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Western Institue of Technology vs Salas the corporation, more particularly as Chairman, Vice-Chairman, Treasurer and

Secretary of Western Institute of Technology. Clearly, therefore, the prohibition with


Facts: Ricardo T. Salas, Salvador T. Salas, Soledad Salas-Tubilleja, Antonio S. Salas, respect to granting compensation to corporate directors/trustees as such under
and Richard S. Salas, belonging to the same family, are the majority and controlling Section 30 is not violated in this particular case.
members of the Board of Trustees of Western Institute of Technology, Inc. a stock
corporation engaged in the operation, among others, of an educational institution.
According to Homero L. Villasis, Dimas Enriquez, Peston F. Villasis, and Reginald F.
Villasis, the minority stockholders of WIT, sometime on 1 June 1986 in the principal
office of WIT at La Paz, Iloilo City, a Special Board Meeting was held.

Then, the board of directors amended their by laws giving the members of
board of directors a compensation. The ten per centum of the net profits shall be
distributed equally among the ten members of the Board of Trustees. Few years
later, the private respondents were charged of falsification of public documents and
estafa. The charge for falsification of public document was anchored on the private
respondents’ submission of WIT’s income statement for the fiscal year 1985-1986
with the Securities and Exchange Commission (SEC) reflecting therein the
disbursement of corporate funds making it appear that the same was passed by the
board on March 30, 1986, when in truth, the same was actually passed on June 1,
1986, a date not covered by the corporation’s fiscal year 1985-1986.

After a full-blown hearing TC handed down a verdict of acquittal on both


counts without imposing any civil liability against the accused therein.

Issue: WON the compensation of the board of directors as stated in their by laws
violates the corporation code?

Held: NO. There is no argument that directors or trustees, as the case may be,
are not entitled to salary or other compensation when they perform nothing more
than the usual and ordinary duties of their office. This rule is founded upon a
presumption that directors/trustees render service gratuitously, and that the return
upon their shares adequately furnishes the motives for service, without
compensation.

Under the foregoing section, there are only two (2) ways by which
members of the board can be granted compensation apart from reasonable per
diems: (1) when there is a provision in the by-laws fixing their compensation; and (2)
when the stockholders representing a majority of the outstanding capital stock at a
regular or special stockholders’ meeting agree to give it to them. In the case at
bench, Resolution No. 48, s. 1986 granted monthly compensation to private
respondents not in their capacity as members of the board, but rather as officers of
Renato Real vs Sangu Phils. Inc. OPINION: The case at bar is a termination dispute not an intra-corporate dispute.
Not all conflicts between the stockholders and the corporations are classified as
FACTS: Real was the manager Sangu Phils. Inc., which is engaged in providing intra-corporate dispute. There are factors to consider in determining whether the
manpower for general services. Petitioner was dismissed from employment due to dispute involves corporate matters as to consider them, intra-corporate
alleged gross act of misconduct and for his participation in staging strike and controversies. The fact that Real is a stockholder does not automatically classifies
barricading the premises of the respondent company. 1) his continuous absences at the case as intra-corporate dispute, therefore Labor arbiter correctly assumed
his post at Ogino Philippines, Inc; (2) respondents’ loss of trust and confidence on jurisdiction over the case.
petitioner; and, (3) to cut down operational expenses to reduce further losses being
experienced by the corporation. The Labor Arbiter decided in favor of Real and
ordered for his reinstatement with full backwages. On appeal, the NLRC dismissed
the case holding that Real is a stockholder and corporate officer of the respondent
company and therefore it is a intra-corporate dispute over which the Labor Arbiter
has no jurisdiction.

ISSUE: Does the complaint constitutes an intra-corporate dispute and thus beyond
the jurisdiction of the Labor Arbiter?

RULING: ‘Corporate officers’ in the context of Presidential Decree No. 902-A are
those officers of the corporation who are given that character by the Corporation
Code or by the corporation’s by-laws. There are three specific officers whom a
corporation must have under Section 25 of the Corporation Code. These are the
president, secretary and the treasurer. The number of officers is not limited to these
three. A corporation may have such other officers as may be provided for by its by-
laws like, but not limited to, the vice-president, cashier, auditor or general
manager. The number of corporate officers is thus limited by law and by the
corporation’s by-laws.

It has been consistently held that “[a]n ‘office’ is created by the charter of the
corporation and the officer is elected (or appointed) by the directors or
stockholders.” Clearly here, respondents failed to prove that petitioner was
appointed by the board of directors. Thus, we cannot subscribe to their claim that
petitioner is a corporate officer. Having said this, we find that there is no intra-
corporate relationship between the parties insofar as petitioner’s complaint for
illegal dismissal is concerned and that same does not satisfy the relationship test

This case is not intra-corporate dispute but rather is a termination dispute and,
consequently falls under jurisdiction of the Labor Arbiter pursuant to Section 217 of
the Labor Code. The better policy to be followed in determining jurisdiction over a
case should be to consider concurrent factors such as status or relationship of the
parties or the nature of the question that is subject of their controversy. In the
absence of these factors RTC will not have jurisdiction
Matling Industrial and Commercial Corporation et al. v. Ricardo R. Coros by-laws" found in Section 25 of the Corporation Code should be clearly and expressly
stated in the By-Laws.
FACTS: Ricardo Coros, the Vice President for Finance and Administration of Matling
Industrial was dismissed. On August 10, 2000, he filed a complaint for illegal We agree with respondent. Conformably with Section 25, a position must
suspension and illegal dismissal against Matling in the NLRC. Matling moved to be expressly mentioned in the By-Laws in order to be considered as a corporate
dismiss the complaint on the ground of lack of jurisdiction. They allege that since office. Thus, the creation of an office pursuant to or under a By-Law enabling
Coros is a member of Matling’s Board of Directors and a corporate office, the issue provision is not enough to make a position a corporate office.
is an intra-corporate controversy. As such, jurisdiction lies with the Securities and
Exchange Commission (SEC). 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
Coros, in opposing the motion filed by Matling, alleged that his status as a no office and generally is employed not by the action of the directors or stockholders
member of the Board was doubtful since he was not formally elected and he did not but by the managing officer of the corporation who also determines the
own a single share of stock. Even assuming that he had been a Director of Matling, compensation to be paid to such employee. In this case, respondent was appointed
he had been removed as the Vice President for Finance and Administration, not as a vice president for nationwide expansion by Malonzo, petitioner’s general manager,
Director, a fact that the notice of his termination dated April 10, 2000 showed. not by the board of directors of petitioner. It was also Malonzo who determined the
compensation package of respondent. Thus, respondent was an employee, not a
Labor Arbiter (LA) ruled in favor of Matling. On appeal, the NLRC reversed "corporate officer."
the decision of the LA and ruled that the case is cognizable by the LA. Matling
appealed to the CA through a petition for certiorari which the CA dismissed as well. 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
ISSUE: Whether or not Coros was a corporate officer of Matling Corporation Code requiring the Board of Directors itself to elect the corporate
RULING: Petition DENIED. 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
As a rule, the illegal dismissal of an officer or other employee of a private to subordinate officers or agents.22 The office of Vice President for Finance and
employer is properly cognizable by the LA Where the complaint for illegal dismissal Administration created by Matling’s President pursuant to By Law No. V was an
concerns a corporate officer, however, the controversy falls under the jurisdiction of ordinary, not a corporate, office.
the Securities and Exchange Commission (SEC), because the controversy arises out
of intra-corporate or partnership relations. 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 Matling’s
The petitioners argue that the power to create corporate offices and to President to create non-corporate offices to be occupied by ordinary employees of
appoint the individuals to assume the offices was delegated by Matling’s Board of Matling. Such powers were incidental to the President’s duties as the executive head
Directors to its President through By-Law No. V, as amended; and that any office the of Matling to assist him in the daily operations of the business.
President created, like the position of the respondent, was as valid and effective a
creation as that made by the Board of Directors.

The respondent counters that Matling’s By-Laws did not list his position as
Vice President for Finance and Administration as one of the corporate offices; that
Matling’s By-Law No. III listed only four corporate officers, namely: President,
Executive Vice President, Secretary, and Treasurer; 18 that the corporate offices
contemplated in the phrase "and such other officers as may be provided for in the