Case # 6

Emile Justin Cebrian

Marc II Marketing, Inc., et al. vs. Alfredo Joson

G.R. No. 171993
December 12, 2011
FACTS: Petitioner Marc II Marketing, Inc. (Marc II) is a domestic corporation engaged in buying and
distributing household appliances, among others. It took over the operations of Marc Marketing, Inc.
(Marc), which was made non-operational following its incorporation and registration with the Securities
and Exchange Commission (SEC). Petitioner Lucila Joson (Lucila) is Marc II's President and majority
stockholder. She was also the former President and majority stockholder of the now-defunct Marc.
Before Marc II was officially incorporated, Alfredo Joson (Alfredo) had already been engaged by Lucila, in
her capacity as President of Marc to work as Marc II's general manager. Pending Marc II's incorporation,
Alfredo was designated as Marc's General Manager (Marc being in in the process of winding up at the
time). Later on, Marc II was officially incorporated, and Alfredo became its General Manager.
However, Marc II decided to cease its operations due to poor sales collection aggravated by inefficient
management of its affairs. Alfredo was then informed of the termination of his services since such would
no longer be necessary for the winding up of Marc II's affairs.
Aggrieved, Alfredo filed a complaint for reinstatement with the Labor Arbiter, who ruled against nowpetitioners on the ground that as Alfredo was no corporate officer under Marc II's by-laws, an employeremployee relationship subsisted. Petitioners appealed to the NLRC, which reversed the LA's decision,
ratiocinating that Alfredo was a corporate officer. The matter was brought before the Court of Appeals,
which affirmed the LA's decision of illegal dismissal.
ISSUE: Was Alfredo a corporate officer?
RULING: NO.
In Easycall Communications Phils., Inc. v. King, this Court held that in the context of Presidential Decree
No. 902-A, corporate officers are those officers of a corporation who are given that character either by the
Corporation Code or by the corporations by-laws. Section 25 of the Corporation Code specifically
enumerated who are these corporate officers, to wit: (1) president; (2) secretary; (3) treasurer; and (4)
such other officers as may be provided for in the by-laws. [...]
A careful perusal of petitioner corporations by-laws, particularly paragraph 1, Section 1, Article IV, would
explicitly reveal that its corporate officers are composed only of: (1) Chairman; (2) President; (3) one or
more Vice-President; (4) Treasurer; and (5) Secretary. The position of General Manager was not among
those enumerated.

Case # 29
Emile Justin Cebrian

Harpoon Marine Services, Inc., et al., vs. Fernan Francisco

G.R. No. 167751
March 2, 2011
FACTS: Petitioner Harpoon Marine Services, Inc. (Harpoon) originally hired respondent Fernan Francisco
(Fernan) as its Yard Supervisor, tasked to oversee and supervise all projects of the company. Later,
Fernan averred that he was unceremoniously dismissed by petitioner Jose Rosit (Jose), Harpoon's
President and CEO and filed an illegal dismissal case against Harpoon and Jose.
The Labor Arbiter held that Fernan was validly dismissed due to unjustified absences and tardiness, and
that same was done in compliance with due process requirements. The NLRC reversed the LA's findings,
ruling that Fernan's dismissal was illegal. The matter was brought before the CA, which affirmed the
NLRC's decision -- hence, this petition.
ISSUE: Should Jose be held solidarily liable with Harpoon?
RULING: NO.
As held in the case of MAM Realty Development Corporation v. National Labor Relations Commission,
"obligations incurred by [corporate officers], acting as such corporate agents, are not theirs but the direct
accountabilities of the corporation they represent." As such, they should not be generally held jointly and
solidarily liable with the corporation. The Court, however, cited circumstances when solidary liabilities may
be imposed, as exceptions:
1. When directors and trustees or, in appropriate cases, the officers of a corporation
(a) Vote for or assent to [patently] unlawful acts of the corporation;
(b) Act in bad faith or with gross negligence in directing the corporate affairs;
(c) Are guilty of conflict of interest to the prejudice of the corporation, its stockholders or
members, and other persons.
2. When the director or officer has consented to the issuance of watered stock or who, having
knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto.
3. When a director, trustee or officer has contractually agreed or stipulated to hold himself
personally and solidarily liable with the corporation.
4. When a director, trustee or officer is made, by specific provision of law, personally liable for his
corporate action.
The general rule is grounded on the theory that a corporation has a legal personality separate and distinct
from the persons comprising it. To warrant the piercing of the veil of corporate fiction, the officers bad
faith or wrongdoing "must be established clearly and convincingly" as "[b]ad faith is never presumed."
In the case at bench, the CAs basis for Joses liability was that he acted in bad faith when he approached
respondent and told him that the company could no longer afford his salary and that he will be paid
instead his separation pay and accrued commissions. This finding, however, could not substantially justify
the holding of any personal liability against Jose. The records are bereft of any other satisfactory evidence
that Jose acted in bad faith with gross or inexcusable negligence, or that he acted outside the scope of
his authority as company president.

Case # 52
Emile Justin Cebrian

Heirs of Fausto Ignacio vs. Home Bankers Savings and Trust Co.
G.R. No. 177783
January 23, 2013
FACTS: Petitioner Fausto Ignacio (Fausto) mortgaged two parcels of land to Home Savings Bank and
Trust Co., the predecessor of respondent Home Bankers Savings and Trust Company (Home Bankers),
as security for the loan extended to him. When Fausto defaulted in the payment of his loan, Home
Bankers proceeded to foreclose the mortgage. At the foreclosure sale, Home Bankers was the highest
bidder, and with Fausto's failure to redeem the properties within one year from registration, title to the
same was consolidated in Home Bankers' favor.
Despite the lapse of the redemption period and the subsequent consolidation of title, Fausto offered to
repurchase the properties. While Home Bankers considered the offer, there was no repurchase contract
executed. The present controversy was fueled by Fausto's stance that a verbal repurchase/compromise
agreement was actually reached and implemented by the parties.
The RTC found for Fausto, but the CA reversed -- hence, this petition.
ISSUE: Was there indeed a repurchase/compromise agreement?
RULING: NO.
Section 23 of the Corporation Code expressly provides that the corporate powers of all corporations shall
be exercised by the board of directors. Just as a natural person may authorize another to do certain acts
in his behalf, so may the board of directors of a corporation validly delegate some of its functions to
individual officers or agents appointed by it. Thus, contracts or acts of a corporation must be made either
by the board of directors or by a corporate agent duly authorized by the board. Absent such valid
delegation/authorization, the rule is that the declarations of an individual director relating to the affairs of
the corporation, but not in the course of, or connected with, the performance of authorized duties of such
director, are held not binding on the corporation.
Thus, a corporation can only execute its powers and transact its business through its Board of Directors
and through its officers and agents when authorized by a board resolution or its by-laws.
In the absence of conformity or acceptance by properly authorized bank officers of [Fausto's] counterproposal, no perfected repurchase contract was born out of the talks or negotiations between [Fausto and
certain persons, Mr. Fajardo and Mr. Lazaro]. [Fausto] therefore had no legal right to compel respondent
bank to accept the P600,000 being tendered by him as payment for the supposed balance of repurchase
price.