Documente Academic
Documente Profesional
Documente Cultură
Concepcion Lacsa
Heirs of Maria
While a corporation may exist for any lawful purpose, the law
will regard it as an association of persons or, in case of two
corporations, merge them into one, when its corporate legal
entity is used as a cloak for fraud or illegality. This is the
doctrine of piercing the veil of corporate fiction. To disregard
the separate juridical personality of a corporation, the
wrongdoing must be established clearly and convincingly. It
cannot be presumed. In the case at bar, respondents utterly
failed to prove by competent evidence that Park Hotel was a
mere instrumentality, agency, conduit or adjunct of Burgos, or
that its separate corporate veil had been used to cover any
fraud or illegality committed by Burgos against the
respondents. Accordingly, Park Hotel and Burgos cannot be
considered as one and the same entity, and Park Hotel cannot
be held solidary liable with Burgos.
Nonetheless, although the corporate veil between Park Hotel
and Burgos cannot be pierced, it does not necessarily mean
that Percy and Harbutt are exempt from liability towards
respondents. Verily, a corporation, being a juridical entity, may
act only through its directors, officers and employees.
Obligations incurred by them, while acting as corporate agents,
are not their personal liability but the direct accountability of the
corporation they represent. In the present case, the lower
tribunals unanimously found that Percy and Harbutt, in their
capacity as corporate officers of Burgos, acted maliciously in
terminating the services of respondents without any valid
ground and in order to suppress their right to self-organization.
owed
him
US$23,000.00
in
unpaid
salaries.
capacity or the name of the third party for whom he might have
acted as agent, the agent is personally liable to take holder of
the instrument and cannot be permitted to prove that he was
merely acting as agent of another and parol or extrinsic
evidence is not admissible to avoid the agent's personal
liability.
(2)
Gamboa v. Teves
FACTS: PLDT was granted a franchise and the right to engage
in telecommunications business upon the enactment of Act No.
3436. General Telephone and Electronics Corporation (GTE), a
major PLDT stockholder, sold 26% of the outstanding common
shares of PLDT to PTIC. Subsequently, Prime Holdings, Inc.
(PHI) which was incorporated by several persons, including
Roland Gapud and Jose Campos, Jr., became the owner of
111,415 shares of stock of PTIC by virtue of three Deeds of
Assignment executed by PTIC stockholders Ramon Cojuangco
and Luis Tirso Rivilla. In 1986, the 111,415 shares of stock of
PTIC held by PHI were sequestered by the Presidential
Commission on Good Government (PCGG). The 111,415 PTIC
shares, which represent about 46.125 percent of the
outstanding capital stock of PTIC, were later declared by this
Court to be owned by the Republic of the Philippines. In 1999,
First Pacific, a Bermuda-registered, Hong Kong-based
investment firm, acquired the remaining 54% of the
outstanding capital stock of PTIC. On 20 November 2006, the
InterAgency Privatization Council (IPC) of the Philippine
Government announced that it would sell the 111,415 PTIC
shares. First Pacific, through its subsidiary, MPAH, entered into
a Conditional Sale and Purchase Agreement of the 111,415
PTIC shares, or 46.125 percent of the outstanding capital stock
of PTIC. Since PTIC is a stockholder of PLDT, the sale by the
Philippine Government of 46.125 percent of PTIC shares is
actually an indirect sale of 12 million shares or about 6.3
percent of the outstanding common shares of PLDT. With the
sale, First Pacifics common shareholdings in PLDT increased
from 30.7 percent to 37 percent, thereby increasing the
common shareholdings of foreigners in PLDT to about 81.47
percent. This violates Section 11, Article XII of the 1987
Philippine Constitution which limits foreign ownership of the
capital of a public utility to not more than 40 percent. Wilson P.
Gamboa, a stockholder of Philippine Long Distance Telephone
Company (PLDT), then filed an action for the nullification of the
sale averring that it violated the constitutional limit on foreign
ownership of a public utility.
ISSUE: Whether the term capital as used in the Philippine
Constitution refers only to common shares
RULING: Petition PARTLY GRANTED. Considering that
common shares have voting rights which translate to control,
as opposed to preferred shares which usually have no voting
rights, the term capital in Section 11, Article XII of the
Constitution refers only to common shares. However, if the
preferred shares also have the right to vote in the election of
Gokongwei vs SEC
FACTS: John Gokongwei, Jr. is the president and substantial
stockholder of Universal Robina Corporation and CFC
Corporation which is a competitor of San Miguel Corporation
(SMC). Gokongwei acquired stocks from San Miguel
Corporation. Later on, the Board of Directors amended the bylaws of the corporation, basing their authority to do so on a
resolution of the stockholders. Gokongwei filed with the
Securities and Exchange Commission (SEC) a petition for
declaration of nullity of amended by-laws, cancellation of
certificate of filing of amended by- laws, injunction and
damages against the majority of the members of the Board of
Directors and San Miguel Corporation. In connection with the
case, Gokongwei filed with the SEC an "Urgent Motion for
Production and Inspection of Documents" alleging that the
Secretary of SMC refused to allow him to inspect its records
despite request made by him for production of certain
documents which included the records of San Miguel
International Inc., a fully owned subsidiary of San Miguel
Corporation.
ISSUES:
2.
YES. Since the SEC will grant a license only when the
foreign corporation has complied with all the
requirements of law, it follows that when it decides to
issue such license, it is satisfied that the applicant's
by-laws, among the other documents, meet the legal
requirements. This, in effect, is an approval of the
foreign corporations by-laws. It may not have been
made in express terms, still it is clearly an approval.
Therefore, petitioner bank's by-laws, though
originating from a foreign jurisdiction, are valid and
effective in the Philippines.
Matling
Industrial
and
Commercial
Corporation, et al. v. Ricardo R. Coros
FACTS: After his dismissal by Matling as its Vice President for
Finance and Administration, Ricardo Coros filed a complaint for
illegal suspension and illegal dismissal against Matling and
some of its corporate officers in the NLRC. The petitioners
moved to dismiss the complaint, raising the ground, among
others, that the complaint pertained to the jurisdiction of the
Securities and Exchange Commission (SEC) due to the
controversy being intra-corporate inasmuch as the respondent
was a member of Matlings Board of Directors aside from being
its Vice-President for Finance and
Administration prior to his termination. The respondent
opposed the petitioners motion to dismiss, insisting that his
status as a member of Matlings Board of Directors was
doubtful as he did not own a single share of stock in Matling.
The LA granted the petitioners motion to dismiss. The NLRC
and the CA upheld the Labor Arbiters Decision.
held. In fact it was not given such seat in the beginning. It was
only in 1975 that a proposed amendment to the by-laws sought
to give it one. Since the provision in question is contrary to law,
the fact that for fifteen years it has not been questioned or
challenged but, on the contrary, appears to have been
implemented by the members of the association cannot
forestall a later challenge to its validity. Neither can it attain
validity through acquiescence because, if it is contrary to law, it
is beyond the power of the members of the association to
waive its invalidity. For that matter the members of the
association may have formally adopted the provision in
question, but their action would be of no avail because no
provision of the by-laws can be adopted if it is contrary to law.
corporation, under the Corporation law, may prescribe in its bylaws the qualifications, duties and compensation of directors,
officers, and employees. Any person who buys stock in a
corporation does so with the knowledge that its affairs are
dominated by a majority of the stockholders and he impliedly
contracts that the will of the majority shall govern in all matters
within the limits of the acts of incorporation and lawfully
enacted by-laws and not forbidden by law. Any corporation
may amend its by-laws by the owners of the majority of the
subscribed stock. It cannot thus be said that petitioners has the
vested right, as a stock holder, to be elected director, in the
face of the fact that the law at the time such stockholder's right
was acquired contained the prescription that the corporate
charter and the by-laws shall be subject to amendment,
alteration and modification. A Director stands in a fiduciary
relation to the corporation and its shareholders, which is
characterized as a trust relationship. An amendment to the
corporate by-laws which renders a stockholder ineligible to be
director, if he be also director in a corporation whose business
is in competition with that of the other corporation, has been
sustained as valid. This is based upon the principle that where
the director is employed in the service of a rival company, he
cannot serve both, but must betray one or the other.
The amendment in this case serves to advance the benefit of
the corporation and is good. Corporate officers are also not
permitted to use their position of trust and confidence to further
their private needs, and the act done in furtherance of private
needs is deemed to be for the benefit of the corporation. This
is called the doctrine of corporate opportunity.
FACTS:
During the Annual Stockholders Meeting of petitioner Valle
Verde Country Club, Inc. (VVCC), the following were elected
as members of the VVCC Board of Directors: Ernesto
Villaluna, Jaime C. Dinglasan (Dinglasan), Eduardo Makalintal
(Makalintal), Francisco Ortigas III, Victor Salta, Amado M.
Santiago, Jr., Fortunato Dee, Augusto Sunico, and Ray
Gamboa. In the years 1997, 1998, 1999, 2000, and 2001,
however, the requisite quorum for the holding of the
stockholders meeting could not be obtained. Consequently,
the above-named directors continued to serve in the VVCC
Board in a hold-over capacity.
Dinglasan resigned from his position as member of the VVCC
Board and the remaining directors, still constituting a quorum
of VVCCs nine-member board, elected Eric Roxas (Roxas) to
fill in the vacancy created by the resignation of
Dinglasan. Makalintal also resigned as member of the VVCC
Board. He was replaced by Jose Ramirez (Ramirez), who was
elected by the remaining members of the VVCC Board.
Respondent Africa (Africa), a member of VVCC, questioned
the election of Roxas and Ramirez as members of the VVCC
Board with the SEC and the RTC, respectively. Africa alleged
that the election of Roxas was contrary to Section 29, in
relation to Section 23, of the Corporation Code of
the Philippines (Corporation
Code).
Africa additionally
contends that for the members to exercise the authority to fill in
vacancies in the board of directors, Section 29 requires,
among others, that there should be an unexpired term during
which the successor-member shall serve. Since Makalintals
term had already expired with the lapse of the one-year term
provided in Section 23, there is no more unexpired term
during which Ramirez could serve.
The RTC ruled in favor of Africa and declared the election of
Ramirez, as Makalintals replacement, to the VVCC Board as
null and void. The SEC issued a similar ruling nullifying the
election of Roxas as member of the VVCC Board, vice holdover director Dinglasan. While VVCC manifested its intent to
appeal from the SECs ruling, no petition was actually filed with
the Court of Appeals; thus, the appellate court considered the
case closed and terminated and the SECs ruling final and
executory.
ISSUE: Whether the remaining directors of the corporations
Board, still constituting a quorum, can elect another director to
fill in a vacancy caused by the resignation of a hold-over
director
HELD: The holdover period is not part of the term of office
of a member of the board of directors
The word term has acquired a definite meaning in
jurisprudence. In several cases, we have defined term as the
time during which the officer may claim to hold the office as of
right, and fixes the interval after which the several incumbents
shall succeed one another. The term of office is not affected by
the holdover. The term is fixed by statute and it does not
change simply because the office may have become vacant,
nor because the incumbent holds over in office beyond the end
of the term due to the fact that a successor has not been
elected and has failed to qualify.
Term
is
distinguished
from
tenure
in
that
an
officers tenure represents the term during which the
incumbent actually holds office. The tenure may be shorter (or,
FACTS:
Torres was initially hired by RBSJI as Personnel and Marketing
Manager and after satisfactory performance became a regular
employee and rose to ranks until he was offered the position of
VP in a newly created department to which he accepted and
he was replaced by Jobel Chua, a relative of the owner of the
bank. He was then transferred to another branch of the bank
as manager. Several days after his transfer an employee by
the name of Jacinto Figueroa requested the petitioner to sign a
standard
employment
clearance
pertaining
to
his
accountabilities with the bank. However, the petitioner declined
(SOP sa bank na dapat may audit muna bago bigyan ng
clearance after magresign) which caused Figueroa to shout
foul words and throw a fit. In the end, the petitioner issued a
clearance in favor of Figueroa but only up to the extent of paid
cash advances and salary loan.
Seven months later, the petitioner was required by respondent
Jesus Chua to explain why no administrative action should be
imposed on him for his unauthorized issuance of a clearance
to Figueroa whose accountabilities were yet to be audited. The
memorandum stressed that the clearance petitioner issued
effectively barred RBSJI from running after Jacinto. After
submitting his explanation, the services of the petitioner were
terminated which prompted him to file an action for illegal
dismissal against the bank and argued that the series of
transfers of position was employed by the bank to oust him.
The labor arbiter ruled in favor of Torres which was reversed by
the NLRC. Upon motion, the NLRC reversed itself and ruled in
favor of Torres. The bank raised the matter with the CA where
the decision of the NLRC was reversed stating that the
respondent validly dismissed the petitioner. Hence, the present
petition.