Professional Documents
Culture Documents
following acts inimical to the interests of Broadcom.Furthermore, they contended that Cosare
abandoned his job by continually failing to report for work beginning April 1, 2009, prompting
them to issue on April 14, 2009 a memorandumaccusing Cosare of absence without leave
beginning April 1, 2009.
The Labor Arbiter dismissed the complaint on the ground of Cosares failure to establish that he
was constructively dismissed.
Cosare appealed the LA decision to the NLRC. It reversed the LA decision.
The respondents motion for reconsideration was denied.Dissatisfied, they filed a petition for
certiorari with the CA on the issues of constructive dismissal and intra-corporate controversy
which was within the jurisdiction of the RTC, instead of the LA. They argued that the case
involved a complaint against a corporation filed by a stockholder, who, at the same time, was a
corporate officer.
The CAgranted the respondents petition. It agreed with the respondents contention that the case
involved an intra-corporate controversy which, pursuant to Presidential Decree No. 902-A, as
amended, was within the exclusive jurisdiction of the RTC.
Hence, this petition filed by Cosare.
ISSUES: (1) Whether or not the case instituted by Cosare was an intra-corporate dispute that
was within the original jurisdiction of the RTC, and not of the LAs;
(2) Whether or not Cosare was constructively and illegally dismissed from employment by the
respondents.
HELD: The petition is impressed with merit.
LABOR LAW - Jurisdiction
An intra-corporate controversy, which falls within the jurisdiction of regular courts, has been
regarded in its broad sense to pertain to disputes that involve any of the following relationships:
(1) between the corporation, partnership or association and the public; (2) between the
corporation, partnership or association and the state in so far as its franchise, permit or license to
operate is concerned; (3) between the corporation, partnership or association and its
stockholders, partners, members or officers; and (4) among the stockholders, partners or
associates, themselves.Settled jurisprudence, however, qualifies that when the dispute involves a
charge of illegal dismissal, the action may fall under the jurisdiction of the LAs upon whose
jurisdiction, as a rule, falls termination disputes and claims for damages arising from employeremployee relations as provided in Article 217 of the Labor Code. Consistent with this
jurisprudence, the mere fact that Cosare was a stockholder and an officer of Broadcom at the
time the subject controversy developed failed to necessarily make the case an intra-corporate
dispute.
In Matling Industrial and Commercial Corporation v. Coros,the Court distinguished between a
"regular employee" and a "corporate officer" for purposes of establishing the true nature of a
dispute or complaint for illegal dismissal and determining which body has jurisdiction over it.
Succinctly, it was explained that "[t]he determination of whether the dismissed officer was a
regular employee or corporate officer unravels the conundrum" of whether a complaint for illegal
dismissal is cognizable by the LA or by the RTC. "In case of the regular employee, the LA has
jurisdiction; otherwise, the RTC exercises the legal authority to adjudicate.
Applying the foregoing to the present case, the LA had the original jurisdiction over the
complaint for illegal dismissal because Cosare, although an officer of Broadcom for being its
AVP for Sales, was not a "corporate officer" as the term is defined by law.
MERCANTILE LAW Corporate officers
There are three specific officers whom a corporation must have under Section 25 of the
Corporation Code. These are the president, secretary and the treasurer. The number of officers is
not limited to these three. A corporation may have such other officers as may be provided for by
its by-laws like, but not limited to, the vice-president, cashier, auditor or general manager. The
number of corporate officers is thus limited by law and by the corporations by-laws.
In Tabang v. NLRC, the Court also made the following pronouncement on the nature of
corporate offices: there are two circumstances which must concur in order for an individual to be
considered a corporate officer, as against an ordinary employee or officer, namely: (1) the
creation of the position is under the corporations charter or by-laws; and (2) the election of the
officer is by the directors or stockholders. It is only when the officer claiming to have been
illegally dismissed is classified as such corporate officer that the issue is deemed an intracorporate dispute which falls within the jurisdiction of the trial courts.
The Court disagrees with the respondents and the CA. The only officers who are specifically
listed, and thus with offices that are created under Broadcoms by-laws are the following: the
President, Vice-President, Treasurer and Secretary. Although a blanket authority provides for the
Boards appointment of such other officers as it may deem necessary and proper, the respondents
failed to sufficiently establish that the position of AVP for Sales was created by virtue of an act of
Broadcoms board, and that Cosare was specifically elected or appointed to such position by the
directors. No board resolutions to establish such facts form part of the case records.
The CAs heavy reliance on the contents of the General Information Sheets, which were
submitted by the respondents during the appeal proceedings and which plainly provided that
Cosare was an "officer" of Broadcom, was clearly misplaced. The said documents could neither
govern nor establish the nature of the office held by Cosare and his appointment thereto.
Finally, the mere fact that Cosare was a stockholder of Broadcom at the time of the cases filing
did not necessarily make the action an intra-corporate controversy. Not all conflicts between the
stockholders and the corporation are classified as intra-corporate. There are other facts to
consider in determining whether the dispute involves corporate matters as to consider them as
intra-corporate controversies.
Commission, as the administrative agency tasked with among others the function of registering
and administering corporations, is given great weight and accorded high respect. Moreover, by
their own admission contained in the various pleadings which they have filed in the different
stages of this case, Vesagas and Asis themselves have considered the club as a corporation.
Otherwise, there is no cogency in spearheading the move for its dissolution. Vesagas and Asis
were therefore well aware of the incorporation of the club and even agreed to get elected and
serve as its responsible officers before they reconsidered dissolving its corporate form. On the
other hand, at the time of the institution of the case with the SEC, the club was not dissolved by
virtue of an alleged Board resolution. The Corporation Code establishes the procedure and other
formal requirements a corporation needs to follow in case it elects to dissolve and terminate its
structure voluntarily and where no rights of creditors may possibly be prejudiced. Section 118
(Voluntary dissolution where no creditors are affected) of the Corporation Code provides that "If
dissolution of a corporation does not prejudice the rights of any creditor having a claim against
it, the dissolution may be effected by majority vote of the board of directors or trustees and by a
resolution duly adopted by the affirmative vote of the stockholders owning at least two-thirds
(2/3) of the outstanding capital stock or at least two-thirds (2/3) of the members at a meeting to
be held upon call of the directors or trustees after publication of the notice of time, place and
object of the meeting for three (3) consecutive weeks in a newspaper published in the place
where the principal office of said corporation is located; and if no newspaper is published in such
place, then in a newspaper of general circulation in the Philippines, after sending such notice to
each stockholder or member either by registered mail or by personal delivery at least 30 days
prior to said meeting. A copy of the resolution authorizing the dissolution shall be certified by a
majority of the board of directors or trustees and countersigned by the secretary of the
corporation. The Securities and Exchange Commission shall thereupon issue the certificate of
dissolution." To substantiate their claim of dissolution, Vesagas and Asis submitted only two
relevant documents: the Minutes of the First Board Meeting held on 5 January 1997, and the
board resolution issued on 14 April 1997 which declared "to continue to consider the club as a
non-registered or a non-corporate entity and just a social association of respectable and
respecting individual members who have associated themselves, since the 1970's, for the purpose
of playing the sports of tennis." These two documents will not suffice. The requirements
mandated by the Corporation Code should have been strictly complied with by the members of
the club. The records reveal that no proof was offered by Vesagas and Asis with regard to the
notice and publication requirements. Similarly wanting is the proof of the board members'
certification. Lastly, and most important of all, the SEC Order of Dissolution was never
submitted as evidence