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onAugust 10, 2000 a complaint for illegal suspension and The respondent appealed to the NLRC,[7] urging that:
dismissal, concluding that the respondents complaint for the petitioners motion for reconsideration.[11]
Officers
Effective on August 8, 2000, upon the passage of
The President shall be the
Republic Act No. 8799, [15]
otherwise known executive head of the corporation; shall
preside over the meetings of the
as TheSecurities Regulation Code, the SECs jurisdiction stockholders and directors; shall
countersign all certificates, contracts and
over all intra-corporate disputes was transferred to the other instruments of the corporation as
authorized by the Board of Directors;
RTC, pursuant to Section 5.2 of RA No. 8799, to wit: shall have full power to hire and
discharge any or all employees of the
5.2. The Commissions jurisdiction corporation; shall have full power to
over all cases enumerated under Section create new offices and to appoint the
5 of Presidential Decree No. 902-A is officers thereto as he may deem
hereby transferred to the Courts of proper and necessary in the
general jurisdiction or the operations of the corporation and as
appropriate Regional Trial the progress of the business and
Court: Provided, that the Supreme Court welfare of the corporation may
in the exercise of its authority may demand; shall make reports to the
designate the Regional Trial Court directors and stockholders and perform
branches that shall exercise jurisdiction all such other duties and functions as are
over these cases. The Commission incident to his office or are properly
shall retain jurisdiction over pending required of him by the Board of Directors.
cases involving intra-corporate In case of the absence or disability of the
disputes submitted for final President, the Executive Vice President
resolution which should be resolved shall have the power to exercise his
within one (1) year from the functions.
enactment of this Code. The
Commission shall retain jurisdiction over
pending suspension of
payments/rehabilitation cases filed as
of 30 June 2000 until finally disposed. The petitioners argue that the power to create
Considering that the respondents complaint for the offices was delegated by Matlings Board of Directors
illegal dismissal was commenced on August 10, 2000, it to its President through By-Law No. V, as amended; and
might come under the coverage of Section 5.2 of RA No. that any office the President created, like the position of
8799, supra, should it turn out that the respondent was a the respondent, was as valid and effective a creation as
corporate, not a regular, officer of Matling. that made by the Board of Directors, making the office a
Matlings By-Law No. III listed only four corporate officers, Conformably with Section 25, a position must be
namely: President, Executive Vice President, Secretary, expressly mentioned in the By-Laws in order to be
and Treasurer; [18] that the corporate offices contemplated considered as a corporate office. Thus, the creation of an
in the phrase and such other officers as may be provided office pursuant to or under a By-Law enabling provision is
for in the by-laws found in Section 25 of theCorporation not enough to make a position a corporate office. Guerrea
Code should be clearly and expressly stated in the By- v. Lezama,[19] the first ruling on the matter, held that the
Laws; that the fact that Matlings By-Law No. III dealt only officers of a corporation were those given that
with Directors & Officers while its By-Law No. V dealt character either by the Corporation Code or by the By-
with Officers proved that there was a differentiation Laws; the rest of the corporate officers could be
between the officers mentioned in the two provisions, with considered only as employees or subordinate officials.
those classified under By-Law No. V Thus, it was held in Easycall Communications Phils., Inc. v.
context of PD No. 902-A are exclusively those who are was an ordinary, not a corporate, office.
the corporations By-Laws. To emphasize, the power to create new offices and
A different interpretation can easily leave the way by By-Law No. V merely allowed Matlings President to
open for the Board of Directors to circumvent the create non-corporate offices to be occupied by ordinary
constitutionally guaranteed security of tenure of the employees of Matling. Such powers were incidental to the
employee by the expedient inclusion in the By-Laws of an Presidents duties as the executive head of Matling to
enabling clause on the creation of just any corporate assist him in the daily operations of the business.
officer position.
The petitioners reliance on Tabang, supra, is
It is relevant to state in this connection that the
misplaced. The statement in Tabang, to the effect that
SEC, the primary agency administering the Corporation
offices not expressly mentioned in the By-Laws but were
Code, adopted a similar interpretation of Section 25 of
created pursuant to a By-Law enabling provision were also
the Corporation Code in its Opinion dated November 25,
considered corporate offices, was plainly obiter
1993,[21] to wit:
dictum due to the position subject of the controversy
Thus, pursuant to the above being mentioned in the By-Laws. Thus, the Court held
provision (Section 25 of the Corporation
Code), whoever are the corporate therein that the position was a corporate office, and that
officers enumerated in the by-laws
are the exclusive Officers of the the determination of the rights and liabilities arising from
corporation and the Board has no
the ouster from the position was an intra-corporate
power to create other Offices
without amending first the corporate controversy within the SECs jurisdiction.
By-laws. However, the Board may
create appointive positions other
than the positions of corporate
Officers, but the persons occupying In Nacpil v. Intercontinental Broadcasting
such positions are not considered as
corporate officers within the Corporation,[23] which may be the more appropriate
meaning of Section 25 of the
ruling, the position subject of the controversy was not
Corporation Code and are not
empowered to exercise the functions expressly mentioned in the By-Laws, but was created
of the corporate Officers, except
those functions lawfully delegated to pursuant to a By-Law enabling provision authorizing the
them. Their functions and duties are
to be determined by the Board of Board of Directors to create other offices that the Board of
Directors/Trustees.
Directors might see fit to create. The Court held there that
True it is that the Court pronounced in Tabang as Movilla,[28] the Court reiterated these determinants
follows: thuswise:
In order that the SEC (now the
regular courts) can take cognizance of a
Also, an intra-corporate controversy case, the controversy must pertain to any
is one which arises between a of the following relationships:
stockholder and the corporation. There is
no distinction, qualification or any a) between the corporation,
exemption whatsoever. The provision is partnership or association
broad and covers all kinds of and the public;
controversies between stockholders and
corporations.[26] b) between the corporation,
partnership or association
and its stockholders,
partners, members or
However, the Tabang pronouncement is not officers;
controlling because it is too sweeping and does not accord
c) between the corporation,
with reason, justice, and fair play. In order to determine partnership or association
and the State as far as its
whether a dispute constitutes an intra-corporate franchise, permit or license
to operate is concerned; and
controversy or not, the Court considers two elements
d) among the stockholders,
partners or associates
themselves. 1966 Bookkeeper
1968 Senior Accountant
The fact that the parties involved in 1969 Chief Accountant
the controversy are all stockholders or 1972 Office Supervisor
that the parties involved are the 1973 Assistant Treasurer
stockholders and the corporation does 1978 Special Assistant for
not necessarily place the dispute within Finance
the ambit of the jurisdiction of SEC. The 1980 Assistant Comptroller
better policy to be followed in 1983 Finance and Administrative
determining jurisdiction over a case Manager
should be to consider concurrent factors 1985 Asst. Vice President for
such as the status or relationship of the Finance
parties or the nature of the question that and Administration
is the subject of their controversy. In the 1987 to April 17, 2000 Vice
absence of any one of these factors, the President for Finance
SEC will not have jurisdiction. and Administration
Furthermore, it does not necessarily
follow that every conflict between the
corporation and its stockholders would Even though he might have become a stockholder
involve such corporate matters as only
of Matling in 1992, his promotion to the position of Vice
the SEC can resolve in the exercise of its
adjudicatory or quasi-judicial powers. [29] President for Finance and Administration in 1987 was by
The criteria for distinguishing between corporate an employee of Matling. His subsequent acquisition of the
officers who may be ousted from office at will, on one status of Director/stockholder had no relation to his
hand, and ordinary corporate employees who may only be promotion. Besides, his status of Director/stockholder was
terminated for just cause, on the other hand, do not unaffected by his dismissal from employment as Vice
depend on the nature of the services performed, but on President for Finance and Administration.
case, he was supposedly at once an employee, a In Prudential Bank and Trust Company v. Reyes,
surrounding his appointment to office must be fully from the ranks but was dismissed, the Court held that her
considered to determine whether the dismissal constituted complaint for illegal dismissal was correctly brought to the
an intra-corporate controversy or a labor termination NLRC, because she was deemed a regular employee of the
dispute. We must also consider whether his status as bank. The Court observed thus: