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.
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
ISSUE: WON the CA erred in ruling that the RTC has jurisdiction over the
dispute – NO.
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 ISSUE: Whether Mel Velarde, on a complaint for collection of sum of money
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
•”piercing the veil of corporate fiction.”
can raise a counterclaim for retirement benefits, unpaid salaries and incentives
arising from services rendered by him in a subsidiary company of Lopez Inc.
 In the case at bar, the respondent was not a corporate officer of Petitioner
RULING: While Mel Velarde correctly invokes the ruling in Atienza v. Court Corporation because his position as General Manager was not specifically
of Appeals to postulate that not every denial of a motion to dismiss can be mentioned in the roster of corporate officers in its corporate by-laws. Thus
corrected by certiorari under Rule 65 and that, as a general rule, the remedy from respondent, can only be regarded as its employee or subordinate official.
such denial is to appeal in due course after a decision has been rendered on the Accordingly, respondent's dismissal as Petitioner Corporation’s General
merits, there are exceptions thereto, as when the court in denying the motion to Manager did not amount to an intra-corporate controversy. Jurisdiction therefore
dismiss acted without or in excess of jurisdiction or with patent grave abuse of properly belongs with the Labor Arbiter and not with the RTC.
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 In this Petition for Review on Certiorari under Rule 45 of the Rules of Court,
ground for the motion to dismiss is improper venue, res judicata, or lack of herein petitioners Marc II Marketing, Inc. and Lucila V. Joson assailed the
jurisdiction as in the case at bar. Decision[1] dated 20 June 2005 of the Court of Appeals in CA-G.R. SP No.
In determining which has jurisdiction over a case, the averments of the complaint 76624 for reversing and setting aside the Resolution[2] of the National Labor
“counterclaim” taken as a whole are considered. Relations Commission (NLRC) dated 15 October 2002, thereby affirming the
Labor Arbiters Decision[3] dated 1 October 2001 finding herein respondent
With regards to Mel Velarde‘s claim for unpaid salaries, unpaid share in net Alfredo M. Josons dismissal from employment as illegal. In the questioned
income, reasonable return on the stock ownership plan and other benefits for Decision, the Court of Appeals upheld the Labor Arbiters jurisdiction over the
services rendered to Sky Vision, jurisdiction thereon pertains to the Securities case on the basis that respondent was not an officer but a mere employee of
and Exchange Commission even if the complaint by a corporate officer includes petitioner Marc II Marketing, Inc., thus, totally disregarding the latters allegation
money claims since such claims are actually part of the prerequisite of his of intra-corporate controversy. Nonetheless, the Court of Appeals remanded the
position and, therefore interlinked with his relations with the corporation. The case to the NLRC for further proceedings to determine the proper amount of
question of remunerations involving a person who is not a mere employee but a monetary awards that should be given to respondent.
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 6. Chung Ka Bio v. IAC, G.R. No. L-71837, July 26, 1988
fact a corporate controversy in contemplation of the Corporation Code.
Philippine Blooming Mills Company, Inc. was incorporated for a term of 25
Mel Velarde argues nevertheless that jurisdiction over the subsidiary is justified years. The members of its board of directors executed a deed of assignment of
by piercing the veil of corporate fiction. Piercing the veil of corporate fiction isall of the account receivables, properties, obligations and liabilities of the old
warranted, however, only in cases when the separate legal entity is used to defeat PBM in favor of Chung Siong Pek in his capacity as treasurer of the new PBM,
public convenience, justify wrong, protect fraud, or defend crime, such that in then in the process of reincorporation. The new PMB was issued a certificate of
the case of two corporations, the law will regard the corporations as merged into incorporation by the Securities and Exchange Commission. Chung Ka Bio and
one. the other petitioners herein, all stockholders of the old PBM, filed with the SEC
a petition for liquidation of both the old PBM and the new PBM. The allegation
5. Marc II Marketing, Inc. v. Joson, G.R. No. 171993, December 12, was that the former had become legally non-existent for failure to extend its
2011 corporate life and that the latter had likewise been ipso facto dissolved for non-
use of the charter and continuous failure to operate within 2 years from
Respondent Alfredo Joson was the General Manager, incorporator, director and incorporation.
stockholder of Marc II Marketing (Petitioner Corporation). Before Petitioner
Corporation was officially incorporated, respondent has already been engaged by ISSUE: Whether the new corporation has not substantially complied with the
petitioner Lucila Joson, in her capacity as President of Marc Marketing Inc., to two-year requirement of Section 22 of the new Corporation Code on non-user
work as the General Manager of Petitioner Corporation through a management because its stockholders never adopted a set of by-laws.
contract.
RULING: No. Non-filing of the by-laws will not result in automatic dissolution
However, Petitioner Corporation decided to stop and cease its operation wherein of the corporation. Under Section 6(i) of PD 902-A, the SEC is empowered to
respondent's services were then terminated. Feeling aggrieved, respondent filed “suspend or revoked, after proper notice and hearing, the franchise or certificate
a Complaint for Reinstatement and Money Claim against petitioners before the of registration of a corporation” on the ground inter alia of “failure to file by-
Labor Arbiter which ruled in favor of respondent. The National Labor and laws within the required period.” It is clear from this provision that there must
Relations Commission (NLRC) reversed said decision. The Court of Appeals first of all be a hearing to determine the existence of the ground, and secondly,
(CA) however, upheld the ruling of the Labor Arbiter. Hence, this petition. assuming such finding, the penalty is not necessarily revocation but may be only
suspension of the charter. In fact, under the rules and regulations of the SEC,
ISSUE: Whether or not the Labor Arbiter has jurisdiction over the controversy failure to file the by-laws on time may be penalized merely with the imposition
at bar 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 falls Spouses Robles entered into a mortgage contract with the DBP to create the State
within the province of the Regional Trial Court (RTC). The dismissal of a Theatre Building in Talisay, Cebu. Upon completion, Rudy Robles executed a
corporate officer is always regarded as a corporate act and/or an intra-corporate contract of lease in favour of Cebu Bionic Builders Supply. However, the spouses
controversy. defaulted on their obligation to pay and DBP extrajudicially foreclosed the
mortgage. DBP sent a letter to Cebu Bionic that if they were interested in leasing
In conformity with Section 25 of the Corporation Code, whoever are the the facilities, they would have to pay DBP. However, nothing came from these
corporate officers enumerated in the by-laws are the exclusive officers of the correspondences.
corporation and the Board has no power to create other officers without
amending first the corporate by-laws. However, the Board may create appointive DBP then invited parties to bid on the property. Initially, Cebu Bionic submitted
positions other than the positions of the corporate officers, but the persons their interest in bidding, but the price that they gave was insufficient. DBP then
occupying such positions are not considered as corporate officers within the awarded the auction to Respondents To Chip, Yap and Balila. In response to
meaning of Section 25 of the Corporation Code and are not empowered to several demand letters by the Respondents, Cebu Bionic filed a petition for
exercise the functions of the corporate officers, except those functions lawfully preliminary injunction, cancellation of deed of sale and specific performance
delegated to them. Their functioning and duties are to be determined by the Board against DBP. Petitioners then related that, without their knowledge, DBP sold
of Directors/Trustees. 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 the Board of Directors, however, the Bitanga group refused to relinquish their
contended that DBP was deemed to have assumed the contract of lease executed positions and continued to act as directors and officers of BLTB.
between them and Rudy Robles. They alleged that the original leases clause of
the Right of First Option to Buy should be upheld. The Bitanga group filed with the SEC a Complaint for Damages and Injunction
which, however, was denied. Likewise, the Potenciano group filed a Complaint
Respondents To Chip, Yap and Balila argue that the instant petition should be for Injunction and Damages with Preliminary Injunction and Temporary
dismissed outright as the verification and certification of non-forum shopping Restraining Order with the SEC which issued a TRO enjoining the Bitanga group
was executed only by petitioner Lydia Sia in her personal capacity, without the from acting as officers and directors of BLTB.
participation of Cebu Bionic.
The Bitanga group filed another complaint which was granted. It declared that
The trial court granted their complaint. The Court of Appeals similarly upheld the stockholders’ meeting was void on the grounds that, first, Michael Potenciano
the decision of the trial court. Cebu Bionic filed a motion for entry of judgment, had himself asked for its postponement due to improper notice; and, second, there
but Respondents filed a motion for reconsideration on the ground that they relied was no quorum, since BMB Holdings, Inc., represented by the Bitanga group,
on the friend of their lawyer to personally file the MR, but apparently did not. which then owned 50.26% of BLTB’s shares having purchased the same from
The court granted their MR, and reversed their judgment before. Thus, the the Potenciano group, was not present at the said meeting.
petitioners file the case before the Supreme Court.
The Potenciano group filed a petition for certiorari with the SEC En Banc. The
ISSUE: Whether the verification (and certification of non-forum SEC En Banc set aside the Order of the Hearing Panel and issued the writ of
shopping) in the instant petition was proper and was valid despite its preliminary injunction prayed for. The Bitanga group immediately filed a petition
being signed by only one of the two petitioners 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
RULING: No. The Court is not persuaded. Except for the powers Appeals denied the Motions for Reconsideration.
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 ISSUE: Whether the SEC En Banc committed error in jurisdiction as to entitle
no powers. It exercises its powers through its board of directors and/or the Bitanga group to the extraordinary remedy of certiorari
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 RULING: No. In the Order of the SEC En Banc, the validity of the BLTB
corporate powers. Physical acts, like the signing of documents, can be stockholders’ meeting held was sustained, in light of the time-honored doctrine
performed only by natural persons duly authorized for the purpose by in corporation law that a transfer of shares is not valid unless recorded in the
corporate by-laws or by a specific act of the board of directors. books of the corporation. The SEC En Banc went on to rule that –

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
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.

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
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
Branch of the NLRC. LA ruled for the respondents but NLRC ruled for Cosare
and declared that there was constructive illegal dismissal. Before the CA,
Broadcom & Arevalo assail the LA’s jurisdiction over the complaint alleging
that since the case concerns an intracorporate controversy, it is the RTC which
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
intracorporate controversy, they allege that Cosare is a stockholder, specifically
an incorporator of Broadcom who was assigned 100 shares of stock; he was also
a corporate officer as he was promoted as AVP for Sales and Head of the President created, like the position of the respondent, was as valid and effective
Technical Coordination. While generally, the president, vice-president, secretary a creation as that made by the Board of Directors.
or treasurer are commonly regarded as the principal or executive officers of a
corporation, under Sec. 25 of the Corporation Code and under Broadcom’s By The respondent counters that Matling’s By-Laws did not list his position as Vice
Laws, the Board of Directors of Broadcom is allowed to appoint such other President for Finance and Administration as one of the corporate offices; that
officers as it may deem necessary. Matling’s By-Law No. III listed only four corporate officers, namely: President,
Executive Vice President, Secretary, and Treasurer; 18 that the corporate offices
ISSUE: Whether there exists an intracorporate controversy 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 should be clearly and
RULING: There is no intracorporate controversy; hence, LA had jurisdiction 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. To We agree with respondent. Conformably with Section 25, a position must be
allow the creation of a corporate officer position by virtue of such enabling clause expressly mentioned in the By-Laws in order to be considered as a corporate
wi result in the circumvention of that constitutionally well-protected right of office. Thus, the creation of an office pursuant to or under a By-Law enabling
every employee to security of tenure. That he is a stockholder is of no importance provision is not enough to make a position a corporate office.
since not all conflicts bet. stockholders and the company are intracorporate
disputes. Cosare, having been constructively dismissed is entitled to damages and An "office" is created by the charter of the corporation and the officer is elected
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 stockholders
DOCTRINE: but by the managing officer of the corporation who also determines the
 Not all conflicts between the stockholders and the corporation are classified compensation to be paid to such employee. In this case, respondent was
as intra-corporate. There are other facts to consider in determining whether appointed vice president for nationwide expansion by Malonzo, petitioner’s
the dispute involves corporate matters as to consider them as intra-corporate general manager, not by the board of directors of petitioner. It was also Malonzo
controversies.” who determined the compensation package of respondent. Thus, respondent was
 In determining the existence of an intra-corporate dispute, the status or 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 power
 CONTROVERSY TEST. Under the nature of the controversy test, 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 of Corporation Code requiring the Board of Directors itself to elect the corporate
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 be
relationship, but must as well pertain to the enforcement of the parties’ delegated to subordinate officers or agents.22 The office of Vice President for
correlative rights and obligations under the Corporation Code and the Finance and Administration created by Matling’s President pursuant to By Law
internal and intra-corporate regulatory rules of the corporation. If the 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 since Respondent Esguerra filed on December 12, 1989 with the RTC, Malolos,
Coros is a member of Matling’s Board of Directors and a corporate office, the Bulacan, an action to annul the Free Patent in the name of de Guzman. Esguerra
issue is an intra-corporate controversy. As such, jurisdiction lies with the claimed that he was the owner of the subject land with an approximate area of
Securities and Exchange Commission (SEC). 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 RTC
not own a single share of stock. Even assuming that he had been a Director of dismissed Esguerra’s complaint but on appeal, the CA reversed. The Supreme
Matling, he had been removed as the Vice President for Finance and Court in its Decision dated December 27, 2002 affirmed the CA’s decision. After
Administration, not as a Director, a fact that the notice of his termination dated attaining finality, the case was remanded to the RTC for execution.
April 10, 2000 showed. Now, herein petitioners (heirs of Esguerra), filed an Omnibus Motion with the
RTC, manifesting that the Court’s December 27, 2002 decision has yet to be
Labor Arbiter (LA) ruled in favor of Matling. On appeal, the NLRC reversed the executed. HOLCIM filed a motion for reconsideration alleging that it did not owe
decision of the LA and ruled that the case is cognizable by the LA. Matling any amount of royalty to the petitioners for the extracted limestone from the
appealed to the CA through a petition for certiorari which the CA dismissed as subject land. It also filed a Manifestation and Motion for Ocular Inspection to
well. prove that it did not extract limestone from the subject land. Despite all of this,
an alias writ of execution and notices of garnishment on several banks against
ISSUE: Whether or not Coros was a corporate officer of Matling 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
RULING: As a rule, the illegal dismissal of an officer or other employee of a for Certiorari with Urgent Applications for Temporary Restraining Order and/or
private employer is properly cognizable by the LA Where the complaint for Writ of Preliminary Injunction with the CA. The CA granted the motion.
illegal dismissal concerns a corporate officer, however, the controversy falls
under the jurisdiction of the Securities and Exchange Commission (SEC), ISSUE: Whether the CA gravely erred in not dismissing HOLCIM's petition for
because the controversy arises out of intra-corporate or partnership relations. certiorari on the ground of lack of Board Resolution authorizing the filing of
petition.
The petitioners argue that the power to create corporate offices and to appoint the
individuals to assume the offices was delegated by Matling’s Board of Directors RULING: The general rule is that a corporation can only exercise its powers and
to its President through By-Law No. V, as amended; and that any office the transact its business through its board of directors and through its officers and
agents when authorized by a board resolution or its bylaws. The power of a stockholders. Equity recognizes that stockholders are the proprietors of the
corporation to sue and be sued is exercised by the board of directors. The physical corporate interests and are ultimately the only beneficiaries thereof
acts of the corporation, like the signing of documents, can be performed only by
natural persons duly authorized for the purpose by corporate bylaws or by a It is obviously to prevent the creation of an opportunity for an officer or director
specific act of the board. Absent the said board resolution, a petition may not be of San Miguel Corporation, who is also the officer or owner of a competing
given due course. corporation, from taking advantage of the information which he acquires as
director to promote his individual or corporate interests to the prejudice of San
In the case at bar, HOLCIM attached to its Petition for Certiorari before the CA Miguel Corporation and its stockholders, that the questioned amendment of the
a Secretary’s Certificate authorizing Mr. Paul M. O’Callaghan (O’Callaghan), its by-laws was made.
Chief Operating Officer, to nominate, designate and appoint the corporation’s
authorized representative in court hearings and conferences and the signing of Certainly, where two corporations are competitive in a substantial sense, it would
court pleadings. It also attached the Special Power of Attorney dated June 9, seem improbable, if not impossible, for the director, if he were to discharge
2006, signed by O’Callaghan, appointing Sycip Salazar Hernandez & Gatmaitan effectively his duty, to satisfy his loyalty to both corporations and place the
and/or any of its lawyers to represent HOLCIM; and consequently, the performance of his corporation duties above his personal concerns.
Verification and Certification of Non Forum Shopping signed by the authorized
representative. To be sure, HOLCIM, in its Reply filed in the CA, attached 13. GD Express Worldwide NV v. CA, G.R. No. 136978, May 8, 2009
another Secretary’s Certificate, designating and confirming O’Callaghan’s
power to authorize Sycip Salazar Hernandez & Gatmaitan and/or any of its Petitioner GD Express Worldwide N.V. (GD Express) is a corporation duly
lawyers to file for and on behalf of HOLCIM, the pertinent civil and/or criminal organized and existing under the laws of the Netherlands. On 27 September 1990,
actions pending before the RTC. its predecessor-in-interest, TNT Limited (TNT) entered into a joint venture
agreement with Philippine Aerospace Development Corporation (PADC) for the
The foregoing convinces the Court that the CA did not err in admitting establishment of a domestic corporation as their corporate vehicle to operate as
HOLCIM’s petition before it. HOLCIM attached all the necessary documents an international air freight carrier. The joint venture agreements stipulated that
for the filing of a petition for certiorari before the CA. Indeed, there was no PADC would own 80% of the shares of stock of the corporate vehicle while TNT
complete failure to attach a Certificate of Non-Forum Shopping. In fact, there would own the remaining 20%.
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 The agreements essentially laid down the relationship between TNT and PADC
dated July 17, 2006, thus proving that O’Callaghan had the authority from the and the management, control and existence of the corporation. Also, pursuant to
board of directors to appoint the counsel to represent them. The Court recognizes the joint venture agreements, PADC and TNT registered with the SEC a
the compliance made by HOLCIM in good faith since after the petitioners corporation to be known as Air Philippines Corporation (APC).
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. Subsequently, on 11 December 1992, APC amended its articles of incorporation
to change its corporate name to Pacific East Asia Cargo Airlines, Inc. (PEAC).
12. Gokongwei, Jr. v. SEC, G.R. No. L-45911, April 11, 1979 On 02 April 1993, TNT transferred all its shares in PEAC to petitioner GD
Express. PEAC immediately commenced operations. Herein petitioner Amihan
Gokonwei alleged that on September 18, 1976, individual respondents amended Management Services, Inc. (Amihan), a domestic corporation, was contracted to
by bylaws of San Miguel Corporation, basing their authority to do so on a undertake the daily operations in PEAC pursuant to the joint venture agreement.
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 Sometime in 1994, the Office of the President mandated the Committee on
P100.00 per share. At the time of the amendment, the outstanding and paid up Privatization to require the Asset Privatization Trust (APT) to dispose of PADC’s
shares totalled 30,127,043, with a total par value of P301,270,430.00. It was 80% share in PEAC. Thus, petitioner GD Express and PADC executed the Terms
contended that according to section 22 of the Corporation Law and Article VIII of Reference that would govern the disposition of PADC’s equity comprising
of the by-laws of the corporation, the power to amend, modify, repeal or adopt 12,800 subscribed shares of stock in PEAC.
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 ISSUE: Whether an intra-corporate dispute is exclusively cognizable by the SEC
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 RULING: NO. The designation of certain RTC branches to handle specific cases
was based on the 1961 authorization, petitioner contended that the Board acted is nothing new. For instance, pursuant to the provisions of the R.A. No. 6657 or
without authority and in usurpation of the power of the stockholders. 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.
It was claimed that prior to the questioned amendment, petitioner had all the No. 6657.
qualifications to be a director of respondent corporation, being a substantial
stockholder thereof; that as a stockholder, petitioner had acquired rights inherent The RTC exercising jurisdiction over an intra-corporate dispute can be likened
in stock ownership, such as the rights to vote and to be voted upon in the election to an RTC exercising its probate jurisdiction or sitting as a special agrarian court.
of directors; and that in amending the by-laws, respondents purposely provided The designation of the SCCs as such has not in any way limited their jurisdiction
for petitioner's disqualification and deprived him of his vested right as afore- to hear and decide cases of all nature, whether civil, criminal or special
mentioned, hence the amended by-laws are null and void. proceedings.

ISSUE: Whether SMC’s BoD acted in bad faith in making the amendment which Incidentally, not all the prayers and reliefs sought by respondent Filchart in SEC
disqualified Gokongwei from being elected as Director. Case No. 08-97-5746 can be characterized as intra-corporate in nature. For
instance, respondent Filchart’s petition does not allege that the cause of action
RULING: NO. SMC is merely protecting its interest from Gokongwei, who for the nullification of the management contract between PEAC and petitioner
owns companies in direct competition with SMC’s business. Although in the Amihan is being instituted as a derivative suit. It is an ordinary action for the
strict and technical sense, directors of a private corporation are not regarded as nullification of a contract, which is cognizable by courts of general jurisdiction.
trustees, there cannot be any doubt that their character is that of a fiduciary
insofar as the corporation and the stockholders as a body are concerned. As 14. LBP v. Ascot Holdings & Equities, Inc., G.R. No. 175163, October
agents entrusted with the management of the corporation for the collective 19, 2007
benefit of the stockholders, they occupy a fiduciary relation, and in this sense the
relation is one of trust. It springs from the fact that directors have the control and After the Philippine Airlines (PAL) was privatized, Land Bank purchased from
guidance of corporate affairs and property; hence of the property interests of the the National Government PAL shares. Minority stockholders in PR Holdings
filed a case with the Securities and Exchange Commission (SEC), seeking the
distribution of PR Holdings’ shares of stock in PAL to its stockholders in
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
respondents and the latter are obligated to buy the same at Five Pesos (P5.00) per
share on the sixth year after the effectivity of the Stockholders’ Agreement.
Instead of honoring the Stockholders' Agreement, respondents filed with the
RTC of Makati a complaint against Land Bank, PNB, DBP, GSIS, AFP-RSBS
and the Republic of the Philippines, praying that they be released from the
obligation to buy the PAL shares of petitioner and other defendants therein at
P5.00 per share, as earlier agreed upon under the Stockholders' Agreement, on
ground of alleged radical change in the conditions prevailing at the time the said
agreement was entered and the present. Trial court ruled in favor of the
respondents. Trial court denied Land Bank's motion for reconsideration.
Therefrom, Land Bank decided to go to the CA on a petition for review. For the
purpose, it filed with the CA, a motion for extension of time to file the intended
petition for review. The motion was denied by the CA.
In January 2001, Marubeni assigned its entire credit to Radstock Securities
Limited (Radstock), a foreign corporation. Radstock immediately sent a notice
and demand letter to PNCC.
PNCC and Radstock entered into a Compromise Agreement. Under this
agreement, PNCC shall pay Radstock the reduced amount of P6,185,000,000.00
in full settlement of PNCC’s guarantee of CDCP Mining’s debt allegedly totaling
P17,040,843,968.00 (judgment debt as of 31 July 2006). To satisfy its reduced
obligation, PNCC undertakes to (1) "assign to a third party assignee to be
designated by Radstock all its rights and interests" to the listed real properties of
PNCC; (2) issue to Radstock or its assignee common shares of the capital stock
of PNCC issued at par value which shall comprise 20% of the outstanding capital
stock of PNCC; and (3) assign to Radstock or its assignee 50% of PNCC’s 6%
share, for the next 27 years, in the gross toll revenues of the Manila North
Tollways Corporation.
Luis Sison, a stockholder and former PNCC President and Chairman, filed a
derivative suit questioning the legality of the compromise agreement.

ISSUE: Whether the filing of a motion for reconsideration before the trial court ISSUE: Whether Sison’s derivative suit is valid
toll the reglementary period to appeal the judgment
RULING: YES. Sison has legal standing to challenge the Compromise
RULING: No. It is beyond quibbling that the assailed “Judgment” in Civil Case Agreement. Although there was no allegation that Sison filed the case as a
was issued by the RTC in the exercise of its special jurisdiction over intra- derivative suit in the name of PNCC, it could be fairly deduced that Sison was
corporate controversies under R.A. No. 8799. Civil Case was, therefore, assailing the Compromise Agreement as a stockholder of PNCC.
governed by the Interim Rules of Corporate Rehabilitation and the Interim Rules
of Procedure Governing Intra- Corporate Controversies under R.A. No. 8799, as A derivative action is a suit by a stockholder to enforce a corporate cause of
well as A.M. No. 04- 9-07-SC of this Court prescribing the mode of appeal from action. Under the Corporation Code, where a corporation is an injured party, its
decisions of the RTC in intra-corporate controversies. power to sue is lodged with its board of directors or trustees. However, an
individual stockholder may file a derivative suit on behalf of the corporation to
Under Section 8(3), Rule 1 of the Interim Rules of Procedure Governing Intra- protect or vindicate corporate rights whenever the officials of the corporation
Corporate Controversies Under R.A. No. 8799, motion for new trial, or for refuse to sue, or are the ones to be sued, or hold control of the corporation. In
reconsideration of judgment or order, or for re- opening of trial are prohibited such actions, the corporation is the real party-in-interest while the suing
pleadings in said cases. Hence, the filing by petitioner of a motion for stockholder, on behalf of the corporation, is only a nominal party.
reconsideration before the trial court did not toll the reglementary period to
appeal the judgment via a petition for review under Rule 43 of the 1997 Rules of In this case, the PNCC Board cannot conceivably be expected to attack the
Civil Procedure, as amended. validity of the Compromise Agreement since the PNCC Board itself approved
the Compromise Agreement. In fact, the PNCC Board steadfastly defends the
As a consequence, the CA has no more jurisdiction to entertain the petition for Compromise Agreement for allegedly being advantageous to PNCC.
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

CCDCP Mining Corporation (CDCP Mining), an affiliate of CDCP, obtained

loans from Marubeni Corporation of Japan (Marubeni). A CDCP official issued
letters of guarantee for the loans although there was no CDCP Board Resolution
authorizing the issuance of such letters of guarantee. CDCP Mining secured the
Marubeni loans when CDCP and CDCP Mining were still privately owned and
managed.

In 1983, CDCP’s name was changed to Philippine National Construction

Corporation (PNCC) in order to reflect that the Government already owned
90.3% of PNCC and only 9.70% is under private ownership. Meanwhile, the
Marubeni loans to CDCP Mining remained unpaid.

On 20 October 2000 and 22 November 2000, the PNCC Board of Directors

(PNCC Board) passed Board Resolutions admitting PNCC’s liability to
Marubeni. Previously, for two decades the PNCC Board consistently refused to
admit any liability for the Marubeni loans.