1.

As to 1st Metro Holdings & Metrobank no intra-corporate

controversy exists
In Renato Real vs. Sangu Philippines Inc., G.R. No. 168757, 19
January 2011 the Court, citing Reyes v. Regional Trial Court of Makati,
Br. 142 held:
***FACTS: Real was a Manager of Respondent Sangu, he was dismissed
from employment, he claimed illegal dismissal (case before the LA) but
NLRC said that the case is one of intra corporate controversy because
Real was a corporate officer. Thus the SC ruled that the dismissal of Real
is because of his being a Manager and not a director and stockholder of
the corporation. Elements of Intra-corporate controversy is absent. The
court also ruled that intra corporate controversy arises if the relationship
found in Sec 5(b) of PD 902-A (Reorganization of SEC) [See below].
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in
the Courts approach in classifying what constitutes an intracorporate controversy. Initially, the main consideration in
determining whether a dispute constitutes an intra-corporate
controversy was limited to a consideration of the intra-corporate
relationship existing between or among the parties. The types of
relationships embraced under Section 5(b) x x x were as follows:
a)

between the corporation, partnership or

association and the public;
b)
between the corporation, partnership or
association and its stockholders, partners, members or
officers;
c)
between the corporation, partnership or
association and the State as far as its franchise, permit or
license to operate is concerned; and
d)
among the stockholders, partners or associates
themselves.
The existence of any of the above intra-corporate relations
was sufficient to confer jurisdiction to the SEC (now the RTC),
regardless of the subject matter of the dispute. This came to be
known as the relationship test.
However, in the 1984 case of DMRC Enterprises v. Esta del
Sol Mountain Reserve, Inc., the Court introduced the nature of the
controversy test. We declared in this case that it is not the mere
existence of an intra-corporate relationship that gives rise to an
intra-corporate controversy; to rely on the relationship test alone
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will divest the regular courts of their jurisdiction for the sole reason
that the dispute involves a corporation, its directors, officers, or
stockholders. We saw that there is no legal sense in disregarding or
minimizing the value of the nature of the transactions which gives
rise to the dispute.
Under the nature of the controversy test, the incidents of that
relationship must also be considered for the purpose of ascertaining
whether the controversy itself is intra-corporate. The controversy
must not only be rooted in the existence of an intra-corporate
relationship, but must as well pertain to the enforcement of the
parties correlative rights and obligations under the Corporation
Code and the internal and intra-corporate regulatory rules of the
corporation. If the relationship and its incidents are merely
incidental to the controversy or if there will still be conflict even
if the relationship does not exist, then no intra-corporate
controversy exists.
The Court then combined the two tests and declared that
jurisdiction should be determined by considering not only the status
or relationship of the parties, but also the nature of the question
under controversy. This two-tier test was adopted in the recent case
of Speed Distribution Inc. v. Court of Appeals:
To determine whether a case involves an intracorporate controversy, and is to be heard and decided
by the branches of the RTC specifically designated by
the Court to try and decide such cases, two elements
must concur: (a) the status or relationship of the
parties, and (2) the nature of the question that is the
subject of their controversy.
The first element requires that the
controversy must arise out of intra-corporate or
partnership relations between any or all of the
parties and the corporation, partnership, or
association of which they are not stockholders,
members or associates, between any or all of them
and the corporation, partnership or association of
which they are stockholders, members or
associates, respectively; and between such
corporation, partnership, or association and the
State insofar as it concerns the individual
franchises. The second element requires that the
dispute among the parties be intrinsically connected
with the regulation of the corporation. If the nature of
the controversy involves matters that are purely civil
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in character, necessarily, the case does not involve an

intra-corporate controversy. [Citations omitted.]
2. Separate Juridical Personality of 1st Metro Holdings and Metrobank
from FAMA
In PNB vs Ritratto Group, G.R. No. 142616, 31 July 2001
The general rule is that as a legal entity, a corporation has a
personality distinct and separate from its individual stockholders or
members, and is not affected by the personal rights, obligations and
transactions of the latter. The mere fact that a corporation owns all
of the stocks of another corporation, taken alone is not sufficient
to justify their being treated as one entity. If used to perform
legitimate functions, a subsidiary's separate existence may be
respected, and the liability of the parent corporation as well as the
subsidiary will be confined to those arising in their respective
business. The courts may in the exercise of judicial discretion step in
to prevent the abuses of separate entity privilege and pierce the veil
of corporate entity.
xxx
Similarly, in this jurisdiction, we have held that the doctrine of
piercing the corporate veil is an equitable doctrine developed to
address situations where the separate corporate personality of a
corporation is abused or used for wrongful purposes. The doctrine
applies when the corporate fiction is used to defeat public
convenience, justify wrong, protect fraud or defend crime, or when it
is made as a shield to confuse the legitimate issues, or where a
corporation is the mere alter ego or business conduit of a person, or
where the corporation is so organized and controlled and its affairs
are so conducted as to make it merely an instrumentality, agency,
conduit or adjunct of another corporation
3. Separate Personality of Corporation
In Pantranco Employees Association vs NLRC, G.R. No. 170689, 17
March 2009
Whether the separate personality of the corporation should be
pierced hinges on obtaining facts appropriately pleaded or proved.
However, any piercing of the corporate veil has to be done with
3

caution, albeit the Court will not hesitate to disregard the corporate
veil when it is misused or when necessary in the interest of justice.
After all, the concept of corporate entity was not meant to promote
unfair objectives
4. Corporate Officer
In Matling Industrial and Commercial Corporation vs Coro, G.R.
No. 157802, 13 October 2010:
Where the complaint for illegal dismissal concerns a corporate
officer, however, the controversy falls under the jurisdiction of the
Securities and Exchange Commission (SEC), because the
controversy arises out of intra-corporate or partnership relations
between and among stockholders, members, or associates, or
between any or all of them and the corporation, partnership, or
association of which they are stockholders, members, or associates,
respectively; and between such corporation, partnership, or
association and the State insofar as the controversy concerns their
individual franchise or right to exist as such entity; or because the
controversy involves the election or appointment of a director,
trustee, officer, or manager of such corporation, partnership, or
association. Such controversy, among others, is known as an intracorporate dispute.
xxx
Conformably with Section 25 of the Corporation Code, a position
must be expressly mentioned in the By-Laws in order to be
considered as a corporate office. Thus, the creation of an office
pursuant to or under a By-Law enabling provision is not enough to
make a position a corporate office. Guerrea v. Lezama, the first
ruling on the matter, held that the only officers of a corporation were
those given that character either by the Corporation Code or by the
By-Laws; the rest of the corporate officers could be considered only
as employees or subordinate officials.
5. Disqualification of BOD refer to by-laws on the grounds for
disqualification of BOD.
Sec 27 and 28 of the Corporation Code
Sec. 27. Disqualification of directors, trustees or officers.- No person
convicted by final judgment of an offense punishable by
4

imprisonment for a period exceeding six (6) years, or a violation of

this Code committed within five (5) years prior to the date of his
election or appointment, shall qualify as a director, trustee or officer
of any corporation.
Sec. 28. Removal of directors or trustees- Any director or trustee of a
corporation may be removed from office by a vote of the
stockholders holding or representing at least two-thirds (2/3) of the
outstanding capital stock, or if the corporation be a non-stock
corporation, by a vote of at least two-thirds (2/3) of the members
entitled to voted: Provided, That such removal shall take place either
at a regular meeting of the corporation or at a special meeting called
for the purpose, and in either case, after previous notice to
stockholders or members of the corporation of the intention to
propose such removal at the meeting. A special meeting of the
stockholders or members of a corporation for the purpose of removal
of directors or trustees, or any of them, must be called by the
secretary on order of the president or on the written demand of the
stockholders representing or holding at least a majority of the
outstanding capital stock, or, if it be a non-stock corporation, on the
written demand of a majority of the members entitled to vote. Should
the secretary fail or refuse to call the special meeting upon such
demand or fail or refuse to give the notice, or if there is no secretary,
the call for the meeting may be addressed directly to the stockholders
or members by any stockholder or member of the corporation signing
the demand. Notice of the time and place of such meeting, as well as
of the intention to propose such removal, must be given by
publication or by written notice prescribed in this Code. Removal
may be with or without cause: Provided, That removal without cause
may not be used to deprive minority stockholders or members of the
right of representation to which they may be entitled under Section
24 of this Code.
6. As to the Cancellation of Corporate Franchise
In Ong vs. Circle J Corporation, SEC Case No. 10-05-92
(For:Involuntary Dissolution), 03 June 2010
Jurisdiction over actions for revocation/cancellation of
corporate franchise indubitably belongs to this Commission, pursuant
to Section 6 (l) of Presidential Decree No. 902-A, as amended, which
reads:
Section 6. In order to effectively exercise
such jurisdiction, the Commission shall possess the
following powers: xxx xxx xxx
5

l)
To suspend, or revoke, after proper notice and
hearing, the franchise or certificate of registration of
corporations, partnerships or associations, upon any of the
grounds provided by law, including the following:
1. Fraud in procuring its certificate of registration;
2. Serious misrepresentation as to what the
corporation can do or is doing to the great
prejudice or damage to the general public;
3. Refusal to comply or defiance of any lawful order
of the Commission restraining commission of acts
which would amount to a grave violation of its
franchise;
4. Continuous inoperation for a period of at least five
(5) years;
5. Failure to file by-laws within the required period;
and
6. Failure to file required reports in appropriate
forms as determined by the Commission within
the prescribed perios; xxx.
(Emphasis ours).
In addition to the foregoing grounds, a corporations certificate
of registration may likewise be revoked for failure to formally
organize and commence the transaction of its business or the
construction of its works within two years from its incorporation,
pursuant to Section 22 of the Corporation Code, and for vioaltions of
any of the provisions of the said Code or its amendments not
specifically penalized therein, as provided in Section 144 thereof.
7. As to failure to return to work after notice.
In Tan Brothers Corporation of Basilan City vs. Escudero, G.R. No.
188711, 08 July 2013
As defined under established jurisprudence, abandonment is the
deliberate and unjustified refusal of an employee to resume his
employment. It constitutes neglect of duty and is a just cause for
termination of employment under paragraph (b) of Article 282 of the
Labor Code. To constitute abandonment, however, there must be a
clear and deliberate intent to discontinue one's employment without
any intention of returning. In this regard, two elements must concur:
6

(1) failure to report for work or absence without valid or justifiable

reason, and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative
factor and being manifested by some overt acts. Otherwise stated,
absence must be accompanied by overt acts unerringly pointing to
the fact that the employee simply does not want to work anymore. It
has been ruled that the employer has the burden of proof to show a
deliberate and unjustified refusal of the employee to resume his
employment without any intention of returning.