1. Yujuico v. Quiambao, G.R. No.
188639, January 29, 2007 associations to the Securities and Exchange
Respondents filed with the RTC a complaint against STRADEC. The complaint
prays that: (1) the election of Board ofDirectors be nullified on the ground of
improper venue, pursuant toSection 51 of the Corporation Code; (2) all
ensuing transactionsconducted by the elected directors be likewise nullified;
and (3) a special stockholders meeting be held anew.
Petitioner asserts that it is the SEC which has jurisdiction over the case.
Furthermore, the action has already prescribed since the case was filed beyond
15 day period from the day of the election. The respondents, in their comment,
counter that the appellate court correctly ruled that the power to hear and decide
controversies involving intra-corporate disputes, as well as to act on matters
incidental and necessary thereto, have been transferred from the SEC to the
RTCs designated as Special Commercial Courts.
ISSUES: (1) Whether only the SEC, not the RTC, has jurisdiction to order the
holding of a special stockholders meeting involving an intra-corporate contrive.
(2) Whether the action has already prescribed.
RULING: (1) No. Clearly, the RTC has the power to hear and decide the intra-
corporate controversy of the parties herein. Concomitant to said power is the
authority to issue orders necessary or incidental to the carrying out of the
powers expressly granted to it. Thus, the RTC may, in appropriate cases, order
the holding of a special meeting of stockholders or members of a corporation.
(2) Yes. Under Section 3, Rule 6 of the Interim Rules of Procedure Governing
Intra-Corporate Controversies under R.A. No. 8799, an election contest must be
"filed within 15 days from the date of the election." It was only on August 16,
2004 that respondents instituted an action questioning the validity of the March
1, 2004 stockholders election, clearly beyond the 15-day prescriptive period.
ISSUE: WON the CA erred in ruling that the RTC has jurisdiction over the
dispute – NO.
2. Gulfo v. Ancheta, G.R. No. 175301, August 15, 2012
- Edito and Emmanuela Guflo filed petition for review on certiorari
under Rule 34 to assail decision of CA reversing RTC decision,
remanding the case back to RTC for trial on the merits
- Guflos = neighbors of Jose Ancheta
o Both parties live in duplex residential unit on Zodia St,
Veraville Homes, Almanza Uno, Las Pinas City (Guflos in
9-B, Ancheta in 9-A)
- 1998: Ancheta’s septic tank overflowed
o human waste and offensive materials spread thru property
o Ancheta and family lived in unsanitary environment,
suffering fould order for several months
- 1999: early months
o Ancheta engaged services of ZE Malabanan Excavation
and Plumbing Services to fix overflow
o Discovery:
 Underground drainage pipe, connecting Ancheta’s
septic tank to subdivision’s drainage system, had
been closed by cement that blocked the free flow
of wastes from septic tank to drainage system
 Ancheta narrated that Guflos had recently
renovated their duplex + made some diggings in
same portion where drainage pipe had been
cemented + closing of rdainage pipe could not
have been result of accident, but was malicious
act by Guflos
o May 19, 1999: filed complaint for damages against Gulfos,
alleging malicious closure of portion of drainge pipe
leading to overflow of Ancheta’s septic tank
- June 1999: Guflos moved to dismiss complaint on ground of lack of
jurisdiction
o Since Anchest reside in same division and are members of
same homeowner’s association (Veraville Homeowners
Association Inc), case falls within jurisdiction of Home
Insurance and Guaranty Corp)
 HIGC is gocc created under RA 580, vested with
administrative supervision over homeowners’
Commission
 RA later repealed by EO 535 = transferred
regulatory and djudicative functions of SEC over
homeowners’ ssociations to HIGC
o Gulfos based arguments on Sec 1(b) Rule II of 1994
Revised Rules of Procedure regulating Hearing of
Homeowners’s Dispute:
 (b) Controversies arising out of intra-corporate
relations between and among members of the
association; between any or all of them and the
association of which they are members; and
between such association and the state/general
public or other entity in so far as it concerns its
right to exist as a corporate entity.1
- RTC: dismissed complaint for lack of jurisdiction
o Viewed case as involving intra-corporate dispute falling
under jurisdiction of HIGC
o Considering parties substantiated allegations that Vervaille
Homeowners Association is duly registered with HIGC,
thus Court has no jurisdiction over instant case
o Ancheta brought appeal
- CA:
o Reversed + remanded case to RTC for trial on merits, on
grounds that factual allegations support claim for damages
o Although case involves dispute between members of
homeowners’ association, it is not an intra-corporate matter
as it does not concern the right of the corporation to exist as
an entity
o Jurisdiction is determined by the allegations in the
complaint.
 Allegations in complaint and reliefs prayed for
are determinants of nature of action and of which
court has jurisdiction.
 Paragaphs 7, 8 and ( of complaint:
 7 – due to malicious act of
cutting/closing off protion of drainage
pipe, ancheta suffered sleepless nights
and claims damages
 8 – malicious and deliberate acts
violative of other’s rights especially
those inimical to health or life –
exemplary damages
 to protect and enforce rights, ancehta
had to hire services of counsel, hence
prays for attorneys fes
 complaint is an ordinary act for damages = purely
civil rather than corporate in character; Acnehta
merely seeks indemnification for harmy suffered;
no question re membership of Guflos in
association involved, nor existence of association
is in any manner under question
 complaint is based on either Articles 19, 20 or 21
of Civil Code on human relations; CA correctly
held that acts alleged in complaint may give rise
to indemnification under ART 2176 (quasi-delict)
 since issue of damages arising from Civil Code,
not intra-corporate controversy, RTC is
appropricate court to try case, and not the
homeowner’s association
o What is an intra-corporate dispute?
 Intra-corporate dispute is one that arises from
intra-corporate relations; relations between or
among stockholders; or the relationships between
the stockholders and the corporation. To limit the
broad definition, Court has applied the
 RELATIONSHIP test and the CONTROVERSY
test to determine whether the dispute is intra-
corporate in nature.
 RELATIONSHP TEST (Union Glass &
Container Corp): whether the relationship is
between:
 the corporation, partnership or
association and the public
 the corporation, partnership or
association and its stockholders,
partners, members or officers
 between the corporation, partnership or
association and the State insofar as its
franchise, permit or license to operate is
concerned
 and among the stockholders, partners or
associates themselves
 AS APPLIED:
o While the parties were
members of the same
association, this must be
supplemented by controversy
test; the relationship alone
does not ipso facto make the
dispute intra-corporate; the
mere existence of an intra-
corporate relationship does
not always give rise to an
intra-corporate controversy –
the incidents of the
relationship must be
considered to ascertain
whether the controvery itself
is intracorporate.
 CONTROVERSY TEST: dispute must be rooted
in the xistence of an intra-corporate relationship,
and must refer to the enforcement of the parties’
correlative rights and obligations under the
Corporation Code, as well as the internal and
intra-corporate regulatory rules of the
corporation, as determined through the
allegations in the complaint.
 AS APPLIED:
 From the allegations in the complaint,
Ancheta did not question the status of
Gulfos as members of the association
 There was no allegation assailing the
Gulfos’ rights or obligations on the
basis of the associations rules and by-
laws or regarding the Gulfo’s
relationship with the association
 What was alleged were demands for
civil indemnity and damages
 Thus the case involves a simple civil
action, which can be determined only
through a full-blown hearing before the
RTC
3. Zaragoza v. Tan, G.R. No. 225544, December 4, 2017
Petitioner Rogel N. Zaragoza was the Area Sales Manager of Consolidated
Distillers of the Far East Incorporated (Condis) in the Bicol Region. He was
dismissed. He filed an illegal dismissal case with money claims against Condis,
Winston Co and Dominador D. Hidalgo. Labor Arbiter (LA) declared his
termination or dismissal from employment by respondents Condis/Hidalgo as
illegal, thus ordering respondents to reinstate complainant, which reinstatement
is immediately executory, to his former position.
Condis alleged that petitioner can no longer be reinstated as his former sales
position no longer existed and there was no equivalent position to which he
could be reinstated. Condis and Hidalgo appealed the LA decision to NLRC.
Meanwhile, petitioner had already received a total amount of P454,986.98. He
then filed a motion[for issuance of alias writ of execution with notice of
appearance, arguing that he is likewise entitled to accrued salaries by reason of
the order of reinstatement, which as of December 3, 2012 amounted to
P2,294,897.47. He prayed that respondent Tan, as President of Condis, should
be held personally liable for the awards; and that respondent EDI should also be
held jointly and solidarily liable with Condis for the judgment award as the
transfer of manufacturing business of the latter to the former was done in bad
faith in order to evade payment/satisfaction of their liabilities in the labor case,
applying the doctrine of piercing the veil of corporate fiction.
ISSUE: Whether the monetary award in favor of petitioner in NLRC case can
still be enforced against respondent Tan in her capacity as presient of Condis
and against respondent Edi, even though they were not impleaded in said Labor
case
RULING: No. Since respondents were never impleaded in the illegal dismissal
case, they were never served with summons nor did they voluntarily appear in
the arbitration level; thus, the LA never acquired jurisdiction over them as to
order the piercing of the veil of corporate fiction, and to make them jointly and
severally liable with Condis for the judgment award to petitioner. We find
apropros the case of Pacific Rehouse Corporation v. Court of Appeals which
was cited by the CA in its decision, thus:
The Court already ruled in Kukan International Corporation v. Reyes that
compliance with the recognized modes of acquisition of jurisdiction cannot be
dispensed with even in piercing the veil of corporate fiction, to wit:
The principle of piercing the veil of corporate fiction, and the resulting
treatment of two related corporations as one and the same juridical person with
respect to a given transaction, is basically applied only to determine established
liability; it is not available to confer on the court a jurisdiction it has not
acquired, in the first place, over a party not impleaded in a case. Elsewise put, a
corporation not impleaded in a suit cannot be subject to the court's process of
piercing the veil of its corporate fiction. In that situation, the court has not
acquired jurisdiction over the corporation and, hence, any proceedings taken
against that corporation and its property would infringe on its right to due
process. Aguedo Agbayani, a recognized authority on Commercial Law, stated
as much:
Piercing the veil of corporate entity applies to determination of liability not of
jurisdiction. x x x
This is so because the doctrine of piercing the veil of corporate fiction comes to
play only during the trial of the case after the court has already acquired
jurisdiction over the corporation. Hence, before this doctrine can be applied,
based on the evidence presented, it is imperative that the court must first have
jurisdiction over the corporation. x x x"
4. Velarde v. Lopez, Inc., G.R. No. 153886, January 14, 2004
Lopez Inc., granted a loan to Mel V. Velarde (Mel), the General Manager of Sky
Vision which is a subsidiary company owned by Lopez Inc. However, Mel was
not able to pay the loan and Lopez Inc. proposed that he may use his retirement
benefits to partially settle his loan, but because of disagreement on the amount
of his retirement benefits, Mel refused the proposal which led Lopez Inc. to file
a complaint for the claim of the payment with interest. On his answer, Mel
claims that the loan was only a ”cover document” and that it was really a
reward for his loyalty and excellent performance in the company and
counterclaimed that he was entitled to a much larger amount of retirement
benefits than what Lopez Inc., was alleging.
Lopez Inc., petitioned to dismiss the case for lack of jurisdiction which drew
MEL to assert that the veil of corporate fiction must be pierced to hold Lopez
Inc., liable for his counterclaims. The Regional Trial Court denied the motion to
dismiss and the motion for reconsideration. Lopez Inc., then filed a petition for
certiorari to the Court of Appeals which held that Lopez Inc., is not a real party-
in-interest on the counterclaim and that there was a failure to show the presence
of any of the circumstances to justify the application of the principle of appointive positions other than the positions of the corporate officers, but the
”piercing the veil of corporate fiction.” persons occupying such positions are not considered as corporate officers
within the meaning of Section 25 of the Corporation Code and are not
ISSUE: Whether Mel Velarde, on a complaint for collection of sum of money empowered to exercise the functions of the corporate officers, except those
can raise a counterclaim for retirement benefits, unpaid salaries and incentives functions lawfully delegated to them. Their functioning and duties are to be
arising from services rendered by him in a subsidiary company of Lopez Inc. determined by the Board of Directors/Trustees.

RULING: While Mel Velarde correctly invokes the ruling in Atienza v. Court
of Appeals to postulate that not every denial of a motion to dismiss can be
corrected by certiorari under Rule 65 and that, as a general rule, the remedy
from such denial is to appeal in due course after a decision has been rendered
on the merits, there are exceptions thereto, as when the court in denying the
motion to dismiss acted without or in excess of jurisdiction or with patent grave
abuse of discretion, or when the assailed interlocutory order is patently
erroneous and the remedy of appeal would not afford adequate and expeditious
relief, or when the ground for the motion to dismiss is improper venue, res
judicata, or lack of jurisdiction as in the case at bar.
In determining which has jurisdiction over a case, the averments of the
complaint “counterclaim” taken as a whole are considered.
With regards to Mel Velarde‘s claim for unpaid salaries, unpaid share in net
income, reasonable return on the stock ownership plan and other benefits for
services rendered to Sky Vision, jurisdiction thereon pertains to the Securities
and Exchange Commission even if the complaint by a corporate officer
includes money claims since such claims are actually part of the prerequisite of
his position and, therefore interlinked with his relations with the corporation.
The question of remunerations involving a person who is not a mere employee
but a stockholder and officer of the corporation is not a simple labor problem
but a matter that comes within the area of corporate affairs and management as
is in fact a corporate controversy in contemplation of the Corporation Code.
In the case at bar, the respondent was not a corporate officer of Petitioner
Corporation because his position as General Manager was not specifically
mentioned in the roster of corporate officers in its corporate by-laws. Thus
respondent, can only be regarded as its employee or subordinate official.
Accordingly, respondent's dismissal as Petitioner Corporation’s General
Manager did not amount to an intra-corporate controversy. Jurisdiction
therefore properly belongs with the Labor Arbiter and not with the RTC.
In this Petition for Review on Certiorari under Rule 45 of the Rules of Court,
herein petitioners Marc II Marketing, Inc. and Lucila V. Joson assailed the
Decision[1] dated 20 June 2005 of the Court of Appeals in CA-G.R. SP No.
76624 for reversing and setting aside the Resolution[2] of the National Labor
Relations Commission (NLRC) dated 15 October 2002, thereby affirming the
Labor Arbiters Decision[3] dated 1 October 2001 finding herein respondent
Alfredo M. Josons dismissal from employment as illegal. In the questioned
Decision, the Court of Appeals upheld the Labor Arbiters jurisdiction over the
case on the basis that respondent was not an officer but a mere employee of
petitioner Marc II Marketing, Inc., thus, totally disregarding the latters
allegation of intra-corporate controversy. Nonetheless, the Court of Appeals
remanded the case to the NLRC for further proceedings to determine the proper
amount of monetary awards that should be given to respondent.
6. Chung Ka Bio v. IAC, G.R. No. L-71837, July 26, 1988

Mel Velarde argues nevertheless that jurisdiction over the subsidiary is justified
Philippine Blooming Mills Company, Inc. was incorporated for a term of 25
by piercing the veil of corporate fiction. Piercing the veil of corporate fiction is
years. The members of its board of directors executed a deed of assignment of
warranted, however, only in cases when the separate legal entity is used to all of the account receivables, properties, obligations and liabilities of the old
defeat public convenience, justify wrong, protect fraud, or defend crime, such PBM in favor of Chung Siong Pek in his capacity as treasurer of the new PBM,
that in the case of two corporations, the law will regard the corporations as then in the process of reincorporation. The new PMB was issued a certificate of
merged into one. incorporation by the Securities and Exchange Commission. Chung Ka Bio and
the other petitioners herein, all stockholders of the old PBM, filed with the SEC
5. Marc II Marketing, Inc. v. Joson, G.R. No. 171993, December 12, a petition for liquidation of both the old PBM and the new PBM. The allegation
2011 was that the former had become legally non-existent for failure to extend its
corporate life and that the latter had likewise been ipso facto dissolved for non-
Respondent Alfredo Joson was the General Manager, incorporator, director and use of the charter and continuous failure to operate within 2 years from
stockholder of Marc II Marketing (Petitioner Corporation). Before Petitioner incorporation.
Corporation was officially incorporated, respondent has already been engaged
by petitioner Lucila Joson, in her capacity as President of Marc Marketing Inc., ISSUE: Whether the new corporation has not substantially complied with the
to work as the General Manager of Petitioner Corporation through a two-year requirement of Section 22 of the new Corporation Code on non-user
management contract. because its stockholders never adopted a set of by-laws.

However, Petitioner Corporation decided to stop and cease its operation RULING: No. Non-filing of the by-laws will not result in automatic
wherein respondent's services were then terminated. Feeling aggrieved, dissolution of the corporation. Under Section 6(i) of PD 902-A, the SEC is
respondent filed a Complaint for Reinstatement and Money Claim against empowered to “suspend or revoked, after proper notice and hearing, the
petitioners before the Labor Arbiter which ruled in favor of respondent. The franchise or certificate of registration of a corporation” on the ground inter alia
National Labor and Relations Commission (NLRC) reversed said decision. The of “failure to file by-laws within the required period.” It is clear from this
Court of Appeals (CA) however, upheld the ruling of the Labor Arbiter. Hence, provision that there must first of all be a hearing to determine the existence of
this petition. the ground, and secondly, assuming such finding, the penalty is not necessarily
revocation but may be only suspension of the charter. In fact, under the rules
ISSUE: Whether or not the Labor Arbiter has jurisdiction over the controversy and regulations of the SEC, failure to file the by-laws on time may be penalized
at bar merely with the imposition of an administrative fine without affecting the
corporate existence of the erring firm.
RULING: Yes. While Article 217(a) 229 of the Labor Code, as amended,
provides that it is the Labor Arbiter who has the original and exclusive 7. CBBS, Inc. v. DBP, G.R. No. 154366, November 17, 2010
jurisdiction over cases involving termination or dismissal of workers when the
person dismissed or terminated is a corporate officer, the case automatically Spouses Robles entered into a mortgage contract with the DBP to create the
falls within the province of the Regional Trial Court (RTC). The dismissal of a State Theatre Building in Talisay, Cebu. Upon completion, Rudy Robles
corporate officer is always regarded as a corporate act and/or an intra-corporate executed a contract of lease in favour of Cebu Bionic Builders Supply.
controversy. However, the spouses defaulted on their obligation to pay and DBP
extrajudicially foreclosed the mortgage. DBP sent a letter to Cebu Bionic that if
In conformity with Section 25 of the Corporation Code, whoever are the they were interested in leasing the facilities, they would have to pay DBP.
corporate officers enumerated in the by-laws are the exclusive officers of the However, nothing came from these correspondences.
corporation and the Board has no power to create other officers without
amending first the corporate by-laws. However, the Board may create DBP then invited parties to bid on the property. Initially, Cebu Bionic submitted
their interest in bidding, but the price that they gave was insufficient. DBP then
awarded the auction to Respondents To Chip, Yap and Balila. In response to
several demand letters by the Respondents, Cebu Bionic filed a petition for
preliminary injunction, cancellation of deed of sale and specific performance
against DBP. Petitioners then related that, without their knowledge, DBP sold
the subject properties to respondents To Chip, Yap andBalila.The sale was
claimed to be simulated and fictitious, as DBP still received rentals from
petitioners until March 1991.By acquiring the subject properties, petitioners
contended that DBP was deemed to have assumed the contract of lease
executed between them and Rudy Robles. They alleged that the original leases
clause of the Right of First Option to Buy should be upheld.
Respondents To Chip, Yap and Balila argue that the instant petition should be
dismissed outright as the verification and certification of non-forum shopping
was executed only by petitioner Lydia Sia in her personal capacity, without the
participation of Cebu Bionic.
The trial court granted their complaint. The Court of Appeals similarly upheld
the decision of the trial court. Cebu Bionic filed a motion for entry of judgment,
but Respondents filed a motion for reconsideration on the ground that they
relied on the friend of their lawyer to personally file the MR, but apparently did
not. The court granted their MR, and reversed their judgment before. Thus, the
petitioners file the case before the Supreme Court.
ISSUE: Whether the verification (and certification of non-forum
shopping) in the instant petition was proper and was valid despite its
being signed by only one of the two petitioners
RULING: No. The Court is not persuaded. Except for the powers
which are expressly conferred on it by the Corporation Code and
those that are implied by or are incidental to its existence, a
corporation has no powers. It exercises its powers through its board
of directors and/or its duly authorized officers and agents. Thus, its
power to sue and be sued in any court is lodged with the board of
directors that exercises its corporate powers. 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 a specific act
of the board of directors.
In this case, respondents To Chip, Yap and Balila obviously
overlooked the Secretarys Certificate [55] attached to the instant
petition, which was executed by the Corporate Secretary of Cebu
Bionic. Unequivocally stated therein was the fact that the Board of
Directors of Cebu Bionic held a special meeting
8. BLTBC, Inc. v. Bitanga, G.R. No. 137934, August 10, 2011
For a valid transfer of stocks, there must be strict compliance with the mode of
transfer prescribed by law. The requirements are: (a) There must be delivery of
the stock certificate; (b) The certificate must be endorsed by the owner or his
attorney-in-fact or other persons legally authorized to make the transfer; and
(c) To be valid against third parties, the transfer must be recorded in the books
of the corporation. A deed of assignment of shares without requisite
endorsement and delivery is only valid between the parties. It does not
necessarily make the transfer effective as against the corporation.
Consequently, the petitioners, as mere assignees, cannot enjoy the status of a
stockholder, cannot vote nor be voted for, and will not be entitled to dividends,
insofar as the assigned shares are concerned. Parenthetically, the private
respondents cannot, as yet, be deprived of their rights as stockholders, until
and unless the issue of ownership and transfer of the shares in question is
resolved with finality.
The Potencianos, Delfin C. Yorro, and Maya Industries, Inc., entered into a Sale
and Purchase Agreement, whereby they sold to BMB Property Holdings, Inc.,
represented by its President, Benjamin Bitanga, their shares of stock in BLTB
representing 47.98% of the total outstanding capital stock of BLTB. Barely a
month after the Agreement was executed, Bitanga and Monina Grace Lim were
elected as new directors.
During a meeting of the Board, the newly elected directors scheduled the
annual stockholders’ meeting. Before the scheduled meeting, Michael
Potenciano wrote Bitanga, requesting for a postponement of the stockholders’
meeting due to the absence of a thirty-day advance notice. However, there was
no response on whether or not the request for postponement was favorably
acted upon. On the scheduled date of the meeting, a notice of postponement of
the stockholders’ meeting was published in the Manila Bulletin. Inasmuch as
there was no notice of postponement prior to that, a total of 286 stockholders
arrived and attended the meeting. The majority of the stockholders present
rejected the postponement and voted to proceed with the meeting. The
Potenciano group was re-elected to the Board of Directors, however, the
Bitanga group refused to relinquish their positions and continued to act as
directors and officers of BLTB.
The Bitanga group filed with the SEC a Complaint for Damages and Injunction
which, however, was denied. Likewise, the Potenciano group filed a Complaint
for Injunction and Damages with Preliminary Injunction and Temporary
Restraining Order with the SEC which issued a TRO enjoining the Bitanga
group from acting as officers and directors of BLTB.
The Bitanga group filed another complaint which was granted. It declared that
the stockholders’ meeting was void on the grounds that, first, Michael
Potenciano had himself asked for its postponement due to improper notice; and,
second, there was no quorum, since BMB Holdings, Inc., represented by the
Bitanga group, which then owned 50.26% of BLTB’s shares having purchased
the same from the Potenciano group, was not present at the said meeting.
The Potenciano group filed a petition for certiorari with the SEC En Banc. The
SEC En Banc set aside the Order of the Hearing Panel and issued the writ of
preliminary injunction prayed for. The Bitanga group immediately filed a
petition for certiorari with the Court of Appeals which reversed the assailed
Orders of the SEC En Banc and reinstating the Order of the Hearing Panel. The
Court of Appeals denied the Motions for Reconsideration.
ISSUE: Whether the SEC En Banc committed error in jurisdiction as to entitle
the Bitanga group to the extraordinary remedy of certiorari
RULING: No. In the Order of the SEC En Banc, the validity of the BLTB
stockholders’ meeting held was sustained, in light of the time-honored doctrine
in corporation law that a transfer of shares is not valid unless recorded in the
books of the corporation. The SEC En Banc went on to rule that –
It is not disputed that the transfer of the shares of the group of Dolores
Potenciano to the Bitanga group has not yet been recorded in the books of the
corporation. Hence, the group of Dolores Potenciano, in whose names those
shares still stand, were the ones entitled to attend and vote at the stockholders’
meeting of the BLTB. This being the case, the Hearing Panel committed grave
abuse of discretion in holding otherwise and in concluding that there was no
quorum in said meeting.
Based on the foregoing premises, the SEC En Banc issued a writ of preliminary
injunction against the Bitanga group. In so ruling, the SEC En Banc merely
exercised its wisdom and competence as a specialized administrative agency
specifically tasked to deal with corporate law issues. We are in full accord with
the SEC En Banc on this matter. Indeed, until registration is accomplished, the
transfer, though valid between the parties, cannot be effective as against the
corporation. Thus, the unrecorded transferee, the Bitanga group in this case,
cannot vote nor be voted for. The purpose of registration, therefore, is two-
fold: to enable the transferee to exercise all the rights of a stockholder,
including the right to vote and to be voted for, and to inform the corporation of
any change in share ownership so that it can ascertain the persons entitled to the
rights and subject to the liabilities of a stockholder. Until challenged in a proper
proceeding, a stockholder of record has a right to participate in any meeting; his
vote can be properly counted to determine whether a stockholders’ resolution
was approved, despite the claim of the alleged transferee. On the other hand, a
person who has purchased stock, and who desires to be recognized as a
stockholder for the purpose of voting, must secure such a standing by having
the transfer recorded on the corporate books. Until the transfer is registered, the
transferee is not a stockholder but an outsider.
9. Cosare v. BA Inc., G.R. No. 201298, February 5, 2014
Cosare filed a complaint against Broadcom and Dante Arevalo for constructive
dismissal, illegal suspension and monetary claims with the NCR Arbitration RULING: As a rule, the illegal dismissal of an officer or other employee of a
Branch of the NLRC. LA ruled for the respondents but NLRC ruled for Cosare private employer is properly cognizable by the LA Where the complaint for
and declared that there was constructive illegal dismissal. Before the CA, illegal dismissal concerns a corporate officer, however, the controversy falls
Broadcom & Arevalo assail the LA’s jurisdiction over the complaint alleging under the jurisdiction of the Securities and Exchange Commission (SEC),
that since the case concerns an intracorporate controversy, it is the RTC which because the controversy arises out of intra-corporate or partnership relations.
has exclusive jurisdiction pursuant to PD 902-A; hence, the labor complaint
should be dismissed. As basis for their contention that the case involved an The petitioners argue that the power to create corporate offices and to appoint
intracorporate controversy, they allege that Cosare is a stockholder, specifically the individuals to assume the offices was delegated by Matling’s Board of
an incorporator of Broadcom who was assigned 100 shares of stock; he was Directors to its President through By-Law No. V, as amended; and that any
also a corporate officer as he was promoted as AVP for Sales and Head of the office the President created, like the position of the respondent, was as valid
Technical Coordination. While generally, the president, vice-president, and effective a creation as that made by the Board of Directors.
secretary or treasurer are commonly regarded as the principal or executive
officers of a corporation, under Sec. 25 of the Corporation Code and under The respondent counters that Matling’s By-Laws did not list his position as
Broadcom’s By Laws, the Board of Directors of Broadcom is allowed to Vice President for Finance and Administration as one of the corporate offices;
appoint such other officers as it may deem necessary. that Matling’s By-Law No. III listed only four corporate officers, namely:
President, Executive Vice President, Secretary, and Treasurer; 18 that the
ISSUE: Whether there exists an intracorporate controversy corporate offices contemplated in the phrase "and such other officers as may be
provided for in the by-laws" found in Section 25 of the Corporation Code
RULING: There is no intracorporate controversy; hence, LA had jurisdiction should be clearly and expressly stated in the By-Laws.
over the complaint. Cosare is not a corporate officer but merely a regular officer
even if the by-laws empowered the board of directors to create such an office. We agree with respondent. Conformably with Section 25, a position must be
To allow the creation of a corporate officer position by virtue of such enabling expressly mentioned in the By-Laws in order to be considered as a corporate
clause wi result in the circumvention of that constitutionally well-protected office. Thus, the creation of an office pursuant to or under a By-Law enabling
right of every employee to security of tenure. That he is a stockholder is of no provision is not enough to make a position a corporate office.
importance since not all conflicts bet. stockholders and the company are
intracorporate disputes. Cosare, having been constructively dismissed is entitled An "office" is created by the charter of the corporation and the officer is elected
to damages and claims. by the directors or stockholders. On the other hand, an employee occupies no
office and generally is employed not by the action of the directors or
DOCTRINE: stockholders but by the managing officer of the corporation who also
 Not all conflicts between the stockholders and the corporation are determines the compensation to be paid to such employee. In this case,
classified as intra-corporate. There are other facts to consider in respondent was appointed vice president for nationwide expansion by Malonzo,
determining whether the dispute involves corporate matters as to consider petitioner’s general manager, not by the board of directors of petitioner. It was
them as intra-corporate controversies.” also Malonzo who determined the compensation package of respondent. Thus,
 In determining the existence of an intra-corporate dispute, the status or respondent was an employee, not a "corporate officer."
relationship of the parties AND the nature of the question that is the
subject of the controversy must be taken into account. Moreover, the Board of Directors of Matling could not validly delegate the
 CONTROVERSY TEST. Under the nature of the controversy test, power to create a corporate office to the President, in light of Section 25 of the
the incidents of that relationship must also be considered for the purpose Corporation Code requiring the Board of Directors itself to elect the corporate
of ascertaining whether the controversy itself is intra-corporate. The officers. Verily, the power to elect the corporate officers was a discretionary
controversy must not only be rooted in the existence of an intra-corporate power that the law exclusively vested in the Board of Directors, and could not
relationship, but must as well pertain to the enforcement of the parties’ be delegated to subordinate officers or agents.22 The office of Vice President
correlative rights and obligations under the Corporation Code and the for Finance and Administration created by Matling’s President pursuant to By
internal and intra-corporate regulatory rules of the corporation. If the Law No. V was an ordinary, not a corporate, office.
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 To emphasize, the power to create new offices and the power to appoint the
intra-corporate controversy exists. officers to occupy them vested by By-Law No. V merely allowed Matling’s
President to create non-corporate offices to be occupied by ordinary employees
10. MICC v. Coros, G.R. No. 157802, October 13, 2010 of Matling. Such powers were incidental to the President’s duties as the
executive head of Matling to assist him in the daily operations of the business.
Ricardo Coros, the Vice President for Finance and Administration of Matling
Industrial was dismissed. On August 10, 2000, he filed a complaint for illegal 11. Esguerra v. HP, Inc., G.R. No. 182571, September 2, 2013
suspension and illegal dismissal against Matling in the NLRC. Matling moved
to dismiss the complaint on the ground of lack of jurisdiction. They allege that Respondent Esguerra filed on December 12, 1989 with the RTC, Malolos,
since Coros is a member of Matling’s Board of Directors and a corporate office, Bulacan, an action to annul the Free Patent in the name of de Guzman.
the issue is an intra-corporate controversy. As such, jurisdiction lies with the Esguerra claimed that he was the owner of the subject land with an approximate
Securities and Exchange Commission (SEC). area of 47,000 square meters. Esguerra learned that the said parcel of land was
being offered for sale by de Guzman to Hi-Cement Corporation (now HOLCIM
Coros, in opposing the motion filed by Matling, alleged that his status as a Philippines, Inc.). He later amended his complaint to impleaded Hi-Cement as a
member of the Board was doubtful since he was not formally elected and he did co-defendant since the latter was hauling marble from the subject land. The
not own a single share of stock. Even assuming that he had been a Director of RTC dismissed Esguerra’s complaint but on appeal, the CA reversed. The
Matling, he had been removed as the Vice President for Finance and Supreme Court in its Decision dated December 27, 2002 affirmed the CA’s
Administration, not as a Director, a fact that the notice of his termination dated decision. After attaining finality, the case was remanded to the RTC for
April 10, 2000 showed. execution.
Now, herein petitioners (heirs of Esguerra), filed an Omnibus Motion with the
Labor Arbiter (LA) ruled in favor of Matling. On appeal, the NLRC reversed RTC, manifesting that the Court’s December 27, 2002 decision has yet to be
the decision of the LA and ruled that the case is cognizable by the LA. Matling executed. HOLCIM filed a motion for reconsideration alleging that it did not
appealed to the CA through a petition for certiorari which the CA dismissed as owe any amount of royalty to the petitioners for the extracted limestone from
well. the subject land. It also filed a Manifestation and Motion for Ocular Inspection
to prove that it did not extract limestone from the subject land. Despite all of
ISSUE: Whether or not Coros was a corporate officer of Matling this, an alias writ of execution and notices of garnishment on several banks
against HOLCIM have been issued by the RTC to cover the payment of
royalties to petitioner for the former's extraction of limestone, etc. HOLCIM
filed a Petition for Certiorari with Urgent Applications for Temporary
Restraining Order and/or Writ of Preliminary Injunction with the CA. The CA
granted the motion.
purposely provided for petitioner's disqualification and deprived him of his
vested right as afore-mentioned, hence the amended by-laws are null and void.
ISSUE: Whether SMC’s BoD acted in bad faith in making the amendment
which disqualified Gokongwei from being elected as Director.

ISSUE: Whether the CA gravely erred in not dismissing HOLCIM's petition RULING: NO. SMC is merely protecting its interest from Gokongwei, who
for certiorari on the ground of lack of Board Resolution authorizing the filing of owns companies in direct competition with SMC’s business. Although in the
petition. strict and technical sense, directors of a private corporation are not regarded as
trustees, there cannot be any doubt that their character is that of a fiduciary
RULING: The general rule is that a corporation can only exercise its powers insofar as the corporation and the stockholders as a body are concerned. As
and transact its business through its board of directors and through its officers agents entrusted with the management of the corporation for the collective
and agents when authorized by a board resolution or its bylaws. The power of a benefit of the stockholders, they occupy a fiduciary relation, and in this sense
corporation to sue and be sued is exercised by the board of directors. The the relation is one of trust. It springs from the fact that directors have the
physical acts of the corporation, like the signing of documents, can be control and guidance of corporate affairs and property; hence of the property
performed only by natural persons duly authorized for the purpose by corporate interests of the stockholders. Equity recognizes that stockholders are the
bylaws or by a specific act of the board. Absent the said board resolution, a proprietors of the corporate interests and are ultimately the only beneficiaries
petition may not be given due course. thereof

In the case at bar, HOLCIM attached to its Petition for Certiorari before the CA
a Secretary’s Certificate authorizing Mr. Paul M. O’Callaghan (O’Callaghan),
its Chief Operating Officer, to nominate, designate and appoint the
corporation’s authorized representative in court hearings and conferences and
the signing of court pleadings. It also attached the Special Power of Attorney
dated June 9, 2006, signed by O’Callaghan, appointing Sycip Salazar
Hernandez & Gatmaitan and/or any of its lawyers to represent HOLCIM; and
consequently, the Verification and Certification of Non Forum Shopping signed
by the authorized representative. To be sure, HOLCIM, in its Reply filed in the
CA, attached another Secretary’s Certificate, designating and confirming
O’Callaghan’s power to authorize Sycip Salazar Hernandez & Gatmaitan
and/or any of its lawyers to file for and on behalf of HOLCIM, the pertinent
civil and/or criminal actions pending before the RTC.
It is obviously to prevent the creation of an opportunity for an officer or
director of San Miguel Corporation, who is also the officer or owner of a
competing corporation, from taking advantage of the information which he
acquires as director to promote his individual or corporate interests to the
prejudice of San Miguel Corporation and its stockholders, that the questioned
amendment of the by-laws was made.
Certainly, where two corporations are competitive in a substantial sense, it
would seem improbable, if not impossible, for the director, if he were to
discharge effectively his duty, to satisfy his loyalty to both corporations and
place the performance of his corporation duties above his personal concerns.
13. GD Express Worldwide NV v. CA, G.R. No. 136978, May 8, 2009

The foregoing convinces the Court that the CA did not err in admitting
HOLCIM’s petition before it. HOLCIM attached all the necessary documents
for the filing of a petition for certiorari before the CA. Indeed, there was no
complete failure to attach a Certificate of Non-Forum Shopping. In fact, there
was such a certificate. While the board resolution may not have been attached,
HOLCIM complied just the same when it attached the Secretary’s Certificate
dated July 17, 2006, thus proving that O’Callaghan had the authority from the
board of directors to appoint the counsel to represent them. The Court
recognizes the compliance made by HOLCIM in good faith since after the
petitioners pointed out the said defect, HOLCIM submitted the Secretary’s
Certificate dated July 17, 2006, confirming the earlier Secretary’s Certificate
dated June 9, 2006.
12. Gokongwei, Jr. v. SEC, G.R. No. L-45911, April 11, 1979
Gokonwei alleged that on September 18, 1976, individual respondents amended
by bylaws of San Miguel Corporation, basing their authority to do so on a
resolution of the stockholders adopted on March 13, 1961, when the
outstanding capital stock of respondent corporation was only P70,139.740.00,
divided into 5,513,974 common shares at P10.00 per share and 150,000
preferred shares at P100.00 per share. At the time of the amendment, the
outstanding and paid up shares totalled 30,127,043, with a total par value of
P301,270,430.00. It was contended that according to section 22 of the
Corporation Law and Article VIII of the by-laws of the corporation, the power
to amend, modify, repeal or adopt new by-laws may be delegated to the Board
of Directors only by the affirmative vote of stockholders representing not less
than 2/3 of the subscribed and paid up capital stock of the corporation, which
2/3 should have been computed on the basis of the capitalization at the time of
the amendment. Since the amendment was based on the 1961 authorization,
petitioner contended that the Board acted without authority and in usurpation of
the power of the stockholders.
It was claimed that prior to the questioned amendment, petitioner had all the
qualifications to be a director of respondent corporation, being a substantial
stockholder thereof; that as a stockholder, petitioner had acquired rights
inherent in stock ownership, such as the rights to vote and to be voted upon in
the election of directors; and that in amending the by-laws, respondents
Petitioner GD Express Worldwide N.V. (GD Express) is a corporation duly
organized and existing under the laws of the Netherlands. On 27 September
1990, its predecessor-in-interest, TNT Limited (TNT) entered into a joint
venture agreement with Philippine Aerospace Development Corporation
(PADC) for the establishment of a domestic corporation as their corporate
vehicle to operate as an international air freight carrier. The joint venture
agreements stipulated that PADC would own 80% of the shares of stock of the
corporate vehicle while TNT would own the remaining 20%.
The agreements essentially laid down the relationship between TNT and PADC
and the management, control and existence of the corporation. Also, pursuant to
the joint venture agreements, PADC and TNT registered with the SEC a
corporation to be known as Air Philippines Corporation (APC).
Subsequently, on 11 December 1992, APC amended its articles of incorporation
to change its corporate name to Pacific East Asia Cargo Airlines, Inc. (PEAC).
On 02 April 1993, TNT transferred all its shares in PEAC to petitioner GD
Express. PEAC immediately commenced operations. Herein petitioner Amihan
Management Services, Inc. (Amihan), a domestic corporation, was contracted
to undertake the daily operations in PEAC pursuant to the joint venture
agreement.
Sometime in 1994, the Office of the President mandated the Committee on
Privatization to require the Asset Privatization Trust (APT) to dispose of
PADC’s 80% share in PEAC. Thus, petitioner GD Express and PADC executed
the Terms of Reference that would govern the disposition of PADC’s equity
comprising 12,800 subscribed shares of stock in PEAC.
ISSUE: Whether an intra-corporate dispute is exclusively cognizable by the
SEC
RULING: NO. The designation of certain RTC branches to handle specific
cases is nothing new. For instance, pursuant to the provisions of the R.A. No.
6657 or the Comprehensive Agrarian Reform Law, the Supreme Court has
assigned certain RTC branches to hear and decide cases under Sections 56 and
57 of R.A. No. 6657.
The RTC exercising jurisdiction over an intra-corporate dispute can be likened CCDCP Mining Corporation (CDCP Mining), an affiliate of CDCP, obtained
to an RTC exercising its probate jurisdiction or sitting as a special agrarian loans from Marubeni Corporation of Japan (Marubeni). A CDCP official issued
court. The designation of the SCCs as such has not in any way limited their letters of guarantee for the loans although there was no CDCP Board Resolution
jurisdiction to hear and decide cases of all nature, whether civil, criminal or authorizing the issuance of such letters of guarantee. CDCP Mining secured the
special proceedings. Marubeni loans when CDCP and CDCP Mining were still privately owned and
managed.
Incidentally, not all the prayers and reliefs sought by respondent Filchart in
SEC Case No. 08-97-5746 can be characterized as intra-corporate in nature. For In 1983, CDCP’s name was changed to Philippine National Construction
instance, respondent Filchart’s petition does not allege that the cause of action Corporation (PNCC) in order to reflect that the Government already owned
for the nullification of the management contract between PEAC and petitioner 90.3% of PNCC and only 9.70% is under private ownership. Meanwhile, the
Amihan is being instituted as a derivative suit. It is an ordinary action for the Marubeni loans to CDCP Mining remained unpaid.
nullification of a contract, which is cognizable by courts of general jurisdiction.
On 20 October 2000 and 22 November 2000, the PNCC Board of Directors
14. LBP v. Ascot Holdings & Equities, Inc., G.R. No. 175163, October (PNCC Board) passed Board Resolutions admitting PNCC’s liability to
19, 2007 Marubeni. Previously, for two decades the PNCC Board consistently refused to
admit any liability for the Marubeni loans.
After the Philippine Airlines (PAL) was privatized, Land Bank purchased from
the National Government PAL shares. Minority stockholders in PR Holdings In January 2001, Marubeni assigned its entire credit to Radstock Securities
filed a case with the Securities and Exchange Commission (SEC), seeking the Limited (Radstock), a foreign corporation. Radstock immediately sent a notice
distribution of PR Holdings’ shares of stock in PAL to its stockholders in and demand letter to PNCC.
proportion to their equity. Land Bank, along with PNB, DBP, AFP-RSBS and
GSIS, have the so- called put-option to sell their PAL shares of stock to PNCC and Radstock entered into a Compromise Agreement. Under this
respondents and the latter are obligated to buy the same at Five Pesos (P5.00) agreement, PNCC shall pay Radstock the reduced amount of
per share on the sixth year after the effectivity of the Stockholders’ Agreement. P6,185,000,000.00 in full settlement of PNCC’s guarantee of CDCP Mining’s
Instead of honoring the Stockholders' Agreement, respondents filed with the debt allegedly totaling P17,040,843,968.00 (judgment debt as of 31 July 2006).
RTC of Makati a complaint against Land Bank, PNB, DBP, GSIS, AFP-RSBS To satisfy its reduced obligation, PNCC undertakes to (1) "assign to a third
and the Republic of the Philippines, praying that they be released from the party assignee to be designated by Radstock all its rights and interests" to the
obligation to buy the PAL shares of petitioner and other defendants therein at listed real properties of PNCC; (2) issue to Radstock or its assignee common
P5.00 per share, as earlier agreed upon under the Stockholders' Agreement, on shares of the capital stock of PNCC issued at par value which shall comprise
ground of alleged radical change in the conditions prevailing at the time the 20% of the outstanding capital stock of PNCC; and (3) assign to Radstock or its
said agreement was entered and the present. Trial court ruled in favor of the assignee 50% of PNCC’s 6% share, for the next 27 years, in the gross toll
respondents. Trial court denied Land Bank's motion for reconsideration. revenues of the Manila North Tollways Corporation.
Therefrom, Land Bank decided to go to the CA on a petition for review. For the Luis Sison, a stockholder and former PNCC President and Chairman, filed a
purpose, it filed with the CA, a motion for extension of time to file the intended derivative suit questioning the legality of the compromise agreement.
petition for review. The motion was denied by the CA.
ISSUE: Whether Sison’s derivative suit is valid
ISSUE: Whether the filing of a motion for reconsideration before the trial court
toll the reglementary period to appeal the judgment RULING: YES. Sison has legal standing to challenge the Compromise
Agreement. Although there was no allegation that Sison filed the case as a
RULING: No. It is beyond quibbling that the assailed “Judgment” in Civil derivative suit in the name of PNCC, it could be fairly deduced that Sison was
Case was issued by the RTC in the exercise of its special jurisdiction over intra- assailing the Compromise Agreement as a stockholder of PNCC.
corporate controversies under R.A. No. 8799. Civil Case was, therefore,
governed by the Interim Rules of Corporate Rehabilitation and the Interim A derivative action is a suit by a stockholder to enforce a corporate cause of
Rules of Procedure Governing Intra- Corporate Controversies under R.A. No. action. Under the Corporation Code, where a corporation is an injured party, its
8799, as well as A.M. No. 04- 9-07-SC of this Court prescribing the mode of power to sue is lodged with its board of directors or trustees. However, an
appeal from decisions of the RTC in intra-corporate controversies. individual stockholder may file a derivative suit on behalf of the corporation to
protect or vindicate corporate rights whenever the officials of the corporation
Under Section 8(3), Rule 1 of the Interim Rules of Procedure Governing Intra- refuse to sue, or are the ones to be sued, or hold control of the corporation. In
Corporate Controversies Under R.A. No. 8799, motion for new trial, or for such actions, the corporation is the real party-in-interest while the suing
reconsideration of judgment or order, or for re- opening of trial are prohibited stockholder, on behalf of the corporation, is only a nominal party.
pleadings in said cases. Hence, the filing by petitioner of a motion for
reconsideration before the trial court did not toll the reglementary period to In this case, the PNCC Board cannot conceivably be expected to attack the
appeal the judgment via a petition for review under Rule 43 of the 1997 Rules validity of the Compromise Agreement since the PNCC Board itself approved
of Civil Procedure, as amended. the Compromise Agreement. In fact, the PNCC Board steadfastly defends the
Compromise Agreement for allegedly being advantageous to PNCC.
As a consequence, the CA has no more jurisdiction to entertain the petition for
review which Land Bank intended to file before it, much less to grant the
motion for extension of time for the filing thereof. The prohibited motion for
reconsideration filed by the petitioner with the trial court did not suspend the
period to appeal the RTC’s “Judgment”.

Consequently, that “Judgment” became final and executory 15-days thereafter.

When petitioner filed a motion for extension to file a petition for review in the
CA one hundred twenty-four (124) days after it received the RTC “Judgment,”
there was no more period to extend. Given these undeniable facts, the CA
cannot be faulted for denying petitioner’s motion for extension. There is no
abuse, much less grave abuse, of discretion, to speak of.

15. SADC v. RS Limited, G.R. No. 178158, December 4, 2009