Topic Title Truth Thought Test

Topic Title

Corporation Law; Board of Directors; Can a member be ineligible for election as director, by being a competitor? Gocongwei vs. SEC, 89 SCRA 33; G.R. No. L-52129 April 21, 1980; ANTONIO, J.

Truth Thought It is well-settled that findings of fact of administrative bodies will not be interferred with by the courts in the absence of grave abuse of discretion on the part of said agencies, or unless the afore-mentioned findings are not supported by substantial evidence (Central Bank V. Cloribel, 44 SCRA 307 [1972]). The order of respondent Commission was based principally on the affidavits of Test Nazario Avendao, Ruperto Sarandi, Jr., Fernando Constantino, Jose Picornell and Mabini Antonio and documentary evidence showing that petitioner is engaged in agricultural and poultry business competitive with that of San Miguel Corporation.

Topic Title Truth Thought

Clearly, therefore , the prohibition with respect to granting compensation to corporate directors/trustees as such under Section 30 is not violated in this particular case. Consequently, the last sentence of Section 30 does not likewise find application in this case since the compensation is being given to private respondents in their capacity as officers of WIT and not as board members.

Test http://sc.judiciary.gov.ph/jurisprudence/1997/aug1997/113032.htm Topic Title Does a labor arbiter has jurisdiction

[G.R. No. 144767. March 21, 2002]

DILY DANY NACPIL, petitioner, vs. INTERNATIONAL BROADCASTING

CORPORATION KAPUNAN, J.: Truth Petitioner, a bylaws officer filed with the Labor Arbiter a complaint for illegal dismissal and non-payment of benefits. Thought As petitioners appointment as comptroller required the approval and formal action of the IBCs Board of Directors to become valid,[17] it is clear therefore holds that petitioner is a corporate officer whose dismissal may be the subject of a controversy cognizable by the SEC under Section 5(c) of P.D. 902-A which includes controversies involving both election and appointment of corporate directors, trustees, officers, and managers.[18] Had petitioner been an ordinary employee, such board action would not have been required. Test http://sc.judiciary.gov.ph/jurisprudence/2002/mar2002/144767.htm Topic Title Truth Thought Contracts entered into by a corporate president without express prior board approval bind the corporation, when such officers apparent authority is established and when these contracts are ratified by the corporation. private respondent should not be faulted for believing that Punsalans conformity to the contract in dispute was also binding on petitioner. It is familiar doctrine that if a corporation knowingly permits one of its officers, or any other agent, to act within the scope of an apparent authority, it holds him out to the public as possessing the power to do those acts; and thus, the corporation will, as against anyone who has in good faith dealt with it through such agent, be estopped from denying the agents authority. Francisco v. Government Service Insurance System, 7 SCRA 577, 583, March 30, 1963; Maharlika Publishing Corporation v. Tagle, 142 SCRA 553, 566, July 9, 1986 Test http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/117847.htm#_ednref30 Topic Title Is the "dealership agreement" referred by the President and Chairman of the Board of petitioner corporation is a valid and enforceable contract? Prime White Cement vs. IAC, 220 SCRA 103, G.R. No. L-68555 March 19, 1993 CAMPOS, JR., J.:

Truth Thought As director, specially since he was the other party in interest, respondent Te's bounden duty was to act in such manner as not to unduly prejudice the corporation. In the light of the circumstances of this case, it is to Us quite clear that he was guilty of disloyalty to the corporation; he was attempting in effect, to enrich himself at the expense of the corporation. There is no showing that the stockholders ratified the "dealership agreement" or that they were fully

aware of its provisions. The contract was therefore not valid and this Court cannot allow him to reap the fruits of his disloyalty. Test http://www.lawphil.net/judjuris/juri1993/mar1993/gr_68555_1993.html Topic Title Truth Thought It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality. Petitioner Sunio, therefore, should not have been made personally answerable for the payment of private respondents back salaries. Sunio vs. National Labor Relations Commission It is not even shown that petitioner has had a direct hand in the dismissal of Test private respondent enough to attribute to him (petitioner) a patently unlawful act while acting for the corporation. Neither can Article 289[30] of the Labor Code be applied since this law specifically refers only to the imposition of penalties under the Code. It is undisputed that the termination of petitioners employment has, instead, been due, collectively, to the need for a further mitigation of losses, the onset of the rainy season, the insurgency problem in Sorsogon and the lack of funds to further support the mining operation in Gatbo. http://sc.judiciary.gov.ph/jurisprudence/1996/mar1996/101699.htm Topic Title Is the corporate officer personally liable? G.R. No. 159795 July 30, 2004 SPOUSES ROBERTO & EVELYN DAVID and COORDINATED GROUP, INC., petitioners, vs. CONSTRUCTION INDUSTRY AND ARBITRATION COMMISSION and SPS. NARCISO & AIDA QUIAMBAO,respondents.

DECISION

PUNO, J.:

Truth Thought

Test

As a general rule, the officers of a corporation are not personally liable for their official acts unless it is shown that they have exceeded their authority. However, the personal liability of a corporate director, trustee or officer, along with corporation, may so validly attach when he assents to a patently unlawful act of the corporation or for bad faith or gross negligence in directing its affairs. When asked whether the Building was underdesigned considering the poor quality of the soil, Engr. Villasenor defended his structural design as adequate. He admitted that the revision of the plans which resulted in the construction of additional columns was in pursuance of the request of Engr. David to revise the structural plans to provide for a significant reduction of the cost of construction. When Engr. David was asked for the justification for the revision of the plans, he confirmed that he wanted to reduce the cost of construction. x x x" (emphases supplied)11

http://www.lawphil.net/judjuris/juri2004/jul2004/gr_159795_2004.html Topic Title Truth Thought

In labor cases, particularly, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of corporate employees done with malice or in bad faith.[19] Bad faith or negligence is a question of fact and is evidentiary.[20] It has been held that bad faith does not connote bad judgement or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty thru some motive or interest or ill will; it partakes of the nature of fraud.[21] In the instant case, there is nothing substantial on record to show that respondent officers acted in patent bad faith or were guilty of gross negligence in terminating the services of petitioners so as to warrant personal liability. In Claparols vs. Court of Industrial Relations, 65 SCRA 613, cited in Del Rosario vs. NLRC 187 SCRA 777 the Claparol Steel and Nail Plant which was ordered to pay its workers backwages, ceased operations on June 30, 1957 and was succeeded on the next day, July 1, 1957 by the Claparols Steel Corporation. Both corporations were substantially owned and controlled by the same person and there was no break or cessation in operations. Moreover, all the assets of the steel and nail plant were transferred to the new corporation. Notably, in the above-mentioned cases, a new corporation was created, owned by the same family, engaged in the same business and operating in the same compound, a situation which is not obtaining in the instant case. In AC Ransom Labor Union-CCLU vs. NLRC,[28] the Court ruled that under the

Minimum Wage Law, the responsible officer of an employer corporation can be held personally liable for non-payment of backwages for if the policy of the law were otherwise, the corporation employer would have devious ways for evading of back wages. This Court said: In the instant case, it would appear that RANSOM, in 1969, foreseeing the possibility or probability of payment of backwages to the 22 strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased out if the 22 strikers win their case. RANSOM actually ceased operations on May 1, 1973, after the December 19, 1972 Decision of the Court of Industrial Relations was promulgated against RANSOM. Clearly, the situation in AC Ransom does not obtain in this case, where the alleged satellite companies were established even prior to the filing of petitioners complaint with the Department of Labor. Test http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/113907.htm Topic Title Is the act of the president binds the

[G.R. No. 125778. June 10, 2003]

INTER-ASIA INVESTMENTS INDUSTRIES, INC., petitioner, vs. COURT OF APPEALS and ASIA INDUSTRIES, INC., respondents. DECISION
CARPIO-MORALES, J.:

Truth Thought Being a juridical entity, a corporation may act through its board of directors, which exercises almost all corporate powers, lays down all corporate business policies and is responsible for the efficiency of management, as provided in Section 23 of the Corporation Code of the Philippines: SEC. 23. The Board of Directors or Trustees. - Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees x x x.

Under this provision, the power and responsibility to decide whether the corporation should enter into a contract that will bind the corporation is lodged in the board, subject to the articles of incorporation, bylaws, or relevant provisions of law. However, just as a natural person may authorize another to do certain acts for and on his behalf, the board of directors may validly delegate some of its functions and powers to officers, committees or agents. The authority of such individuals to bind the corporation is generally derived from law, corporate bylaws or authorization from the board, either expressly or impliedly by habit, custom or acquiescence in the general course of business, viz: A corporate officer or agent may represent and bind the corporation in transactions with third persons to the extent that [the] authority to do so has been conferred upon him, and this includes powers as, in the usual course of the particular business, are incidental to, or may be implied from, the powers intentionally conferred, powers added by custom and usage, as usually pertaining to the particular officer or agent, and such apparent powers as the corporation has caused person dealing with the officer or agent to believe that it has conferred.

Test

Petitioner argues that the January 24, 1980 letter-proposal (for the reduction of private respondents claim for refund upon petitioners promise to pay the cost of NOCOSII superstructures in the amount of P759,570.00) which was signed by its president has no legal force and effect against it as it was not authorized by its board of directors, it citing the COrporation Law which provides that unless the act of the president is authorized by the board of directors, the same is not binding on it

http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125778.htm