MATLING INDUSTRIAL AND COMMERCIAL CORPORATION, RICHARD K.
SPENCER, CATHERINE SPENCER, AND ALEX MANCILLA vs.
RICARDO R. COROS
FACTS:
After his dismissal by Matling as its Vice President for Finance and
Administration, Ricardo Coros filed on a complaint for illegal suspension and
illegal dismissal against Matling and some of its corporate officers (petitioners)
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, 5 insisting that his
status as a member of Matlings Board of Directors was doubtful, considering
that he had not been formally elected as such; that he did not own a single
share of stock in Matling, considering that he had been made to sign in blank
an undated indorsement of the certificate of stock he had been given in 1992;
that Matling had taken back and retained the certificate of stock in its custody;
and that even assuming that he had been a Director of Matling, he had been
removed as the Vice President for Finance and Administration, not as a
Director, a fact that the notice of his termination dated April 10, 2000 showed.
LA granted the petitioners motion to dismiss,6 ruling that the respondent was
a corporate officer because he was occupying the position of Vice President for
Finance and Administration and at the same time was a Member of the Board
of Directors of Matling; and that, consequently, his removal was a corporate
act of Matling and the controversy resulting from such removal was under the
jurisdiction of the SEC, pursuant to Section 5, paragraph (c) of Presidential
Decree No. 902.
NLRC set aside the dismissal, concluding that the respondents complaint for
illegal dismissal was properly cognizable by the LA, not by the SEC, because he
was not a corporate officer by virtue of his position in Matling, albeit high
ranking and managerial, not being among the positions listed in Matlings
Constitution and By-Laws
CA dismissed the petition for certiorari, explaining:
For a position to be considered as a corporate office, or, for that matter, for
one to be considered as a corporate officer, the position must, if not listed in
the by-laws, have been created by the corporation's board of directors, and the
occupant thereof appointed or elected by the same board of directors or
stockholders. This is the implication of the ruling in Tabang v. National Labor
Relations Commission, which reads:
"The president, vice president, secretary and treasurer are commonly regarded
as the principal or executive officers of a corporation, 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.
It has been held 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' 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."
This ruling was reiterated in the subsequent cases of Ongkingco v. National
Labor Relations Commission and De Rossi v. National Labor Relations
Commission.
The position of vice-president for administration and finance, which Coros used
to hold in the corporation, was not created by the corporations board of
directors but only by its president or executive vice-president pursuant to the
by-laws of the corporation. Moreover, Coros appointment to said position was
not made through any act of the board of directors or stockholders of the
corporation. Consequently, the position to which Coros was appointed and
later on removed from, is not a corporate office despite its nomenclature, but
an ordinary office in the corporation.
Coros alleged illegal dismissal therefrom is, therefore, within the jurisdiction of
the labor arbiter.
WHEREFORE, the petition for certiorari is hereby DISMISSED.
SO ORDERED.
The CA denied the petitioners motion for reconsideration on April 2, 2003.13
Issue
whether the respondent was a corporate officer of Matling or not

Held:
We must first resolve whether or not the respondents position as Vice
President for Finance and Administration was a corporate office. If it was, his
dismissal by the Board of Directors rendered the matter an intra-corporate
dispute cognizable by the RTC pursuant to RA No. 8799.
The petitioners contend that the position of Vice President for Finance and
Administration was a corporate office, having been created by Matlings
President pursuant to By-Law No. V, as amended,16 to wit:
BY LAW NO. V
Officers
Section 25 of the Corporation Code provides:
Section 25.Corporate officers, quorum.--Immediately after their election, the
directors of a corporation must formally organize by the election of a president,
who shall be a director, a treasurer who may or may not be a director, a
secretary who shall be a resident and citizen of the Philippines, and such other
officers as may be provided for in the by-laws. Any two (2) or more positions
may be held concurrently by the same person, except that no one shall act as
president and secretary or as president and treasurer at the same time.
The directors or trustees and officers to be elected shall perform the duties
enjoined on them by law and the by-laws of the corporation. Unless the articles
of incorporation or the by-laws provide for a greater majority, a majority of the
number of directors or trustees as fixed in the articles of incorporation shall
constitute a quorum for the transaction of corporate business, and every
decision of at least a majority of the directors or trustees present at a meeting
at which there is a quorum shall be valid as a corporate act, except for the
election of officers which shall require the vote of a majority of all the
members of the board.
Directors or trustees cannot attend or vote by proxy at board meetings.
Conformably with Section 25, 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,19 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.
Accordingly, the corporate officers in the context of PD No. 902-A are
exclusively those who are given that character either by the Corporation Code
or by the corporations By-Laws.
It is relevant to state in this connection that the SEC, the primary agency
administering the Corporation Code, adopted a similar interpretation of Section
25 of the Corporation Code in its Opinion dated November 25, 1993,21 to wit:
Thus, pursuant to the above provision (Section 25 of the Corporation Code),
whoever are the corporate officers enumerated in the by-laws are the exclusive
Officers of the corporation and the Board has no power to create other Offices
without amending first the corporate By-laws. However, the Board may create
appointive positions other than the positions of corporate Officers, but the
persons occupying such positions are not considered as corporate officers
within the meaning of Section 25 of the Corporation Codeand are not
empowered to exercise the functions of the corporate Officers, except those
functions lawfully delegated to them. Their functions and duties are to be
determined by the Board of Directors/Trustees.
Moreover, 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. 22 The office of
Vice President for Finance and Administration created by Matlings President
pursuant to By Law No. V was an ordinary, NOT a corporate, office.
To emphasize, the power to create new offices and the power to appoint the
officers to occupy them vested by By-Law No. V merely allowed Matlings
President to create non-corporate offices to be occupied by ordinary
employees of Matling. Such powers were incidental to the Presidents duties as
the executive head of Matling to assist him in the daily operations of the
business.
Thus, the Court held therein that the position was a corporate office, and that
the determination of the rights and liabilities arising from the ouster from the
position was an intra-corporate controversy within the SECs jurisdiction.
Did Respondents Status as Director and Stockholder Automatically Convert
his Dismissal into an Intra-Corporate Dispute?
The better policy in determining which body has jurisdiction over a case would
be to consider not only the status or relationship of the parties but also the
nature of the question that is the subject of their controversy.
Not every conflict between a corporation and its stockholders involves
corporate matters that only the SEC can resolve in the exercise of its
adjudicatory or quasi-judicial powers.
The fact that the parties involved in the controversy are all stockholders or that
the parties involved are the stockholders and the corporation does not
necessarily place the dispute within the ambit of the jurisdiction of SEC. The
better policy to be followed in determining jurisdiction over a case should be to
consider concurrent factors such as the status or relationship of the parties or
the nature of the question that is the subject of their controversy. In the
absence of any one of these factors, the SEC will not have jurisdiction.
Furthermore, it does not necessarily follow that every conflict between the
corporation and its stockholders would involve such corporate matters as only
the SEC can resolve in the exercise of its adjudicatory or quasi-judicial powers.29
The criteria for distinguishing between corporate officers who may be ousted
from office at will, on one hand, and ordinary corporate employees who may
only be terminated for just cause, on the other hand, do not depend on the
nature of the services performed, but on the manner of creation of the office.
In the respondents case, he was supposedly at once an employee, a
stockholder, and a Director of Matling. The circumstances surrounding his
appointment to office must be fully considered to determine whether the
dismissal constituted an intra-corporate controversy or a labor termination
dispute. We must also consider whether his status as Director and stockholder
had any relation at all to his appointment and subsequent dismissal as Vice
President for Finance and Administration.
Obviously enough, the respondent was not appointed as Vice President for
Finance and Administration because of his being a stockholder or Director of
Matling. He had started working for Matling on September 8, 1966, and had
been employed continuously for 33 years until his termination on April 17,
2000, first as a bookkeeper, and his climb in 1987 to his last position as Vice
President for Finance and Administration had been gradual but steady
Even though he might have become a stockholder of Matling in 1992, his
promotion to the position of Vice President for Finance and Administration in
1987 was by virtue of the length of quality service he had rendered as an
employee of Matling. His subsequent acquisition of the status of
Director/stockholder had no relation to his promotion. Besides, his status of
Director/stockholder was unaffected by his dismissal from employment as Vice
President for Finance and Administration.
PAMPLONA PLANTATION COMPANY VS. RAMON ACOSTA ET. AL.
FACTS:
There were originally 66 complainants in the case before the Labor Arbiter for
underpayment, overtime pay, premium pay for rest day and holiday, service
incentive leave pay, damages, attorneys fees, and 13th month pay. The
complainants claimed that they were regular rank and file employees of the
Pamplona Plantation Co., Inc. (petitioner) with different hiring periods, work
designations, and salary rates. Petitioner, however, denied this, alleging that
some of the complainants are seasonal employees, some are contractors,
others were hired under the pakyaw system, while the rest were hired by the
Pamplona Plantation Leisure Corporation, which has a separate and distinct
entity from it.
Labor Arbiter (LA) held petitioner and its manager, Jose Luis Bondoc, liable for
underpayment as complainants were regular employees of petitioner. They
were also held guilty of illegal dismissal with regard to complainants
JoselitoTinghil and Pedro Emperado.
On appeal to the National Labor Relations Commission (NLRC), the LAs Decision
was reversed and another one was entered dismissing all the . It was the NLRCs
finding that the complaint should have been directed against the Pamplona
Plantation Leisure Corporation since complainants individual affidavits
contained the allegations that their tasks pertained to their work in the golf
course.
The Court of Appeals (CA), in turn, vacated and set aside the NLRCs dismissal in
its Decision dated November 26, 2001, and reinstated the LAs Decision with the
modification that the award of wage differentials was limited to the following
twenty-two (22) persons, namely: Rolando Baloron, Samuel Garcia, Darwin
Garnica, Simeon Panangganan, Pablo Pao, Felix Torres, Manuel Garcia,
PaquitoNapao, CelsoRufa, JoselitoTinghil, ElpidiaToroy, Ernesto Torres,
Laureano Lopez, Joseph Barba, HermenigildoCaolas, Salome Regala, Guillermo
Torres, Narcisa Torres, Nelson Torres, Loreto Ybanay, Luis Guan, and
Christopher Ybanay (respondents), while the finding of illegal dismissal with
regard to Pedro Emparado and the award of attorneys fees were deleted.
ISSUE: Whether or not CA is correct in ruling that 22 respondents were its
employees
*Petitioner insists that based on their affidavits, respondents admitted that
they were employees of the Pamplona Plantation Leisure Corporation, hence,
their complaint for illegal dismissal should have been directed against it.
HELD:
The Court disagrees. Petitioner is estopped from denying that respondents
worked for it. In the first place, it never raised this defense in the proceedings
before the Labor Arbiter. Notably, the defense it raised pertained to the nature
of respondents employment, i.e., whether they are seasonalemployees,
contractors, or worked under the pakyawsystem. Thus, in its Position Paper,
petitioner alleged that some of the respondents are coconut filers and copra
hookers or sakadors; some are seasonal employees who worked as scoopers or
lugiteros; some are contractors; and some worked under the pakyaw systemIn
support of these allegations, petitioner even presented the companys
payroll,which will allegedly prove its allegations.
By setting forth these defenses, petitioner, in effect, admitted that respondents
worked for it, albeit in different capacities. Such allegations are negative
pregnants denials pregnant with the admission of the substantial facts in the
pleading responded to which are not squarely denied,and amounts to an
acknowledgement that respondents were indeed employed by petitioner.
On this score, the Court adopts the findings in Pamplona Plantation Company,
Inc. v. Tinghil, which involves the same petitioner in this case and some of its
workers. In that case, petitioner contended that the case should have been
dismissed because of the respondents failure to implead the Pamplona
Plantation Leisure Corporation, Inc. as an indispensable party, since as
admitted in their respective affidavits, it was their true and real employer. The
Court, however, rejected petitioners contention and concluded that by piercing
the veil of corporate fiction, the two corporations the Pamplona Plantation
Corporation, Inc. and the Pamplona Plantation Leisure Corporation are one and
the same. Thus, the Court ruled:
An examination of the facts reveals that, for both the coconut plantation and
the golf course, there is only one management which the laborers deal with
regarding their work. A portion of the plantation (also called Hacienda
Pamplona) had actually been converted into a golf course and other
recreational facilities. The weekly payrolls issued by petitioner-company bore
the name Pamplona Plantation Co., Inc. It is also a fact that respondents all
received their pay from the same person, Petitioner Bondoc -- the managing
director of the company. Since the workers were working for a firm known as
Pamplona Plantation Co., Inc., the reason they sued their employer through
that name was natural and understandable.
True, the Petitioner Pamplona Plantation Co., Inc., and the Pamplona
Plantation Leisure Corporation appear to be separate corporate entities. But it
is settled that this fiction of law cannot be invoked to further an end subversive
of justice.
Consequently, petitioner cannot now deny that respondents are its employees.
petitioner also disputes the CAs finding that respondent JoselitoTinghil was
illegally dismissed.
According to the CA, petitioner did not at all controvert or dispute Tinghils
allegation that he was not told not to report for work anymore due to his
involvement in union activities.
The CAs finding finds sufficient basis from the records of this case. In his
Affidavit, Tinghil stated that som time in May 3, 1997, he, together with other
union officers and company employees, were called personally by the project
manager, LitoBundok,who expressed his disgust with their union activities.
They were then informed that they will not be allowed to report for work
anymore.Petitioner did not at all contest Tinghils allegations. Instead, it merely
countered that Tinghils narration in his affidavit are vague.
It is well-settled that the employer has the burden of proving that the dismissal
was for a valid and just cause. Failure to discharge this burden of proof
substantially means that the dismissal was not justified and therefore, illegal.
Given petitioners failure to discharge this burden, the Court sustains the finding
of illegal dismissal vis--vis respondent JoselitoTinghil.
Lastly, petitioner believes that its manager, Jose Luis Bondoc, should not have
been held solidarily liable with the company for the wage differentials awarded
to respondents. Petitioner argues that Bondoc is merely an employee of the
company and not a corporate director or officer who can be held personally
liable therefor.
The rule is that officers of a corporation are NOT personally liable for their
official acts unless it is shown that they have exceeded their authority.
However, the legal fiction that a corporation has a personality separate and
distinct from stockholders and members may be disregarded if it is used as a
means to perpetuate fraud or an illegal act or as a vehicle for the evasion of an
existing obligation, the circumvention of statutes, or to confuse legitimate
issues.
Moreover, a corporate officer is not personally liable for the money claims of
discharged corporate employees unless he acted with evident malice and bad
faith in terminating their employment.
Under Section 25 of the Corporation Code, three officers are specifically
provided for which a corporation must have: president, secretary, and
treasurer. The law, however, does not limit corporate officers to these three.
Section 25 gives corporations the widest latitude to provide for such other
offices, as they may deem necessary. The by-laws may and usually do provide
for such other officers, e.g., vice-president, cashier, auditor, and general
manager
In this case, there is NO basis from which it may be deduced that Bondoc, as
manager of petitioner, is also a corporate officer such that he may be held
liable for the money claims awarded in favor of respondents. Even assuming
that he is a corporate officer, still, there is no showing that he acted with
evident malice and bad faith. Bondoc may have signed and approved the
payrolls; nevertheless, it does not follow that he had a direct hand in
determining the amount of respondents corresponding salaries and other
benefits. Bondoc, therefore, should NOT have been held liable together with
petitioner.
METRO DRUG DISTRIBUTION, INC., MARSMAN and COMPANY, INC., JOVEN D.
REYES, ISIDRO M. TARACHAN, BENJAMIN C. JAVIER, FELIPE C. GUEVARA,
WILFREDO C. ROLDAN AND GODOFREDO L. LABAY VS. NOEL M. NARCISO,
FACTS:
An illegal dismissal complaint was filed by respondent Noel M. Narciso against
petitioners
Labor arbiter Donato G. Quinto, Jr. decided in favor of petitioners and
dismissed the complaint for lack of merit.
NLRC affirmed the findings of the labor arbiter but awarded separation pay to
respondent.
Petitioners filed a petition for certiorari before the Court of Appeals. They
questioned the NLRCs grant of separation pay to respondent in the face of the
finding that his dismissal was legal.
CA denied the petition
ISSUE: whether or not CA is correct in dismissing the case on the ground of
non-compliance on the certification against forum shopping
HELD:
We have ruled time and again that litigants should have the amplest
opportunity for a proper and just disposition of their cause free, as much as
possible, from the constraints of procedural technicalities. Our judicial system
encourages full adjudication of the merits of an appeal. On the other hand, we
also follow the rule that, save for the most persuasive of reasons, strict
compliance with procedural requirements must be observed to facilitate the
orderly administration of justice.
While litigation is not a game of technicalities and the rules of procedure
should not be enforced at the cost of substantial justice, it does not mean that
the Rules of Court may be ignored at will and at random. Procedural rules
should not be belittled or dismissed. Like all rules, their application is necessary
except only for the most persuasive of reasons.
It therefore follows that a party invoking a liberal application of the rules of
procedure should at least exert some effort to comply with them.
Here, petitioners failed to specify all the petitioners in the caption as required
by Section 1, Rule 7 of the Rules of Court. Despite the dismissal of their petition
because of this admitted inadvertence, they carelessly committed the same
mistake in their motion for reconsideration.

The same error occured with respect to their certificate against forum shopping
which failed to conform to the requirements of Section 1 (2), Rule 65 and
Section 3 (3), Rule 46. The appellate court correctly ruled that the certificate
was defective because it was signed by the Vice-President for Finance and
Human Resources without evidence of her authority to represent petitioner
corporation and the officers impleaded. Again, despite the dismissal of the
petition on this ground, petitioners repeated the omission in their motion for
reconsideration. They failed to attach the required proof. The appellate court
therefore found no reason to reconsider the dismissal of the petition.

In Zulueta v. Asia Brewery, Inc.,we held that the requirement for petitioner to
sign the certificate of non-forum shopping applied even to corporations,
considering that the mandatory directives of the Rules of Court made no
distinction between natural and juridical persons.
In case of a corporation, it has long been settled that the certificate must be
signed for and on its behalf by a specifically authorized officer or agentwho
has personal knowledge of the facts required to be disclosed.

We discussed the rationale behind the rule in National Steel Corporation v.

Court of Appeals:
Unlike natural persons, corporations may perform physical actions only
through properly delegated individuals; namely, its officers and/or agents.The
corporation, such as the petitioner, has no powers except those expressly
conferred on it by the Corporation Code and those that are implied or
incidental to its existence. In turn, a corporation exercises said powers through
its board of directors and/ or its duly authorized officers or agents. Physical
acts, like the signing of documents, can be performed only by natural persons
duly authorized for the purpose by corporate by-laws or by specific act of the
board of directors. Consequently, without the needed proof from the board of
directors, the certificate would be considered defective. Thus, in another case,
we held that even the regular officers of a corporation, like the chairman and
president, may not even know the details required in a certificate of non-forum
shopping; they must therefore be authorized by the board of directors just like
any other officer or agent.