ROY D. PASOS vs. PNCC
Petitioner elevated
DOCTRINE:
An individual corporate officer cannot exercise any corporate power pertaining
to the corporation without authority from the board of directors pursuant to
Section 23, in relation to Section 25 of the Corporation Code which clearly
enunciates that all corporate powers are exercised, all business conducted, and
all properties controlled by the board of directors. However, the Supreme Court
has, in many cases, recognized the authority of some corporate officers to sign
the verification and certification against forum-shopping.
FACTS:
Petitioner Roy D. Pasos started working for respondent PNCC on April 26,
1996. He worked on several projects for respondent as an accounting clerk.
When he was assigned to the SM-Project, no date was specified as to when his
employment would end but it was stated therein that it would be "co-terminus
with the completion of the project." Said employment supposedly ended on
August 19, 1999. However, that said employment was extended as petitioner
was again appointed as an accounting clerk. It appeared that such extension
would eventually end on October 19, 2000. Despite the termination of his
employment on October 19, 2000, petitioner claimed that his superior
instructed him to report for work the following day, intimating to him that he
will again be employed for the succeeding SM projects. For purposes of
reemployment, he then underwent a medical examination which allegedly
revealed that he had pneumonitis. Petitioner was advised to take a 14-day sick
leave. After serving his sick leave, petitioner claimed that he was again
referred for medical examination where it was revealed that he contracted
Koch’s disease. He was then required to take a 60-day leave of absence.
Petitioner claimed that after he presented his medical clearance to the Project
Personnel Officer on even date, he was informed that his services were already
terminated on October 19, 2000 and he was already replaced due to expiration
of his contract. This prompted petitioner to file a complaint for illegal dismissal
against PNCC with a prayer for reinstatement and back wages. The Labor
Arbiter rendered a Decision in favor of petitioner. The Labor Arbiter ruled that
petitioner attained regular employment status with the repeated hiring and
rehiring of his services more so when the services he was made to render were
usual and necessary to PNCC’s business.
Both PNCC and petitioner appealed the Labor Arbiter’s decision. PNCC insisted
that petitioner was just a project employee and his termination was brought
about by the completion of the contract and therefore he was not illegally
dismissed. Petitioner, on the other hand, argued that his reinstatement should
have been ordered by the Labor Arbiter. He also argued that the person
who verified the appeal, Felix M. Erece, Jr., Personnel Services
Department Head of PNCC, has no authority to file the same for and in
behalf of PNCC.
The NLRC rendered its Decision granting PNCC’s appeal but dismissing that of
petitioner. As to the procedural issues raised by petitioner, the NLRC
ruled that Mr. Erece, Jr., as head of the Personnel Services
Department, is the proper person to represent PNCC.
the case to the CA via a petition for certiorari but the appellate court dismissed
the same for lack of merit. Hence this petition.
ISSUE: W/N the head of the personnel department verification and
certification on behalf of the corporation was valid sans any board resolution or
secretary’s certificate authorizing such officer to do the same
HELD: YES
RATIO:
It has been the constant holding of this Court in cases instituted by
corporations that an individual corporate officer cannot exercise any
corporate power pertaining to the corporation without authority from
the board of directors pursuant to Section 23, in relation to Section 25
of the Corporation Code which clearly enunciates that all corporate
powers are exercised, all business conducted, and all properties
controlled by the board of directors. However, we have in many cases
recognized the authority of some corporate officers to sign the
verification and certification against forum-shopping.
We have held that the following officials or employees of the company can sign
the verification and certification without need of a board resolution: (1) the
Chairperson of the Board of Directors, (2) the President of a
corporation, (3) the General Manager or Acting General Manager, (4)
Personnel Officer, and (5) an Employment Specialist in a labor case.
While the above cases do not provide a complete listing of authorized
signatories to the verification and certification required by the rules,
the determination of the sufficiency of the authority was done on a
case to case basis. The rationale applied to justify the authority of corporate
officers or representatives of the corporation to sign the verification or
certificate against forum shopping, being "in a position to verify the
truthfulness and correctness of the allegations in the petition." This Court
recognizes the authority of Mr. Erece, Jr. to sign the verification and
certification on behalf of PNCC sans a board resolution or secretary’s
certificate.
Even assuming that the verification in the appeal filed by PNCC is defective, it
is well settled that rules of procedure in labor cases maybe relaxed. As
provided in Article 221 of the Labor Code, as amended, "rules of evidence
prevailing in courts of law or equity shall not be controlling and it is the spirit
and intention of this Code that the Commission and its members and the Labor
Arbiters shall use every and all reasonable means to ascertain the facts in each
case speedily and objectively and without regard to technicalities of law or
procedure, all in the interest of due process." Moreover, the requirement of
verification is merely formal and not jurisdictional. Such requirement is
simply a condition affecting the form of pleading, the noncompliance of which
does not necessarily render the pleading fatally defective.
PHILIPPINE OVERSEAS TELECOMMUNUICATIONS CORPORATION
(POTC), ET AL. vs. VICTOR V. AFRICA, ET AL.
DOCTRINE:
An intra-corporate dispute involving a corporation under sequestration of the
Presidential Commission on Good Government (PCGG) falls under the
jurisdiction of the Regional Trial Court (RTC), not the Sandiganbayan.
FACTS:
POTC, PHILCOMSAT and PHC are all domestic corporations. Atty. Ilusorio’s
family owned shares of stock in POTC. He claimed that he had incurred the ire
of Imelda Marcos during the regime of President Marcos, leading to the Marcos
spouses’ grabbing from him the POTC shares of stock through threats and
intimidation and without any valuable consideration, and placing such shares
under the names of their alter egos, namely: Independent Realty Corporation
(IRC); Mid-Pasig Land Development (Mid-Pasig); and one share in the name of
Ferdinand Marcos, Jr.
After Marcos was toppled down, Pres. C. Aquino issued Executive Order No. 1
to create the PCGG. Subsequently, Campos, a self-confessed crony of
President Marcos, voluntarily surrendered to the PCGG the properties, assets,
and corporations he had held in trust for the deposed President. Among the
corporations surrendered were IRC and Mid-Pasig.
The Government, represented by the PCGG, filed in the Sandiganbayan a
complaint for reconveyance, reversion, accounting, restitution and damages.
The Republic, IRC and Mid-Pasig, and the PCGG then entered into a
compromise agreement with Atty. Ilusorio, which was subsequently approved
by Pres. Ramos.
PHILCOMSAT stockholders held an informal gathering at the Manila Golf Club
for the apparent purpose of introducing the new PCGG nominees to the
stockholders. As a consequence, other PHILCOMSAT stockholders instituted a
Complaint with application for the issuance of temporary restraining order
(TRO) and writ of preliminary injunction (WPI) in the Securities and Exchange
Commission (SEC) assailing the election of the Directors and Officers on
several grounds, such as the lack of sufficient notice of the meeting, the lack of
quorum, and the lack of qualifying shares of those who were elected.
The SEC issued a TRO, and, later on, a WPI enjoining the Nieto Group-PCGG
from acting as Directors and Officers of PHILCOMSAT and from representing
themselves as such. Following the enactment of Republic Act No. 8799
(Securities Regulation Code), SEC Case No. 09-98-6086 was transferred to the
RTC in Makati City, which re-docketed it and raffled it to Branch 138. RTC ruled
against herein petitioners. On appeal, CA held that the RTC acted within its
jurisdiction in resolving the intra-corporate dispute; that the conduct of pre-
trial was not required in corporate election cases; that the RTC had the
authority to decide.
On appeal before the SC, petitioners claim that the Sandiganbayan had original
and exclusive jurisdiction over sequestered corporations, sequestration-related
cases, and any and over all incidents arising from, or incidental or related to
such cases; that it was error on the part of the CA to conclude that the
Sandiganbayan was automatically ousted of jurisdiction over the sequestered
assets once the complaint alleged an intra-corporate dispute due to the
sequestered assets being in custodia legis of the Sandiganbayan; the RTC
could not render a valid judgment on the dispute because it had not been
designated as a Commercial Court.
ISSUE: W/N RTC (Branch 138) have jurisdiction over the intra-corporate
controversy
HELD: YES
RATIO:
It is settled that there is an intra-corporate controversy when the dispute
involves any of the following relationships, to wit:
(a) between the corporation, partnership or association and the
public;
(b) between the corporation, partnership or association and the State
in so far as its franchise, permit or license to operate is concerned;
(c) between the corporation, partnership or association and its
stockholders, partners, members or officers; and
(d) among the stockholders, partners or associates themselves.
Originally, Section 5 of Presidential Decree (P.D.) No. 902-A vested the original
and exclusive jurisdiction over cases involving the following in the SEC, to wit:
xxxx
(b) Controversies arising out of intra-corporate or partnership
relations, between and among 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 their individual
franchise or right as such entity;
(c) Controversies in the election or appointment of directors, trustees,
officers or managers of such corporations, partnership or associations;
xxxx
However, upon the enactment of Republic Act No. 8799 (The Securities
Regulation Code), the jurisdiction of the SEC over intra-corporate controversies
and the other cases enumerated in Section 5 of P.D. No. 902-A was transferred
to the Regional Trial Court pursuant to Section 5.2 of the law.
To implement Republic Act No. 8799, the Court promulgated its resolution of
November 21, 2000 in A.M. No. 00-11-03-SC designating certain branches of
the RTC to try and decide the cases enumerated in Section 5 of P.D. No. 902-
A. Among the RTCs designated as special commercial courts was the RTC
(Branch 138) in Makati City.
The subject matter involved was an intra-corporate controversy, not any  Termination of complainant’s services allegedly due to cessation of
incidents arising from, incidental to, or related to any case involving assets business operations of Zeta is deemed illegal
whose nature as ill-gotten wealth was yet to be determined.
Decision of the NLRC and the CA: Affirmed the decision of the Labor Arbiter
Moreover, the jurisdiction of the Sandiganbayan has been held not to extend
even to a case involving a sequestered company notwithstanding that the ISSUE: W/N petitioner is liable for illegally dismissing San Miguel
majority of the members of the board of directors were PCGG nominees.
HELD: YES
ZUELLIG FREIGHT AND CARGO SYSTEMS vs. NATIONAL LABOR
RELATIONS COMMISSION AND RONALDO V. SAN MIGUEL RATIO:
There was no abuse of discretion on the part of the CA and the NLRC.
DOCTRINE: Its decision was supported by the records and the applicable laws and
The mere change in the corporate name is not considered under the law as the jurisprudence. It is not enough to show mere abuse of discretion. It is
creation of a new corporation; hence, the renamed corporation remains liable necessary to demonstrate that the abuse of discretion was grave. The
for the illegal dismissal of its employee separated under that guise. cessation of business by Zeta was not a bona fide closure to be
regarded as a valid ground for the termination of employment of San
FACTS: Miguel within the ambit of Article 283 of theLabor Code.
San Miguel brought a complaint for unfair labor practice, illegal dismissal, non-
payment of salaries and moral damages against petitioner, formerly known as Article 283. Closure of establishment and reduction of personnel. — The
Zeta Brokerage Corporation (Zeta). employer may also terminate the employment of any employee due to the
installation of labor-saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
San Miguel was the checker/customs representative of Zeta since December
undertaking unless the closing is for the purpose of circumventing the
16, 1985; that in January 1994, he and other employees of Zeta were
provisions of this Title, by serving a written notice on the workers and
informed that Zeta would cease operations, and that all affected employees,
the Department of Labor and Employment at least one (1) month
including him, would be separated. Through a letter, Zeta informed him of his
before the intended date thereof. x x x.
termination effective March 31, 1994.
The amendments of the articles of incorporation of Zeta to change the
San Miguel contended that:
corporate name to Zuellig Freight and Cargo Systems, Inc. did not produce the
 The amendments of the articles of incorporation of Zeta were for the
dissolution of the former as a corporation. A change in the corporate name
purpose of changing the corporate name, broadening the primary
does not make a new corporation, whether effected by a special act or under a
functions, and increasing the capital stock
general law. It has no effect on the identity of the corporation, or on its
 Such amendments could not mean that Zeta had been thereby
property, rights, or liabilities. The corporation, upon such change in its name,
dissolved.
is in no sense a new corporation, nor the successor of the original corporation.
It is the same corporation with a different name, and its character is in no
Petitioner contends that:
respect changed.
 San Miguel’s termination from Zeta had been for a cause authorized
by the Labor Code;
Zeta and petitioner remained one and the same corporation. The change of
 That its predecessor-in-interest had complied with the requirements
name did not give petitioner the license to terminate employees of Zeta like
for termination due to the cessation of business operations;
San Miguel without just or authorized cause. The situation was not similar to
 It had no obligation to employ San Miguel in the exercise of its valid
that of an enterprise buying the business of another company where the
management prerogative;
purchasing company had no obligation to rehire terminated employees of the
 That all employees had been given sufficient time to make their
latter. Petitioner, despite its new name, was the mere continuation of Zeta’s
decision whether to accept its offer of employment or not, but he had
corporate being, and still held the obligation to honor all of Zeta’s obligations,
not responded to its offer within the time set; that because of his
one of which was to respect San Miguel’s security of tenure. The dismissal of
failure to meet the deadline, the offer had expired
San Miguel from employment on the pretext that petitioner, being a different
corporation, had no obligation to accept him as its employee, was illegal and
Decision of the Labor Arbiter:
ineffectual.
 There was merely a change of business name and primary purpose
and upgrading of stocks of the corporation