was an intra-corporate controversy, and falls within the jurisdiction of the regular courts pursuant to RA 8799.
ISSUE:
Whether Okol was a corporate officer of Slimmers World.
RULING:
YES.
Okol was a corporate officer at the time of her dismissal. According to the Amended By-Laws of Slimmers World which enumerate the power of the board of directors as well as the officers of the corporation, the general management of the corporation shall be vested in a board of five directors who shall be stockholders and who shall be elected annually by the stockholders and who shall serve until the election and qualification of their successors and like the Chairman of the Board and the President, the Vice President shall be elected by the Board of Directors from its own members. The Vice President shall be vested with all the powers and authority and is required to perform all the duties of the President during the absence of the latter for any cause. The Vice President will perform such duties as the Board of Directors may impose upon him from time to time. This clearly shows that Okol was a director and officer of Slimmers World.
An office is created by the charter of the corporation and the officer is elected by the directors and stockholders. On the other hand, an employee usually occupies no office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee.
136 | P a g e GLORIA V. GOMEZ
vs.
PNOC DEVELOPMENT AND MANAGEMENT CORPORATION (PDMC) - (formerly known as FILOIL DEVELOPMENT AND MANAGEMENT CORPORATION [FDMC])
G.R. No. 174044, November 27, 2009 FACTS:
Petitioner Gloria V. Gomez used to work as Manager of the Legal Department of Petron Corporation, then a government-owned corporation. With Petron‘s privatization, she availed of the company‘s early retirement program and left that organization on April 30, 1994. On the following day, May 1, 1994, however, Filoil Refinery Corporation (Filoil), also a government-owned corporation, appointed her its corporate secretary and legal counsel, with the same managerial rank, compensation, and benefits that she used to enjoy at Petron. However, the privatization did not materialize so Gomez continued to serve as corporate secretary of respondent PDMC.
On March 29, 1999 the new board of directors of respondent PDMC removed petitioner Gomez as corporate secretary. Further, at the board‘s meeting on October 21, 1999 the board questioned her continued employment as administrator. In answer, she presented the former president‘s May 24, 1998 letter that extended her term. Dissatisfied with this, the board sought the advice of its legal department, which expressed the view that Gomez‘s term extension was an ultra vires act of the former president. It reasoned that, since her position was functionally that of a vice-president or general manager, her term could be extended under the company‘s by-laws only with the approval of the board. The legal department held that her ―de facto‖
tenure could be legally put to an end. Petitioner Gomez for her part conceded that as corporate secretary, she served only as a corporate officer. But, when they named her administrator, she became a regular managerial employee. Consequently, the respondent PDMC‘s board did not have to approve either her appointment as such or the extension of her term in 1998.
ISSUE:
Whether or not Gomez is an ordinary employee whose complaint is within the jurisdiction of the NLRC.
RULING:
YES.
The relationship of a person to a corporation, whether as officer or agent or employee, is not determined by the nature of the services he performs but by the incidents of his relationship with the corporation as they actually exist. That the employee served concurrently as corporate secretary for a time is immaterial. A corporation is not prohibited from hiring a corporate officer to perform services under circumstances which will make him an employee. Indeed, it is possible for one to have a dual role of officer and employee. NLRC has jurisdiction over a complaint filed by one who served both as corporate officer and employee, when the money claims were made as an employee and not as a corporate officer.
137 | P a g e E. B. VILLAROSA & PARTNER CO., LTD.
vs.
HON. HERMINIO I. BENITO, in his capacity as Presiding Judge, RTC, Branch 132, Makati City and IMPERIAL DEVELOPMENT CORPORATION
G.R. No. 136426, August 6, 1999 FACTS:
Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership. Petitioner and private respondent executed a Deed of Sale with Development Agreement wherein the former agreed to develop certain parcels of land belonging to the latter into a housing subdivision for the construction of low cost housing units. They further agreed that in case of litigation regarding any dispute arising therefrom, the venue shall be in the proper courts of Makati. Subsequently, a complaint for breach of contract was filed by the respondent against the plaintiff allegedly for failure of the latter to comply with its contractual obligation in that, other than a few unfinished low cost houses, there were no substantial developments. Summons, together with the complaint, were served upon the defendant, through its Branch Manager Engr.
Wendell Sabulbero. The respondent moved for dismissal on the ground that there was improper service of summons.
The trial court rendered decision denying the motion to dismiss. Hence this petition.
ISSUE:
Whether or not there was imporoper service of summons.
RULING:
YES.
Section 13, Rule 14 of the Rules of Court which provided that: Service upon private domestic corporation or partnership, If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors.
The Court ruled that under such provision, it is clear upon whom the service of summons should be made. The designation of persons or officers who are authorized to accept summons for a domestic corporation or partnership is now limited and more clearly specified. The rule now states "general manager" instead of only "manager";
"corporate secretary" instead of "secretary"; and "treasurer" instead of "cashier." The phrase "agent, or any of its directors" is conspicuously deleted in the new rule. In this case, since the summons was served upon a branch manager, who is not authorized to accept the same, there was improper service of summons.
138 | P a g e SUPREME STEEL PIPE CORPORATION and REGAN SY
vs. ROGELIO BARDAJE G.R. No. 170811, April 24, 2007 FACTS:
Petitioner Supreme Steel Pipe Corporation (SSPC) was primarily engaged in the business of manufacturing steel pipes. It employed respondent Rogelio Bardaje as a warehouseman on March 14, 1994. SSPC employees were required to wear a uniform (a yellow t-shirt with a logo and the marking "Supreme") while at work.
Due to an incident, his employment was terminated on the ground of multiple infractions of company rules. He thus filed a case for illegal dismissal. The LA ruled for the respondent, while the NLRC reversed said decision. The CA ruled favoring the LA.
ISSUE:
Whether or not Regan Sy, the president of SSPC, may be held solidarily liable with the latter.
RULING:
NO.
It appears that respondent impleaded SSPC President Regan Sy only because he is an officer/agent of the company. However, the court ruled that he cannot be made solidarily liable because for the termination of respondent‘s employment, since there is no showing that the dismissal was attended with malice or bad faith. The rule still stand that the liabilities of a corporation should not be directly imputed to its officers and it shall be borne entirely by the corporation itself.
139 | P a g e CAGAYAN VALLEY DRUG CORPORATION
vs.
COMMISSIONER OF INTERNAL REVENUE G.R. No. 151413, February 13, 2008 FACTS:
Petitioner is a duly licensed retailer of medicine and other pharmaceutical products. In compliance with Revenue Regulation No. (RR) 2-94, petitioner treated the 20% sales discounts granted to qualified senior citizens in 1995 as deductions from the gross sales in order to arrive at the net sales, instead of treating them as tax credit as provided by Section 4 of RA 7432. however, petitioner filed with the Bureau of Internal Revenue (BIR) a claim for tax refund/tax credit of the full amount of the 20%
sales discount it granted to senior citizens for the year 1995, allegedly totalling to P123,083.00. Because of the BIR‘s inaction, the petitioner filed a petition for review before the CTA, which denied its claim. The CA also denied the same on procedural grounds, such that the person who signed the verification and certification of absence of forum shopping, a certain Jacinto J. Concepcion, President of petitioner, failed to adduce proof that he was duly authorized by the board of directors to do so.
ISSUE:
Whether petitioner‘s president can sign the subject verification and certification without the approval of its Board of Directors.
RULING:
YES.
In several cases the court has recognized the authority of some corporate officers to sign the verification and certification against forum shopping. In these cases, the court allowed the: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the General Manager or Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case, to sign said documents, without need of a board resolution.
Also in this case, an authorization was belatedly submitted. Although belated, the court still accepts it as a valid and which it had cured the procedural infirmities of the case.
140 | P a g e SALOME PABON and VICENTE CAMONAYAN
vs.
NATIONAL LABOR RELATIONS COMMISSION and SENIOR MARKETING CORPORATION
G.R. No. 120457 September 24, 1998 FACTS:
On May 24, 1994 and June 22, 1994, complaints for illegal dismissal and non-payment of benefits were filed by petitioners Salome Pabon and Vicente Camonayan against private respondent Senior Marketing Corporation (SMC) and its Field Manager, R-Jay Roxas Summons and notices of hearings were sent to Roxas at private respondent's provincial office in 13 Valley Homes, Patul Road, Santiago, Isabela which were received by its bookkeeper, Mina Villanueva.
On September 15, 1994, the Labor Arbiter rendered a judgment by default after finding that private respondent tried to evade all the summons and orders of hearing by refusing to claim all the registered mail addressed to it.
ISSUE:
Whether or not Petitioners herein are authorized to receive summons in behalf of the corporation.
RULING:
YES.
Bookkeeper can be considered as an agent of private respondent corporation within the purview of Section 13, Rule 14 of the old Rules of Court. The rationale of all rules with respect to service of process on a corporation is that such service must be made to an agent or a representative so integrated with the corporation sued as to make it a priori supposable that he will realize his responsibilities and know what he should do with any legal papers served on him. The bookkeeper's task is one under consideration. The job of a bookkeeper is so integrated with the corporation that his regular recording of the corporation's "business accounts" and "essential facts about the transactions of a business or enterprise" safeguards the corporation from possible fraud being committed adverse to its own corporate interest.
Bookkeeper can be considered as an agent of private respondent corporation within the purview of Section 13, Rule 14 of the old Rules of Court. The rationale of all rules with respect to service of process on a corporation is that such service must be made to an agent or a representative so integrated with the corporation sued as to make it a priori supposable that he will realize his responsibilities and know what he should do with any legal papers served on him. The bookkeeper's task is one under consideration. The job of a bookkeeper is so integrated with the corporation that his regular recording of the corporation's "business accounts" and "essential facts about the transactions of a business or enterprise" safeguards the corporation from possible fraud being committed adverse to its own corporate interest.