- This case reprises the jurisdictional conundrum of whether a complaint
for illegal dismissal is cognizable by the Labor Arbiter (LA) or by the
Regional Trial Court (RTC). The determination of whether the dismissed officer
was a regular employee or a corporate officer unravels the conundrum. In the
case of the regular employee, the LA has jurisdiction; otherwise, the RTC
exercises the legal authority to adjudicate.
- Where the complaint for illegal dismissal concerns a corporate officer,
however, the controversy falls under the jurisdiction of the Securities and Exchange
Commission (SEC), because the controversy arises out of intra-corporate or
partnership relations between and among stockholders, members, or associates,
or between any or all of them and the corporation, partnership, or association
of which they are stockholders, members, or associates, respectively; and
between such corporation, partnership, or association and the State insofar as
the controversy concerns their individual franchise or right to exist as such
entity; or because the controversy involves the election or appointment of a
director, trustee, officer, or manager of such corporation, partnership, or
association. Such controversy, among others, is known as an intra-corporate
dispute.
- Section 25. Corporate officers, quorum.--Immediately after
their election, the directors of a corporation must formally organize by the
election of a president, who shall be a director, a treasurer who may or may
not be a director, a secretary who shall be a resident and citizen of the
Philippines, and such other officers as may be provided for in the
by-laws. Any two (2) or more positions may be held concurrently by the same
person, except that no one shall act as president and secretary or as president
and treasurer at the same time.
The directors or
trustees and officers to be elected shall perform the duties enjoined on them
by law and the by-laws of the corporation. Unless the articles of incorporation
or the by-laws provide for a greater majority, a majority of the number of
directors or trustees as fixed in the articles of incorporation shall
constitute a quorum for the transaction of corporate business, and every
decision of at least a majority of the directors or trustees present at a
meeting at which there is a quorum shall be valid as a corporate act, except
for the election of officers which shall require the vote of a majority of all
the members of the board.
Directors or trustees
cannot attend or vote by proxy at board meetings.
Conformably with
Section 25, a position must be expressly mentioned in the By-Laws in order to
be considered as a corporate office. Thus, the creation of an office pursuant
to or under a By-Law enabling provision is not enough to make a position a
corporate office. Guerrea v. Lezama, the first ruling on the matter,
held that the only officers of a corporation were those given that character
either by the Corporation Code or by the By-Laws; the rest of the corporate
officers could be considered only as employees or subordinate officials. Thus,
it was held in Easycall Communications Phils., Inc. v. King:
An "office" is created by the charter
of the corporation and the officer is elected 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 but by the managing officer of
the corporation who also determines the compensation to be paid to such
employee.
- Thus, pursuant to the above provision (Section 25 of the Corporation
Code), whoever are the corporate officers enumerated in the by-laws are the
exclusive Officers of the corporation and the Board has no power to create
other Offices without amending first the corporate By-laws. However,
the Board may create appointive positions other than the positions of corporate
Officers, but the persons occupying such positions are not considered as
corporate officers within the meaning of Section 25 of the Corporation Code and
are not empowered to exercise the functions of the corporate Officers, except
those functions lawfully delegated to them. Their functions and duties are to
be determined by the Board of Directors/Trustees.
- The establishment of any of the relationships mentioned above will not
necessarily always confer jurisdiction over the dispute on the SEC to the
exclusion of regular courts. The statement made in one case that the rule
admits of no exceptions or distinctions is not that absolute. The better policy
in determining which body has jurisdiction over a case would be to consider not
only the status or relationship of the parties but also the nature of the
question that is the subject of their controversy.
- In order that the SEC (now the regular courts) can take cognizance of a
case, the controversy must pertain to any of the following relationships:
a) between the corporation,
partnership or association and the public;
b) between the
corporation, partnership or association and its stockholders, partners, members
or officers;
c) between the
corporation, partnership or association and the State as far as its franchise,
permit or license to operate is concerned; and
d) among the stockholders, partners or associates themselves.
(Matling Industrial and
Commercial Corporation vs. Coros, G.R. No. 157802, October 13, 2010, [Bersamin,
J.])
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