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1. ARSENIO T. MENDIOLA, vs.COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, PACIFIC FOREST RESOURCES, PHILS., INC. and/or CELLMARK AB,. G.R. No. 159333, July 31, 2006 FACTS: Pacific Forest Resources, Phils., Inc. (Pacfor) is a corporation organized and existing under the laws of California, USA. Pacfor entered into a "Side Agreement on Representative Office known as Pacific Forest Resources (Phils.), Inc." with petitioner Arsenio T. Mendiola (ATM) The Side Agreement outlines the business relationship of the parties with regard to the Philippine operations of Pacfor and that ATM will be its President. Petitioner's base salary and the overhead expenditures of the company shall be borne by the representative office and funded by Pacfor/ATM, since Pacfor Phils. is equally owned on a 50-50 equity by ATM and Pacfor-usa. On July 14, 1995, the SEC granted the application of private respondent Pacfor for a license to transact business in the Philippines under the name of Pacfor or Pacfor Phils. In July 2000, petitioner wrote Kevin Daley, Vice President for Asia of Pacfor, seeking confirmation of his 50% equity of Pacfor Phils. Private respondent Pacfor, through William Gleason, its President, replied that petitioner is not a part-owner of Pacfor Phils. because the latter is merely Pacfor-USA's representative office and not an entity separate and distinct from Pacfor-USA. "It's simply a 'theoretical company' with the purpose of dividing the income 50-50." Petitioner, claiming that he was made to believe that all along he was in a joint venture with them demanded payment of unpaid commissions and office furniture and equipment rentals, amounting to more than one million dollars. On the other hand, Pacfor, through counsel, ordered petitioner to turn over to it all papers, documents, files, records, and other materials that belong to Pacfor or Pacfor Phils. Subsequent thereto, petitioner filed his complaint for illegal dismissal, recovery of separation pay, and payment of attorney's fees with the NLRC. The Labor Arbiter ruled in favor of petitioner, finding there was constructive dismissal. Pacfor appealed to the NLRC which ruled in its favor. It held there was no employer-employee relationship between the parties. On appeal to the Court of Appeals, the appellate court upheld the ruling of the NLRC.Hence, this appeal. ISSUE: Whether or not there exoist employer-employee relationship between the parties. HELD: The Supreme Court held that ATM is an employee of private respondent Pacfor and that no partnership or co-ownership exists between the parties. In a partnership, the members become co-owners of what is contributed to the firm capital and of all property that may be acquired thereby and through the efforts of the members. The property or stock of the partnership forms a community of goods, a common fund, in which each party has a proprietary interest. This essential element, the community of interest, or co-ownership of, or joint interest in partnership property is absent in the relations between petitioner and private respondent Pacfor. Besides, a

corporation cannot become a member of a partnership in the absence of express authorization by statute or charter. This doctrine is based on the following considerations: (1) that the mutual agency between the partners, whereby the corporation would be bound by the acts of persons who are not its duly appointed and authorized agents and officers, would be inconsistent with the policy of the law that the corporation shall manage its own affairs separately and exclusively; and, (2) that such an arrangement would improperly allow corporate property to become subject to risks not contemplated by the stockholders when they originally invested in the corporation. No such authorization has been proved in the case at bar.

2. REPUBLIC PLANTERS BANK, vs. HON. ENRIQUE A. AGANA, et. Al., G.R. No. 51765 March 3, 1997 FACTS: Robes Corporation secured a loan from petitioner in the amount of P120,000.00. As part of the proceeds of the loan, preferred shares of stocks were issued to private respondent Corporation, through its officers then, private respondent Adalia F. Robes and one Carlos F. Robes. In other words, instead of giving the legal tender totaling to the full amount of the loan, which is P120,000.00, petitioner lent such amount partially in the form of money and partially in the form of stock certificates. Said stock certificates were in the name of private respondent Adalia F. Robes and Carlos F. Robes, who subsequently, however, endorsed his shares in favor of Adalia F. Robes. Thereafter, Robes proceeded against petitioner and filed a Complaint anchored on private respondents' alleged rights to collect dividends under the preferred shares in question and to have petitioner redeem the same under the terms and conditions of the stock certificates. The trial court rendered a decision in favor of private respondents and ordered Republic Planters Bank (RPB) to pay private respondents the face value of the stock certificates as redemption price. Aggrieved by the decision of the trial court, petitioner elevated the case to the Supreme Court based on pure questions of law. ISSUE: Whether or not private respondents have the right to compel petitioner to redeem the preferred shares as appearing in the stock certificates. HELD: At the outset, it is important to provide an overview on the nature of preferred shares and the redemption thereof. A preferred share of stock, on one hand, is one which entitles the holder thereof to certain preferences over the holders of common stock. The most common forms may be classified into two: (1) preferred shares as to assets; and (2) preferred shares as to dividends. The former is a share which gives the holder thereof preference in the distribution of the assets of the corporation in case of liquidation; the latter is a share the holder of which is entitled to receive dividends on said share to the extent agreed upon before any dividends at all are paid to the holders of common stock. Under the Corporation Code, it provides that the board of directors of a stock corporation may declare dividends only out of unrestricted retained earnings. Thus, the declaration of dividends is dependent upon the availability of surplus profit or unrestricted retained earnings, as the case may be. Preferences granted to preferred stockholders, moreover, do not give them a lien upon the property of the corporation nor make them creditors of the corporation, the right of the former being always subordinate to the latter. Dividends are thus payable only when there are profits earned by the corporation and as a general rule, even if there are existing profits, the board of directors has the discretion to determine whether or not dividends are to be declared. Redeemable shares, on the other hand, are shares usually preferred, which by their terms are redeemable at a fixed date, or at the option of either issuing corporation, or the stockholder, or both at a certain redemption price. While redeemable shares may be redeemed regardless of the existence of unrestricted retained earnings, this is subject to

the condition that the corporation has, after such redemption, assets in its books to cover debts and liabilities inclusive of capital stock. Redemption, therefore, may not be made where the corporation is insolvent or if such redemption will cause insolvency or inability of the corporation to meet its debts as they mature. In the present case, while the stock certificate does allow redemption, the option to do so was clearly vested in the petitioner bank. The redemption therefore is clearly the type known as "optional". Thus, except as otherwise provided in the stock certificate, the redemption rests entirely with the corporation and the stockholder is without right to either compel or refuse the redemption of its stock. Furthermore, the terms and conditions set forth therein use the word "may". It is a settled doctrine in statutory construction that the word "may" denotes discretion, and cannot be construed as having a mandatory effect. Moreover, the redemption of said shares cannot be allowed. As pointed out by the petitioner, the Central Bank made a finding that said petitioner has been suffering from chronic reserve deficiency and the prohibition from redeeming any preferred share is on the ground that said redemption would reduce the assets of the Bank to the prejudice of its depositors and creditors. Thus, redemption of preferred shares was prohibited for a just and valid reason.

3. SAN MIGUEL BUKID HOMEOWNERS ASSOCIATION, INC., vs.THE CITY OF MANDALUYONG, et. al. G.R. No. 153653, October 2, 2009 FACTS: Petitioner San Miguel Bukid Homeowners Association, Inc. an association of urban poor dwellers of San Miguel Bukid Compound, Plainview, Mandaluyong City, filed with the Regional Trial Court (RTC) of Mandaluyong City a Complaint3 for specific performance and damages against respondents City of Mandaluyong (City) and A.F. Calma General Construction (Calma). It is alleged therein that pursuant to the Citys Land for the Landless Program, petitioner and the City entered into a Memorandum of Agreement (MOA), whereby the City purchased lots and then transferred the same to petitioner with a first real estate mortgage in favor of the City. Subsequently, the City and Calma entered into a Contract Agreement for the latter to construct row houses and medium-rise buildings on the aforementioned lots within 540 calendar days for the benefit of petitioners members. In June 1995, Calma began construction, but in June 1996, work on the project was stopped. The period of 540 days elapsed sometime in November 1996, but the houses and buildings were not yet completed. Petitioners letters sent to the Mayor of the City requesting an update on the project remained unanswered. Hence, petitioner filed the complaint praying that the City and Calma be ordered to perform their respective undertakings and obligations under the Contract Agreement and to pay petitioner attorneys fees, exemplary damages and litigation expenses. Petitioner filed a Motion to Declare Defendant in Default. The RTC denied petitioners motion. The matter was elevated by petitioner to the CA via a petition for certiorari. However, the CA dismissed the petition outright because the person who signed the Verification/Certification of Non-Forum Shopping thereof did not appear to be authorized by petitioner. Petitioner filed a motion for reconsideration but the same was denied. Hence, the present petition. ISSUE: Whether or not the verification and certification attached to the petition for certiorari is sufficient for the filing of said petition. HELD: The Supreme Court held that if the real party-in-interest is a corporate body, an officer of the corporation can sign the certification against forum shopping so long as he has been duly authorized by a resolution of its board of directors." In this case, the Certificate of Board Resolution attached to the petition for certiorari filed with the CA only authorized its President, Evelio Barata, to initiate, sign, file and prosecute the Complaint for specific performance. Certiorari, as a special civil action, is an original action invoking the original jurisdiction of a court to annul or modify the proceedings of a tribunal, board or officer exercising judicial or quasi-judicial functions. It is an original and independent action that is not part of the trial or the proceedings on the complaint filed before the trial court. The petition for certiorari before the CA is, therefore, a separate and distinct action from the action for specific performance instituted before the RTC, as the writ of certiorari being prayed for is directed against the judicial or quasi-judicial body, not against the private parties in the original action for specific

performance. Such being the case, Resolution of the Board of Directors of petitioner association is not and cannot be considered as an authorization for its President, Evelio Barata, to initiate, sign, file and prosecute another case for the special civil action of certiorari. The CA was, thus, correct in dismissing the petition for lack of authority of Evelio Barata to sign the Certification of Non-Forum Shopping in representation of petitioner. Further, the subsequent attachment of the Secretarys Certificate to the Motion for Reconsideration does not ipso facto entitle the association to a reconsideration of the dismissal order. There must be special circumstances or compelling reasons which made the strict application of said Circular clearly unjustified or inequitable. As in the present case, such special circumstances or compelling reasons are absent.

4. NATIONAL TELECOMMUNICATIONS COMMISSION, vs. HONORABLE COURT OF APPEALS and PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, G.R. No. 127937 July 28, 1999 FACTS: Sometime in 1988, the National Telecommunications Commission (NTC) served on the Philippine Long Distance Telephone Company (PLDT) assessment notices and demands for payment for supervision and regulation fees pursuant to Sec. 40 par. E of Public Service Act. In its two letter-protests, the PLDT challenged the aforesaid assessments ratiocinating that it should only have been on the basis of the par values of private respondent's outstanding capital stock. NTC rendered a Decision denying the protest of PLDT. PLDT interposed a Motion for Reconsideration, 9 which was denied by NTC. PLDT appealed the aforesaid Decision to the Court of Appeals, which modified the disposition of NTC. NTC moved for partial reconsideration of the abovementioned Decision, with respect to the basis of the assessment under Section 40 (e), i.e., par value of the subscribed capital stock. However, said motion was denied by the Court of Appeals. ISSUE: Whether or not the assessment of the supervision and regulation fees should be based on the par value of the subscribed capital stock. HELD: It is clear in the ruling in the case of Philippine Long Distance Telephone Company vs. Public Service Commission, 66 SCRA 341, that the basis for computation of the fee to be charged by NTC on PLDT, is " the capital stock subscribed or paid and not, alternatively, the property and equipment." The law in point is clear and categorical. There is no room for construction. It simply calls for application. To repeat, the fee in question is based on the capital stock subscribed or paid, nothing less nothing more. The term "capital" and other terms used to describe the capital structure of a corporation are of universal acceptance, and their usages have long been established in jurisprudence. Briefly, capital refers to the value of the property or assets of a corporation. The capital subscribed is the total amount of the capital that persons (subscribers or shareholders) have agreed to take and pay for, which need not necessarily be, and can be more than, the par value of the shares. In fine, it is the amount that the corporation receives, inclusive of the premiums if any, in consideration of the original issuance of the shares. In the case of stock dividends, it is the amount that the corporation transfers from its surplus profit account to its capital account. It is the same amount that can loosely be termed as the "trust fund" of the corporation. The "Trust Fund" doctrine considers this subscribed capital as a trust fund for the payment of the debts of the corporation, to which the creditors may look for satisfaction. Until the liquidation of the corporation, no part of the subscribed capital may be returned or released to the stockholder (except in the redemption of redeemable shares) without violating this principle. Thus, dividends must never impair the subscribed capital; subscription commitments cannot be condoned or remitted; nor can the corporation buy its own shares using the subscribed capital as the consideration therefor. 12

It should be reiterated that the proper basis for the computation of subject fee under Section 40(e) of the Public Service Act, as amended by Republic Act No. 3792, is "the capital stock subscribed or paid and not, alternatively, the property and equipment.

5. MID-PASIG LAND DEVELOPMENT CORPORATION, vs. MARIO TABLANTE,, et. al., G.R. No. 162924, February 4, 2010. FACTS: Petitioner is the registered owner of a piece of land situated in Pasig City. On December 6, 1999, petitioner, represented by its Chairman and President, Ronaldo Salonga, and ECRM Enterprises, represented by its proprietor, Mario P. Tablante, executed an agreement whereby the former would lease to the latter an area, approximately one (1) hectare, of the aforesaid land, for a period of three (3) months. On March 6, 2000, the date of the expiration of the Lease Agreement, Tablante assigned all his rights and interests under the said agreement to respondents Laurie M. Litam and/or Rockland Construction Company, Inc. (Rockland) under a Deed of Assignment of the same date. Petitioner eventually learned that respondent Tablante had executed a Contract of Lease with respondent MC Home Depot, Inc. over the same parcel of land. Thereafter, respondent MC Home Depot, Inc. constructed improvements on the land and subdivided the area into fifty-nine (59) commercial stalls, which it leased to various entities. Upon the expiration of the lease on March 6, 2000, petitioner demanded that respondents vacate the land. A final demand was made in a letter dated December 20, 2000. In order to forestall ejectment from the premises, respondent Rockland filed a case for Specific Performance with the Regional Trial Court (RTC) compelling petitioner to execute a new lease contract for another three (3) years, commencing in July 2000. Consequently, on August 22, 2001, petitioner filed a case for unlawful detainer against herein respondents. Meantime, MTC rendered judgment in the unlawful detainer (ejectment) case dismissing the complaint. On appeal, the RTC affirmed in toto the lower courts decision. A petition for certiorari was consequently filed with the CA. The CA resolved to dismiss the petition on the ground that the verification and certification against nonforum shopping was signed by a certain Antonio A. Merelos as General Manager of the petitioner-corporation without attaching therewith a Corporate Secretarys certificate or board resolution that he is authorized to sign for and on behalf of the petitioner. The motion for reconsideration was denied; hence, the instant petition. ISSUE: Whether or not the verification and certification against non-forum shopping signed by the General Manager of the corporation is sufficient compliance under the law. HELD: Under Sec. 23, in relation to Sec. 25 of the Corporation Code, clearly enunciates that all corporate powers are exercised, all business conducted, and all properties controlled by the board of directors. A corporation has a separate and distinct personality from its directors and officers and can only exercise its corporate powers through the board of directors. Thus, it is clear that an individual corporate officer cannot solely exercise any corporate power pertaining to the corporation without authority from the board of directors.

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In sum, the following officials or employees of the company can sign the verification and certification without need of a board resolution: (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. The rationale applied in the foregoing cases is to justify the authority of corporate officers or representatives of the corporation to sign the verification or certificate against forum shopping, being "in a position to verify the truthfulness and correctness of the allegations in the petition." From the foregoing, it is thus clear that the failure to attach the Secretarys Certificate, attesting to General Manager Antonio Mereloss authority to sign the Verification and Certification of Non-Forum Shopping, should not be considered fatal to the filing of the petition. Nonetheless, the requisite board resolution was subsequently submitted to the CA, together with the pertinent documents. Considering that petitioner substantially complied with the rules, the dismissal of the petition was, therefore, unwarranted.