MARC II v JOSON (Corporate officers)

Explanation:

Corporate officers are the President, Secretary, Treasurer, and other such officers as the by-laws
may provide. The position of general manager, however, is not one of those listed in Section 25
of the Corporation Code, neither is it mentioned in the by laws as being included in the
enumeration of those who are corporate officers. The fact that the by-laws of Marc II enabled the
creation of the office of the general manager, which Joson occupied, this does not by itself render
him a corporate officer. The simple fact is that the position of general manager, while its creation
was enabled by the by-laws, was not enumerated therein as a corporate officer and without an
amendment of the bylaws to that effect, Joson’s position was merely that of an employee, not a
corporate officer.

Facts

Before Marc II was officially incorporated, Joson has already been engaged by Marc Marketing
Inc., in her capacity as President, to work as the General Manager of Marc II. Subsequentlty
Marc II was officially incorporated and registered with the SEC. Accordingly, Marc Marketing,
Inc. was made non-operational. Respondent continued to discharge his duties as General
Manager but this time under petitioner corporation.

Marc II’s Board of Directors conducted a meeting where Joson was appointed as one of its
corporate officers with the designation or title of General Manager to function as a managing
director with other duties and responsibilities that the Board of Directors may provide

However, on 30 June 1997, Marc II decided to stop and cease its operations due to poor sales
collection aggravated by the inefficient management. On the same date, it formally informed
respondent of the cessation of its business operation.

Feeling aggrieved, respondent filed a Complaint for Reinstatement and Money Claim against
petitioners before the Labor Arbiter. Labor Arbiter rendered his Decision in favor of respondent.
Aggrieved, petitioners appealed the aforesaid Labor Arbiters Decision to the NLRC.

NLRC ruled in favor of petitioners by giving credence to the Secretarys Certificate, which
evidenced petitioner corporations Board of Directors meeting in which a resolution was
approved appointing respondent as its corporate officer with designation as General Manager.
Therefrom, the NLRC reversed and set aside the Labor Arbiters Decision and dismissed
respondents Complaint for want of jurisdiction.
When respondents Motion for Reconsideration was denied, he filed a Petition for Certiorari with
the Court of Appeals ascribing grave abuse of discretion on the part of the NLRC. Court of
Appeals rendered its now assailed Decision declaring that the Labor Arbiter has jurisdiction over
the present controversy. It upheld the finding of the Labor Arbiter that respondent was a mere
employee of petitioner corporation, who has been illegally dismissed from employment without
valid cause and without due process.

Issue

Whether or not respondent was a mere employee of petitioner corporation, who has been
illegally dismissed from employment without valid cause and without due process.

HELD: Employee, not a corporate officer

The corporate officers in the context of PD No. 902-A are exclusively those who are given that
character either by the Corporation Code or by the corporations [b]y[l]aws.

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.

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. The enabling clause in petitioner corporations by-laws empowering its Board of Directors
to create additional officers, i.e., General Manager, and the alleged subsequent passage of a
board resolution to that effect cannot make such position a corporate office. Matling clearly
enunciated that the board of directors has no power to create other corporate offices without first
amending the corporate by-laws so as to include therein the newly created corporate office.
PAZ v NIEU (Ostensible Corporation)

Explanation

A reading of the MOA is evidence of the fact that Paz was dealing with NIEU, the
company, not Captain Allan Clarke personally. The repeated use of the word “company”
in the contract is evidence of petitioner’s acknowledgement of the existence of the
corporation. Therefore, he can no longer claim that he was dealing with Clarke
personally, as he was clearly entering into a contract with NIEU. One who assumes an
obligation to an ostensible corporation cannot then claim that no such corporation
existed.

Facts

Priscillo Paz as the officer-in-charge of the Aircraft Hangar at the Davao International
Airport, Davao City MOA with Captain Allan J. Clarke President of International
Environmental University, whereby for a period of four (4) years, unless pre-terminated
by both parties with six (6) months advance notice, the former shall allow the latter to
use the aircraft hangar space at the said Airport "exclusively for company
aircraft/helicopter."

On August 19, 2000, Paz complained in a letter that the hangar space was being used
"for trucks and equipment, vehicles maintenance and fabrication," instead of for
"company helicopter/aircraft" only, and thereby threatened to cancel the MOA, his
letter, and request were ignored compelling him to write three more times each time
the complaints were unheeded, until finally he demanded that NIEU immediately
vacate the hangar space.

On September 4, 2002, NIEU filed a complaint against petitioner for breach of contract

claiming that:

(a) petitioner had disconnected its electric and telephone lines;

(b) upon petitioner's instruction, security guards prevented its employees from entering
the leased premises by blocking the hangar space with barbed wire; and

(c) petitioner violated the terms of the MOA when he took over the hangar space
without giving respondent the requisite six (6)-month advance notice of termination

In his defense, petitioner alleged, among others, that:

(a) respondent had no cause of action against him as the MOA was executed
between him and Capt. Clarke in the latter's personal capacity;

(b) there was no need to wait for the expiration of the MOA because Capt. Clarke
performed highly risky works in the leased premises that endangered other aircrafts
within the vicinity; and

(c) the six (6)-month advance notice of termination was already given in the letters he
sent to Capt. Clarke.
Issue: W/ON Paz is estopped from questioning the personality of NIEU

RULING

From the very language itself of the MOA entered into by petitioner whereby he
obligated himself to allow the use of the hangar space
"for company aircraft/helicopter," petitioner cannot deny that he contracted with NIEU
NOT Captain Clarke.

Section 21 of the Corporation Code explicitly provides that one who assumes an
obligation to an ostensible corporation, as such, cannot resist performance thereof on
the ground that there was in fact no corporation.

If it were true that respondent was violating the terms and conditions of the lease,
"[petitioner] should have gone to court to make the [former] refrain from its 'illegal'
activities or seek rescission of the [MOA], rather than taking the law into his own
hands."