Corporate Law Case Write-up
Wesleyan University-Phils v Maglaya, Sr
I. Facts of the case
The case revolves around the jurisdiction of the National Labor
Relations Commission over the dismissal of the former president of
Wesleyan University-Philippines (WUP) Maglaya, Sr (Maglaya).
Maglaya was appointed as a corporate member and was elected as a
member of the Board of Trustees of WUP. He was later elected as the
President of the University.
The Bishops of the United Methodist Church, which managed the
WUP, in accordance with the by-laws of the WUP, notified the existing
corporate members of the Board of Trustees of the expiration of their terms.
Later, all members of the existing Board were replaced with a new set of
corporate officers and the new Board subsequently terminated the term of
Maglaya as president.
An illegal dismissal case was filed by Maglaya against WUP. The
Labor Arbiter ruled in favor of WUP, but the decision was reversed by the
NLRC. WUP now contests the decision, asserting that NLRC had no
jurisdiction over the matter as it was an intra-corporate dispute, the
jurisdiction of which should belong to the regular courts.
II. Issue/s
Whether Maglaya is a corporate officer or an employee? Corporate
officer
Whether NLRC has jurisdiction over the dispute? No jurisdiction.
III. Held
Corporate Officers
For purposes of identifying an intra-corporate controversy, the Court has
defined corporate officers, thus:
“Corporate officers” in the context of PD 902-A are those officers of
the corporation who are given that character by the Corporation
Code or by the corporation’s by-laws. 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
G.R. NO: 212774
ARTICLE; TOPIC OF CASE: Board of Directors, intra-corporate disputes
VOL [January 23, 2017]
Wesleyan University-Phils v Maglaya, Sr
not limited to, the vice-president, cashier, auditor, or general manager.
The number of corporate officers is thus limited by law and by the
corporation’s by-laws.
This Court expounded that an “office” is created by the charter of the
corporation and the officer is elected by the directors or stockholders,
while an “employee” usually occupies no office and generally is
employed not by 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. That is, the creation of the
position under the charter or by-laws and that the election of the officer is
by the directors or stockholders must concur in order for an individual to
be considered a corporate officer, as against an ordinary employee or
officer. It is only when the officer claiming to have been illegally
dismissed is classified as such officer that the issue is deemed an
intra-corporate dispute which fails within the jurisdiction of the trial
courts.
It is apparent from the by-laws of WUP that the president was one of the
officers of the corporation and that he was appointed to such position by the
Board, and not by a managing officer of the corporation. He is a corporate
officer and not a mere employee. The alleged “appointment” instead of
“election” as provided by the by-laws neither convert the president to a
mere employee. With the office specifically mentioned in the by-laws, the
NLRC erred in taking cognizance of the case. [Note: important part for the
critic]
Jurisdiction over controversies involving dismissal of corporate officers
A corporate officer’s dismissal is always a corporate act or an intra-
corporate controversy which arises between a stockholder and a
corporation, and the nature is not altered by the reason or wisdom with
which the Board of Directors may have in taking such action. The issue of
the alleged termination involving a corporate officer, not a mere employee,
in not a simple labor problem but a matter that comes within the area of
corporate affairs and management and is a corporate controversy in
contemplation of the Corporation Code.
To emphasize, the determination of the rights of a corporation officer
dismissed from his employment, as well as the corresponding liability
PONENTE: Peralta, J.
DIGEST MAKER: Josiah M Lim
 Corporate Law Case Write-up VOL [January 23, 2017]
Wesleyan University-Phils v Maglaya, Sr Wesleyan University-Phils v Maglaya, Sr

of a corporation, if any, is an intra-corporate dispute subject to the

jurisdiction of the regular courts.

Petition granted.

IV. Critic

The doctrine in the case should stand but it is no longer necessary to look
into the by-laws of a corporation for a president to be considered a
corporate officer. The legal basis for such stems from Section 24 of the
Revised Corporation Code, to wit:

SEC. 24. Corporate Officers. – Immediately after their election, the

directors of a corporation must formally organize and elect: (a) a
president, who must be a director; (b) a treasurer, who must be a
resident; (c) a secretary, who must be a citizen and resident of the
Philippines; and (d) such other officers as may be provided in the
bylaws. If the corporation is vested with public interest, the board
shall also elect a compliance officer. The same person may hold two
(2) or more positions concurrently, except that no one shall act as
president and secretary or as president and treasurer at the same time,
unless otherwise allowed in this Code. The officers shall manage the
corporation and perform such duties as may be provided in the bylaws
and/or as resolved by the board of directors.

As noted by Dean Villanueva in his Commentaries on the Revised

Corporation Code, the President, Corporate Secretary, and Treasurer are
deemed to be “corporate officers” even when not mentioned in the by-laws
since they have been expressly provided for in the RCC.

Applying the RCC to the case, then it is no longer necessary for the Court to
look into the by-laws of WUP to determine whether or not Maglaya is a
corporate officer. By nature of his position as the president of WUP, he is a
corporate officer and his dismissal involves an intra-corporate dispute,
which rightly falls within the jurisdiction of the regular courts.

G.R. NO: 212774 PONENTE: Peralta, J.

ARTICLE; TOPIC OF CASE: Board of Directors, intra-corporate disputes DIGEST MAKER: Josiah M Lim