cases 39 onwards (full text)

7/23/2019 Cases 39 Onwards (Full Text)

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FIRST DIVISION

FILIPINAS PORT SERVICES, INC., represented bystockholders, ELIODORO C. CR! "nd#INDANAO TER#INAL AND $RO%ERA&ESERVICES, INC.,

Pet't'oners,

( )ers*s (

VICTORIANO S. &O, ARSENIO LOPE! C+A,ED&AR C. TRINIDAD, +ER#ENE&ILDO #.TRINIDAD, ESS S-$ICO, #AR- EAN D. CO,+ENR- C+A, OSELITO S. A-#E, ERNESTO S.A-#E, "nd ELIE!ER $. DE ESS,

Respondents.

&.R. No. /00/

Present:

PUNO, C.J., Chairperson,SANDOVAL-GUTIERREZ,CORONA,

AZCUNA, andGARCIA, JJ.

Promulated:!ar"# $%, &''(

)------------------------------------------------------------------------------------)

D E C I S I O N

&ARCIA, J.1

Assa*led and sou#t to +e set as*de *n t#*s et*t*on or re.*e/ on "ert*orar* *st#e De"*s*on dated $0 1anuar2 &''3 o t#e Court o Aeals 4CA5 *n CA-G.R. CV No.73827,re.ers*n an earl*er de"*s*on o t#e Re*onal Tr*al Court 4RTC5 o Da.ao C*t2and a""ord*nl2 d*sm*ss*n t#e der*.at*.e su*t *nst*tuted +2 et*t*oner El*odoro C6 Cru7or and *n +e#al o t#e sto"8#olders o "o-et*t*oner 9*l**nas Port Ser.*"es, In"649*lort, #ereater56

T#e "ase *s a"tuall2 an *ntra-"ororate d*sute *n.ol.*n 9*lort, a domest*""ororat*on enaed *n ste.edor*n ser.*"es /*t# r*n"*al o*"e *n Da.ao C*t26 It /as*n*t*all2 *nst*tuted /*t# t#e Se"ur*t*es and E)"#ane Comm*ss*on 4SEC5 /#ere t#e"ase #*+ernated and rema*ned unresol.ed or se.eral 2ears unt*l *t /as o.erta8en +2

t#e ena"tment *nto la/, on $0 1ul2 &''', o Reu+l*" A"t 4R6A65 No6 (00, ot#er/*se8no/n as t#e Securities Regulation Code6 9rom t#e SEC and "ons*stent /*t# R6A6No6 (00, t#e "ase /as transerred to t#e RTC o !an*la, ;ran"# $3, s*tt*n as a"ororate "ourt6 Su+se,'='6'' ea"#, and t#e ele"t*on t#ereto o "erta*n mem+ers o t#e +oard, to /*t:

Asst6 V*"e-Pres*dent or Cororate Plann*n - Edar C6 Tr*n*dad 4D*re"tor5Asst6 V*"e-Pres*dent or Oerat*ons - El*e7er ;6 de 1esus 4D*re"tor5Asst6 V*"e-Pres*dent or 9*nan"e - !ar2 1ean D6 Co 4D*re"tor5Asst6 V*"e-Pres*dent or Adm*n*strat*on - ?enr2 C#ua 4D*re"tor5Se"*al Asst6 to t#e C#a*rman - Arsen*o Loe7 C#ua 4D*re"tor5Se"*al Asst6 to t#e Pres*dent - 9ortunato V6 de Castro

In #*s aoresa*d letter, Cru7 re6 re-"reat*on o t#e os*t*ons o Ass*stant V*"e-Pres*dents4AVPs5 or Cororate Plann*n, Oerat*ons, 9*nan"e andAdm*n*strat*on, and t#e ele"t*on t#ereto o +oard mem+ersEdar C6 Tr*n*dad, El*e7er de 1esus, !ar2 1ean D6 Co and?enr2 C#ua, rese"t*.el2 and

36 "reat*on o t#e add*t*onal os*t*ons o Se"*al Ass*stants tot#e Pres*dent and t#e ;oard C#a*rman, /*t# 9ortunato V6de Castro and Arsen*o Loe7 C#ua ele"ted to t#e same,t#e d*re"tors ele"ted@ao*nted t#ereto not do*n an2 /or8to deser.e t#e mont#l2 remunerat*on o P$>,'='6'' ea"#6

In t#e same et*t*on, do"8eted as SEC Case No6 '%-0>-330$, Cru7 alleed t#atdes*te demands made uon t#e resondent mem+ers o t#e +oard o d*re"tors to


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des*st rom "reat*n t#e os*t*ons *n 5 t#e et*t*on does not s#o/ t#at t#esto"8#olders +r*n*n t#e su*t are Bo*ned as nom*nal art*es6 In suort o t#e*r"ounter"la*m, resondents a.erred t#at Cru7 *led t#e alleed der*.at*.e su*t *n +ada*t# and urel2 or #arassment uroses on a""ount o #*s non-reele"t*on to t#e+oard *n t#e $00$ eneral sto"8#olders meet*n6

As earl*er narrated, t#e der*.at*.e su*t 4SEC Case No6 '%-0>-330$5 #*+ernated /*t#t#e SEC or a lon er*od o t*me6 *t# t#e ena"tment o R6A6 No6 (00, t#e "ase /as*rst turned o.er to t#e RTC o !an*la, ;ran"# $3, s*tt*n as a "ororate "ourt6T#ereater, on resondents mot*on, *t /as e.entuall2 transerred to t#e RTC o Da.aoC*t2 /#ereat *t /as do"8eted as Ci"il Case No. 28,##2-2$$%and raled to ;ran"# $'t#ereo6

On $' De"em+er &''$, RTC-Da.ao C*t2 rendered *ts de"*s*on *n t#e "ase6 E.en as *tound t#at 4$5 9*lorts ;oard o D*re"tors #as t#e o/er to "reate os*t*ons not

ro.*ded or *n t#e +2-la/s o t#e "ororat*on s*n"e t#e +oard *s t#e o.ern*n +od2and 4&5 t#e *n"reases *n t#e salar*es o t#e +oard "#a*rman, .*"e-res*dent, treasurerand ass*stant eneral manaer are reasona+le, t#e tr*al "ourt nonet#eless renderedBudment aa*nst t#e resondents +2 order*n t#e d*re"tors #old*n t#e os*t*ons oAss*stant V*"e Pres*dent or Cororate Plann*n, Se"*al Ass*stant to t#e Pres*dentand Se"*al Ass*stant to t#e ;oard C#a*rman to reund to t#e "ororat*on t#e salar*est#e2 #a.e re"e*.ed as su"# o*"ers considering that &ilipinas 'ort Ser"ices is not a(ig corporation re)uiring !ultiple e*ecuti"e positionsand t#at sa*d os*t*ons ere +ustcreated or acco!!odation.e


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Pet*t*oners ass*ned our 435 errors alleedl2 "omm*tted +2 t#e CA6 9or"lar*t2, /e s#all ormulate t#e *ssues as ollo/s:

$6 #et#er t#e CA erred *n #old*n t#at 9*lorts ;oard o D*re"torsa"ted /*t#*n *ts o/ers *n "reat*n t#e e)e"ut*.e "omm*ttee and t#eos*t*ons o AVPs or Cororate Plann*n, Oerat*ons, 9*nan"e andAdm*n*strat*on, and t#ose o t#e Se"*al Ass*stants to t#e Pres*dentand t#e ;oard C#a*rman, ea"# /*t# "orresond*n remunerat*on,

and *n *n"reas*n t#e salar*es o t#e os*t*ons o ;oard C#a*rman,V*"e-Pres*dent, Treasurer and Ass*stant General !anaer and

&6 #et#er t#e CA erred *n *nd*n t#at no e.*den"e e)*sts to ro.et#at 4a5 t#e os*t*ons o AVP or Cororate Plann*n, Se"*alAss*stant to t#e Pres*dent and Se"*al Ass*stant to t#e ;oardC#a*rman /ere "reated merel2 or a""ommodat*on, and 4+5 t#esalar*es@emoluments "orresond*n to sa*d os*t*ons /ere a"tuall2a*d to and re"e*.ed +2 t#e d*re"tors ao*nted t#ereto6

9or t#e*r art, resondents, as*de rom o

t#e Cororat*on Code e)l*"*tl2 ro.*des t#at unless ot#er/*se ro.*ded t#ere*n, t#e"ororate o/ers o all "ororat*ons ormed under t#e Code s#all +e e)er"*sed, all+us*ness "ondu"ted and all roert2 o t#e "ororat*on s#all +e "ontrolled and #eld +2a +oard o d*re"tors6 T#us, /*t# t#e e)"et*on onl2 o some o/ers e)ressl2 ranted+2 la/ to sto"8#olders 4or mem+ers, *n "ase o non-sto"8 "ororat*ons5, t#e +oard od*re"tors 4or trustees, *n "ase o non-sto"8 "ororat*ons5 #as t#e sole aut#or*t2 todeterm*ne ol*"*es, enter *nto "ontra"ts, and "ondu"t t#e ord*nar2 +us*ness o t#e"ororat*on /*t#*n t#e s"oe o *ts "#arter, i.e6, *ts art*"les o *n"ororat*on, +2-la/sand rele.ant ro.*s*ons o la/6 Ver*l2, t#e aut#or*t2 o t#e +oard o d*re"tors *srestr*"ted to t#e manaement o t#e reular +us*ness aa*rs o t#e "ororat*on, unlessmore e)tens*.e o/er *s e)ressl2 "onerred6

T#e raison detre+e#*nd t#e "onerment o "ororate o/ers on t#e +oard od*re"tors *s not lost on t#e Court6 Indeed, t#e "on"entrat*on *n t#e +oard o t#e o/erso "ontrol o "ororate +us*ness and o ao*ntment o "ororate o*"ers and

manaers *s ne"essar2 or e*"*en"2 *n an2 lare oran*7at*on6 Sto"8#olders are toonumerous, s"attered and unam*l*ar /*t# t#e +us*ness o a "ororat*on to "ondu"t *ts+us*ness d*re"tl26 And so t#e lan o "ororate oran*7at*on *s or t#e sto"8#olders to"#oose t#e d*re"tors /#o s#all "ontrol and suer.*se t#e "ondu"t o "ororate+us*ness6

In t#e resent "ase, t#e +oards "reat*on o t#e os*t*ons o Ass*stant V*"ePres*dents or Cororate Plann*n, Oerat*ons, 9*nan"e and Adm*n*strat*on, andt#ose o t#e Se"*al Ass*stants to t#e Pres*dent and t#e ;oard C#a*rman, /as *n

a""ordan"e /*t# t#e reular +us*ness oerat*ons o 9*lort as *t *s aut#or*7ed to do so+2 t#e "ororat*ons +2-la/s, ursuant to t#e Cororat*on Code6

T#e ele"t*on o o*"ers o a "ororat*on *s ro.*ded or under Se"t*on &= ot#e Code /#*"# reads:

Se"6 &=6 Corporate oicers, )uoru!. Immed*atel2 ater t#e*r ele"t*on, t#ed*re"tors o a "ororat*on must ormall2 oran*7e +2 t#e ele"t*on o a res*dent, /#os#all +e a d*re"tor, a treasurer /#o ma2 or ma2 not +e a d*re"tor, a se"retar2 /#os#all +e a res*dent and "*t*7en o t#e P#*l**nes, and s*ch other o22'cers "s 3"y bepro)'ded 2or 'n the by(l"4s6 4Em#as*s sul*ed65

In turn, t#e amended ;2la/s o 9*lort ro.*des t#e ollo/*n:

O22'cers o2 the corpor"t'on, "s pro)'ded 2or by the by(l"4s, sh"ll beelected by the bo"rd o2 d'rectors at t#e*r *rst meet*n ater t#e ele"t*on o D*re"tors6)))

T#e o*"ers o t#e "ororat*on s#all +e a C#a*rman o t#e ;oard, Pres*dent,a V*"e-Pres*dent, a Se"retar2, a Treasurer, a General !anaer and s*ch othero22'cers "s the $o"rd o2 D'rectors 3"y 2ro3 t'3e to t'3e pro)'de, and t#eseo*"ers s#all +e ele"ted to #old o*"e unt*l t#e*r su""essors are ele"ted and = o t#eCororat*on Code, t#e "reat*on o an e)e"ut*.e "omm*ttee must +e ro.*ded or *n t#e+2la/s o t#e "ororat*on6

Not/*t#stand*n t#e s*len"e o 9*lorts +2la/s on t#e matter, /e "annot rulet#at t#e "reat*on o t#e e)e"ut*.e "omm*ttee +2 t#e +oard o d*re"tors *s *lleal orunla/ul6 One reason *s t#e a+sen"e o a s#o/*n as to t#e true nature and un"t*ons

o sa*d e)e"ut*.e "omm*ttee "ons*der*n t#at t#e e)e"ut*.e "omm*ttee, reerred to *nSe"t*on >= o t#e Cororat*on Code /#*"# *s as o/erul as t#e +oard o d*re"tors and


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*n ee"t a"t*n or t#e +oard *tsel, s#ould +e d*st*nu*s#ed rom ot#er "omm*ttees/#*"# are /*t#*n t#e "ometen"2 o t#e +oard to "reate at an2t*me and /#ose a"t*onsre,'='6'' a mont#, /as merel2 or a""ommodat*on uroses "ons*der*n t#at9*lort *s not a +* "ororat*on re5 os*t*ons6

It *s elementar2 *n ro"edural la/ t#at +are alleat*ons do not "onst*tutee.*den"e ade


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Indeed, *t /ould +e an *mroer Bud*"*al *ntrus*on *nto t#e *nternal aa*rs o9*lort /ere t#e Court to determ*ne t#e ror*et2 or *mror*et2 o t#e "reat*on oo*"es t#ere*n and t#e rant o salar2 *n"reases to o*"ers t#ereo6 Su"# are"ororate and@or +us*ness de"*s*ons /#*"# onl2 t#e "ororat*ons ;oard o D*re"tors"an determ*ne6

So *t *s t#at *n 'hilippine Stoc1 *change, nc. ". CA,t#e Court une


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to t#e RTC o Da.ao C*t2 as Ci"il Case No. 28,##2-2$$%, *s a der*.at*.e su*t o /#*"#Cru7 #as t#e ne"essar2 leal stand*n to *nst*tute6

6+EREFORE, t#e et*t*on *s DENIEDand t#e "#allened de"*s*on o t#eCA *s AFFIR#ED *n all rese"ts6

No ronoun"ement as to "osts6 SO ORDERED.

9IRST DIVISION

7&.R. No. 89:;9. Septe3ber 89, 990 o Amended Comla*nt5 *s *nade5 o t#eoutstand*n "a*tal sto"8 ) ) )6

No su"# .ote /as o+ta*ned +2 deendant Nen*ta Lee

Gruen+er or t#at roosed saleH ne*t#er /as t#ere e.*den"e tos#o/ t#at t#e suosed transa"t*on /as rat**ed +2 t#e"ororat*on6 Pla*nt* s#ould #a.e +een on t#e loo8 out undert#ese "*r"umstan"es6 !ore so, la*nt* #*msel o/nsH se.eral"ororat*ons 4tsn dated Auust $%, $00>, 6 >5 /#*"# ma8es #*m8no/ledea+le on "ororat*on matters6

Reard*n t#e 3->=5

9or "lar*t2, t#e Areement dated 9e+ruar2 $3, $00 *s rerodu"ed #ereunder:

AGREE!ENT

JNO ALL !EN ;K T?ESE PRESENTS:

T#*s Areement, made and entered *nto +2 and +et/een:

!OTORIC? SALES CORPORATION, a "ororat*on dul2oran*7ed and e)*st*n under and +2 .*rtue o P#*l**ne La/s,/*t# r*n"*al o*"e address at ==$' Sout# Suer ?*-/a2 "or6;alderama St6, P*o del P*lar, !a8at*, !etro !an*la, reresented#ere*n +2 *ts Treasurer, NENITA LEE GRUEN;ERG, #ere*naterreerred to as t#e TRANS9EROR

- and --

SAN 1UAN STRUCTURAL F STEEL 9A;RICATORS, a"ororat*on dul2 oran*7ed and e)*st*n under and +2 .*rtue ot#e la/s o t#e P#*l**nes, /*t# r*n"*al o*"e address atSumulon ?*#/a2, ;arr*o !am+unan, Ant*olo, R*7al,reresented #ere*n +2 *ts Pres*dent, ANDRES T6 CO, #ere*naterreerred to as t#e TRANS9EREE6

ITNESSET?, T#at:

?EREAS, t#e TRANS9EROR *s t#e o/ner o a ar"el oland *dent**ed as Lot >' ;lo"8 $ o t#e ACROPOLIS GREENS

SU;DIVISION lo"ated at t#e D*str*"t o !ur#2, ue7on C*t2,!etro !an*la, "onta*n*n an area o 9OUR ?UNDRED


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9OURTEEN 43$35 SUARE !ETERS, "o.ered +2 aTRANS9ER O9 RIG?TS +et/een 1N! Realt2F De.6 Cor6 ast#e Transeror and !otor*"# Sales Cor6 as t#e Transeree

NO, T?ERE9ORE, or and *n "ons*derat*on o t#eoreo*n rem*ses, t#e art*es #a.e areed as ollo/s:

$6 T#at t#e ur"#ase r*"e s#all +e at 9IVE T?OUSANDTO ?UNDRED PESOS 4P=,&''6''5 er s


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$6 as t#ere a .al*d "ontra"t o sale +et/een et*t*oner and!otor*"#

&6 !a2 t#e do"tr*ne o *er"*n t#e .e*l o "ororate *"t*on +e al*edto !otor*"#

>6 Is t#e alleed alterat*on o Gruen+ers test*mon2 as re"orded *nt#e trans"r*t o stenora#*" notes mater*al to t#e d*sos*t*on ot#*s "ase

36 Are resondents l*a+le or damaes and attorne2s ees

The Co*rts R*l'n=

T#e et*t*on *s de.o*d o mer*t6

F'rst Iss*e1 Validity of Agreement

Pet*t*oner San 1uan Stru"tural and Steel 9a+r*"ators, In"6 allees t#at on9e+ruar2 $3, $00, *t entered t#rou# *ts res*dent, Andres Co, *nto t#e d*sutedAreement /*t# Resondent !otor*"# Sales Cororat*on, /#*"# /as *n turn alleedl2reresented +2 *ts treasurer, Nen*ta Lee Gruen+er6 Pet*t*oner *ns*sts t#at /H#en

Gruen+er and Co a*)ed t#e*r s*natures on t#e "ontra"t t#e2 +ot# "onsented to +e+ound +2 t#e terms t#ereo6 Ero, et*t*oner "ontends t#at t#e "ontra"t *s +*nd*n ont#e t/o "ororat*ons6 e do not aree6

True, Gruen+er and Co s*ned on 9e+ruar2 $3, $00, t#e Areementa""ord*n to /#*"# a lot o/ned +2 !otor*"# Sales Cororat*on /as urortedl2 sold6Su"# "ontra"t, #o/e.er, "annot +*nd !otor*"#, +e"ause *t ne.er aut#or*7ed or rat**edsu"# sale6

A "ororat*on *s a Bur*d*"al erson searate and d*st*n"t rom *ts sto"8#olders ormem+ers6 A""ord*nl2, t#e roert2 o t#e "ororat*on *s not t#e roert2 o *tssto"8#olders or mem+ers and ma2 not +e sold +2 t#e sto"8#olders or mem+ers/*t#out e)ress aut#or*7at*on rom t#e "ororat*ons +oard o d*re"tors6 Se"t*on &> o

;P %, ot#er/*se 8no/n as t#e Cororat*on Code o t#e P#*l**nes, ro.*des:

SEC6 &>6 /he 5oard o 6irectors or /rustees6 -- Unless ot#er/*sero.*ded *n t#*s Code, t#e "ororate o/ers o all "ororat*ons ormedunder t#*s Code s#all +e e)er"*sed, all +us*ness "ondu"ted and allroert2 o su"# "ororat*ons "ontrolled and #eld +2 t#e +oard o d*re"torsor trustees to +e ele"ted rom amon t#e #olders o sto"8s, or /#ere t#ere*s no sto"8, rom amon t#e mem+ers o t#e "ororat*on, /#o s#all #oldo*"e or one 4$5 2ear and unt*l t#e*r su""essors are ele"ted and


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4=5 To enter an2 "ontra"t +2 /#*"# t#e o/ners#* o an*mmo.a+le *s transm*tted or a"


11/272

sto"8 or .ot*n r*#ts *s o/ned or "ontrolled +2 anot#er "ororat*on /#*"#*s not a "lose "ororat*on /*t#*n t#e mean*n o t#*s Code6 )))6

T#e art*"les o *n"ororat*on o !otor*"# Sales Cororat*on does not "onta*n an2ro.*s*on stat*n t#at 4$5 t#e num+er o sto"8#olders s#all not e)"eed &', or 4&5 areemt*on o s#ares *s restr*"ted *n a.or o an2 sto"8#older or o t#e "ororat*on, or4>5 l*st*n *ts sto"8s *n an2 sto"8 e)"#ane or ma8*n a u+l*" oer*n o su"# sto"8s*s ro#*+*ted6 9rom *ts art*"les, *t *s "lear t#at Resondent !otor*"# *s not a "lose"ororat*on6 !otor*"# does not +e"ome one e*t#er, Bust +e"ause Souses Re2naldo

and Nen*ta Gruen+er o/ned 006%%M o *ts su+s"r*+ed "a*tal sto"86 T#e mHereo/ners#* +2 a s*nle sto"8#older or +2 anot#er "ororat*on o all or nearl2 all o t#e"a*tal sto"8 o a "ororat*on *s not o *tsel su*"*ent round or d*sreard*n t#esearate "ororate ersonal*t*es6 So too, a narro/ d*str*+ut*on o o/ners#* does not,+2 *tsel, ma8e a "lose "ororat*on6

Pet*t*oner "*tes anuel R. 6ula nterprises, nc. ". Court o Appeals/#ere*nt#e Court ruled t#at ))) et*t*oner "ororat*on *s "lass**ed as a "lose "ororat*on and,"onse


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aut#or*t2 to sell t#e lot6

Fo*rth Iss*e1

!amages and Attorneys "ees

9*nall2, et*t*oner ra2s or damaes and attorne2s ees, alle*n t#at *Hn anutter d*sla2 o mal*"e and +ad a*t#, rHesondents attemted and su""eeded *n*mress*n on t#e tr*al "ourt and t#eH Court o Aeals t#at Gruen+er d*d not

reresent #ersel as aut#or*7ed +2 Resondent !otor*"# des*te t#e re"e*t *ssued +2t#e ormer se"**"all2 *nd*"at*n t#at s#e /as s*n*n on +e#al o !otor*"# SalesCororat*on6 Resondent !otor*"# l*8e/*se a"ted *n +ad a*t# /#en *t "la*med *t d*dnot aut#or*7e Resondent Gruen+er and t#at t#e "ontra"t /asH not +*nd*n, *nsoarHas *t /asH "on"erned, des*te re"e*t and enBo2ment o t#e ro"eeds o Gruen+ersa"t6 Assum*n t#at Resondent !otor*"# /as not a art2 to t#e alleed raud,et*t*oner ma*nta*ns t#at Resondent Gruen+er s#ould +e #eld l*a+le +e"ause s#ea"ted raudulentl2 and *n +ad a*t# *nH reresent*n #ersel as dul2 aut#or*7ed +2RHesondent CHororat*on6

As alread2 stated, /e susta*n t#e *nd*ns o +ot# t#e tr*al and t#e aellate"ourts t#at t#e oreo*n alleat*ons la"8 a"tual +ases6 ?en"e, an a/ard o damaesor attorne2s ees "annot +e Bust**ed6 T#e amount a*d as earnest mone2 /as not

ro.en to #a.e redounded to t#e +ene*t o Resondent !otor*"#6 Pet*t*oner "la*mst#at sa*d amount /as deos*ted to t#e a""ount o Resondent !otor*"#, +e"ause *t/as deos*ted /*t# t#e a""ount o Aren Commer"*al "@o !otor*"# Sales Cororat*on6Resondent Gruen+er, #o/e.er, d*sutes t#e alleat*ons o et*t*oner6 S#e test**edas ollo/s:

Kou .oluntar*l2 a""eted t#e P$'','''6'', as a matter o a"t, t#at /asen"as#ed, t#e "#e"8 /as en"as#ed6

A Kes, s*r, t#e "#e"8 /as a*d *n m2 name and I deos*tedH *t 6 6 6

In 2our a""ount

A Kes, s*r6

In an2 e.ent, Gruen+er oered to return t#e amount to et*t*oner ))) s*n"e t#e saled*d not us# t#rou#6

!oreo.er, /e note t#at Andres Co *s not a neo#2te *n t#e /orld o "ororate+us*ness6 ?e #as +een t#e res*dent o Pet*t*oner Cororat*on or more t#an ten 2earsand #as also ser.ed as "#*e e)e"ut*.e o t/o ot#er "ororate ent*t*es6 Co "annote*n *noran"e o t#e s"oe o t#e aut#or*t2 o a "ororate treasurer su"# asGruen+er6 Ne*t#er "an #e +e o+l*.*ous to #*s dut2 to as"erta*n t#e s"oe oGruen+ers aut#or*7at*on to enter *nto a "ontra"t to sell a ar"el o land +elon*n to!otor*"#6

Indeed, et*t*oners "la*m o raud and +ad a*t# *s unsu+stant*ated and a*ls toersuade t#e Court6 Indu+*ta+l2, et*t*oner aears to +e t#e .*"t*m o *ts o/n o*"ers

nel*en"e *n enter*n *nto a "ontra"t /*t# and a2*n an unaut#or*7ed o*"er oanot#er "ororat*on6

As "orre"tl2 ruled +2 t#e Court o Aeals, #o/e.er, Nen*ta Gruen+er s#ould+e ordered to return to et*t*oner t#e amount s#e re"e*.ed as earnest mone2, as noone s#all enr*"# #*msel at t#e e)ense o anot#er, a r*n"*le em+od*ed *n Art*"le&$=3 o t#e C*.*l Code6 Alt#ou# t#ere /as no +*nd*n relat*on +et/een t#em,et*t*oner a*d Gruen+er on t#e m*sta8en +el*e t#at s#e #ad t#e aut#or*t2 to sell t#eroert2 o !otor*"#6 Art*"le &$== o t#e C*.*l Code ro.*des t#at Ha2ment +2 reason

o a m*sta8e *n t#e "onstru"t*on or al*"at*on o a d**"ult


13/272

Reu+l*" o t#e P#*l**nesSPRE#E CORT!an*la

EN ;ANC

&.R. No. L(;>98 #"y 0, 9/8

ALFREDO #ONTELI$ANO, ET AL., la*nt*s-ael lants,.s6$ACOLOD(#RCIA #ILLIN& CO., INC.,deendant-aellee6

/a9ada, /eehan1ee and Carreon or plaintis-appellants.:ilado and :ilado or deendant-appellee.

RE-ES, .$.L., J.#

Aeal on o*nts o la/ rom a Budment o t#e Court o 9*rst Instan"e o O""*dentalNeros, *n *ts C*.*l Case No6 &%'>, d*sm*ss*n la*nt*s "omla*nt t#at sou#t to"omel t#e deendant !*ll*n Coman2 to *n"rease la*nt*s s#are *n t#e suarrodu"ed rom t#e*r "ane, rom %'M to %&6>>M, start*n rom t#e $0=$-$0=& "ro2ear6%;ph' 2ears to 3= 2ears6 To t#*s ee"t, a r*nted Amended !*ll*n Contra"t orm /asdra/n u6 On Auust &', $0>%, t#e ;oard o D*re"tors o t#e aellee ;a"olod-!ur"*a!*ll*n Co6, In"6, adoted a resolut*on 4A"ts No6 $$, A"uerdo No6 $5 rant*n urt#er"on"ess*ons to t#e lanters o.er and a+o.e t#ose "onta*ned *n t#e r*nted Amended!*ll*n Contra"t6 T#e +one o "ontent*on *s arara# 0 o t#*s resolut*on, t#at readsas ollo/s:

ACTA No6 $$SESSION DE LA 1UNTA DIRECTIVAAGOSTO &', $0>%

) ) ) ) ) ) ) ) )

A"uerdo No6 $6 Pre.*a mo"*on de+*damentese"undada, la 1unta en "ons*dera"*on a una et*"*on delos lantadores #e"#a or un "om*te nom+rado or losm*smos, a"uerda enmendar el "ontrato de mol*endaenmendado med*entelas s*uentes:

) ) ) ) ) ) ) ) )

06a ue s* durante la .*en"*a de este "ontrato de

!ol*enda Enmendado, las"entrales a7u"areras, deNeros O""*dental, "u2a rodu""*on anual de a7u"ar"entr*uado sea mas de una ter"era arte de larodu""*on total de todas las"entrales a7u"areras deNeros O""*dental, "on"ed*eren a sus lantadoresmeBores "ond*"*ones %, s*ned +2 t#e CentralsGeneral !anaer, /as not atta"#ed to t#e r*nted "ontra"t unt*l Ar*l $(, $0>( /*t#t#e notat*on

Las enm*endas arr*+a trans"r*tas orman arte del "ontrato demol*enda enmendado, otorado or 2 la ;a"olod-!ur"*a !*ll*nCo6, In"6

In $0=>, t#e aellants *n*t*ated t#e resent a"t*on, "ontend*n t#at t#ree Nerossuar "entrals 4La Carlota, ;*nal+aan-Isa+ela and San Carlos5, /*t# a total annualrodu"t*on e)"eed*n one-t#*rd o t#e rodu"t*on o all t#e suar "entral m*lls *n t#ero.*n"e, #ad alread2 ranted *n"reased art*"*at*on 4o %&6=M5 to t#e*r lanters, andt#at under arara# 0 o t#e resolut*on o Auust &', $0>%, #eretoore


14/272

alread2 *n"ororated *nto *ts terms6 No reason aears o re"ord /#2, *n t#e a"e osu"# "on"ess*ons, t#e aellants s#ould reBe"t t#em or "ons*der t#em as searateand aart rom t#e ma*n amended m*ll*n "ontra"t, se"*all2 ta8*n *nto a""ount t#ataellant Alredo !ontel*+ano /as, at t#e t*me, t#e Pres*dent o t#e PlantersAsso"*at*on 4E)#*+*t 3, 6 $$5 t#at #ad a*tated or t#e "on"ess*ons em+od*ed *n t#eresolut*on o Auust &', $0>%6 T#at t#e resolut*on ormed an *nteral art o t#eamended m*ll*n "ontra"t, s*ned on Setem+er $', and not a searate +ara*n, *surt#er s#o/n +2 t#e a"t t#at a "o2 o t#e resolut*on /as s*ml2 atta"#ed to t#er*nted "ontra"t /*t#out se"*al neot*at*ons or areement +et/een t#e art*es6

It ollo/s rom t#e oreo*n t#at t#e terms em+od*ed *n t#e resolut*on o Auust &',$0>% /ere suorted +2 t#e same causa or "ons*derat*on underl2*n t#e ma*namended m*ll*n "ontra"t *6e6, t#e rom*ses and o+l*at*ons underta8en t#ereunder+2 t#e lanters, and, art*"ularl2, t#e e)tens*on o *ts oerat*.e er*od or an add*t*onal$= 2ears o.er and +e2ond t#e >' 2ears st*ulated *n t#e or**nal "ontra"t6 ?en"e, t#e"on"lus*on o t#e "ourt +elo/ t#at t#e resolut*on "onst*tuted ratu*tous "on"ess*onsnot suorted +2 an2 "ons*derat*on *s leall2 untena+le6

All d*s% deendant"ororat*on alread2 understood t#at t#e r*nted terms /ere not "ontroll*n, sa.e asmod**ed +2 *ts resolut*on o Auust &', $0>% and /e are sat*s*ed t#at su"# /as alsot#e understand*n o aellants #ere*n, and t#at t#e m*nds o t#e art*es met uont#at +as*s6 Ot#er/*se t#ere /ould #a.e +een no "onsent or meet*n o t#e m*nds,and no +*nd*n "ontra"t at all6 ;ut t#e "ondu"t o t#e art*es *nd*"ates t#at t#e2assumed, and t#e2 do not no/ den2, t#at t#e s*n*n o t#e "ontra"t on Setem+er$', $0>%, d*d *.e r*se to a +*nd*n areement6 T#at areement #ad to e)*st on t#e+as*s o t#e r*nted terms as mod**ed +2 t#e resolut*on o Auust &', $0>%, or not at

all6 S*n"e t#ere *s no rat*onal e)lanat*on or t#e "oman2s assent*n to t#e urt#er"on"ess*ons as8ed +2 t#e lanters +eore t#e "ontra"ts /ere s*ned, e)"et asurt#er *ndu"ement or t#e lanters to aree to t#e e)tens*on o t#e "ontra"t er*od, toallo/ t#e "oman2 no/ to retra"t su"# "on"ess*ons /ould +e to san"t*on a rauduon t#e lanters /#o rel*ed on su"# add*t*onal st*ulat*ons6

T#e same "ons*derat*ons al2 to t#e .o*d *nno.at*on t#eor2 o aellees6 T#ere"an +e no no.at*on unless t/o d*st*n"t and su""ess*.e +*nd*n "ontra"ts ta8e la"e,/*t# t#e later des*ned to rela"e t#e re"ed*n "on.ent*on6 !od**"at*ons *ntrodu"ed+eore a +ara*n +e"omes o+l*ator2 "an *n no sense "onst*tute no.at*on *n la/6

Stress *s la"ed on t#e a"t t#at t#e te)t o t#e Resolut*on o Auust &', $0>% /as notatta"#ed to t#e r*nted "ontra"t unt*l Ar*l $(, $0>(6 ;ut, e)"et *n t#e "ase o

statutor2 orms or solemn areements 4and *t *s not "la*med t#at t#*s *s one5, *t *s t#eassent and "on"urren"e 4t#e meet*n o t#e m*nds5 o t#e art*es, and not t#e

sett*n do/n o *ts terms, t#at "onst*tutes a +*nd*n "ontra"t6 And t#e a"t t#at t#eaddendum *s onl2 s*ned +2 t#e General !anaer o t#e m*ll*n "oman2 em#as*7est#at t#e add*t*on /as made solel2 *n order t#at t#e memor*al o t#e terms o t#eareement s#ould +e ull and "omlete6

!u"# *s made o t#e "*r"umstan"e t#at t#e reort su+m*tted +2 t#e ;oard o D*re"torso t#e aellee "oman2 *n No.em+er $0, $0>% 4E)#*+*t 35 onl2 made ment*on o0'M, t#e lanters #a.*n areed to t#e %'-3' s#ar*n o t#e suar set ort# *n t#er*nted amended m*ll*n "ontra"ts, and d*d not ma8e an2 reeren"e at all to t#e

terms o t#e resolut*on o Auust &', $0>%6 ;ut a read*n o t#*s reort s#o/s t#at *t/as not *ntended to *n.entor2 all t#e deta*ls o t#e amended "ontra"t numerousro.*s*ons o t#e r*nted terms are alao lossed o.er6 T#e D*re"tors o t#e aellee!*ll*n Coman2 #ad no reason at t#e t*me to "all attent*on to t#e ro.*s*ons o t#eresolut*on *n


15/272

Budment o t#e +oard o d*re"tors t#e +oard *s t#e +us*nessmanaer o t#e "ororat*on, and so lon as *t a"ts *n ood a*t# *tsorders are not re.*e/a+le +2 t#e "ourts6 49let"#er on Cororat*ons,Vol6 &, 6 >0'56

And *t aear*n und*suted *n t#*s aeal t#at suar "entrals o La Carlota, ?a/a**anP#*l**nes, San Carlos and ;*nal+aan 4/#*"# rodu"e o.er one-t#*rd o t#e ent*reannual suar rodu"t*on *n O""*dental Neros5 #a.e ranted roress*.el2 *n"reas*nart*"*at*ons to t#e*r ad#ered lanter at an a.erae rate o

%&6>>>M or t#e $0=$-=& "ro 2ear

%36&M or $0=&-=>

%36>M or $0=>-=3

%36=M or $0=3-== and

%>6=M or $0==-=%,

t#e aellee ;a"olod-!ur"*a !*ll*n Coman2 *s, under t#e terms o *ts Resolut*on oAuust &', $0>%, dut2 +ound to rant s*m*lar *n"reases to la*nt*s-aellants #ere*n6

?ERE9ORE, t#e de"*s*on under aeal *s re.ersed and set as*de and Budment *sde"reed senten"*n t#e deendant-aellee to a2 la*nt*s-aellants t#e d*erent*alor *n"rease o art*"*at*on *n t#e m*lled suar *n a""ordan"e /*t# arara# 0 o t#eaellee Resolut*on o Auust &', $0>%, o.er and *n add*t*on to t#e %'M e)ressed *nt#e r*nted Amended !*ll*n Contra"t, or t#e .alue t#ereo /#en due, as ollo/s:

',>>>M to aellants !ontel*+ano or t#e $0=$-$0=& "ro 2ear,sa*d aellants #a.*n re"e*.ed an add*t*onal &M "orresond*n to

sa*d 2ear *n O"to+er, $0=>

&6>>>M to aellant Gon7aa F Co6, or t#e $0=$-$0=& "ro 2earand to all aellants t#ereater 36&M or t#e $0=&-$0=> "ro 2ear36>M or t#e $0=>-$0=3 "ro 2ear36=M or t#e $0=3-$0== "ro 2ear>6=M or t#e $0==-$0=% "ro 2ear

/*t# *nterest at t#e leal rate on t#e .alue o su"# d*erent*al dur*n t#e t*me t#e2/ere /*t##eld and t#e r*#t *s reser.ed to la*nt*s-aellants to sue or su"#add*t*onal *n"reases as t#e2 ma2 +e ent*tled to or t#e "ro 2ears su+se


16/272

SECOND DIVISION

7&.R. No. 8;:/9. October 8?, 99?4+5o t#e Re.*sed Se"ur*t*es A"t, and or t#e urose o ensur*n a*r adm*n*strat*on ot#e e)"#ane6 ;ot# as a "ororat*on and as a sto"8 e)"#ane, t#e et*t*oner *ssu+Be"t to u+l*" resondents Bur*sd*"t*on, reulat*on and "ontrol6 A""et*n t#earument t#at t#e u+l*" resondent #as t#e aut#or*t2 merel2 to suer.*se or reulate,/ould amount to ser*ous "onse


18/272

leal*t2 o *ts o/ners#* on t#ese roert*es +eore *ts s#ares"an +e l*sted6

In add*t*on, t#e arument t#at t#e PALI roert*es +elon to t#e !*l*[email protected]*on does not *ns*re +el*e6 T#e o*nt *s, t#e PALI roert*es are no/ t*tled6 Aroert2 losses *ts u+l*" "#ara"ter t#e moment *t *s "o.ered +2 a t*tle6 As a matter oa"t, t#e t*tles #a.e lon +een settled +2 a *nal Budment and t#e *nal de"ree #a.*n+een re*stered, t#e2 "an no loner +e re-oened "ons*der*n t#at t#e one 2earer*od #as alread2 assed6 Lastl2, t#e determ*nat*on o /#at standard to al2 *nallo/*n PALIs al*"at*on or l*st*n, /#et#er t#e d*s"ret*on met#od or t#e s2stem ou+l*" d*s"losure ad#ered to +2 t#e SEC, s#ould +e addressed to t#e Se"ur*t*esComm*ss*on, *t +e*n t#e o.ernment aen"2 t#at e)er"*ses +ot# suer.*sor2 andreulator2 aut#or*t2 o.er all "ororat*ons6

On Auust $=, $00%, t#e PSE, ater *t /as ranted an e)tens*on, *led an *nstantPet*t*on or Re.*e/ on Certiorari, ta8*n e)"et*on to t#e rul*ns o t#e SEC and t#eCourt o Aeals6 Resondent PALI *led *ts Comment to t#e et*t*on on O"to+er $(,$00%6 On t#e same date, t#e PCGG *led a !ot*on or Lea.e to *le a Pet*t*on orInter.ent*on6 T#*s /as ollo/ed u +2 t#e PCGGs Pet*t*on or Inter.ent*on on O"to+er&$, $00%6 A sulemental Comment /as *led +2 PALI on O"to+er &=, $00(6 T#eO*"e o t#e Sol*"*tor General, reresent*n t#e SEC and t#e Court o Aeals,l*8e/*se *led *ts Comment on De"em+er &%, $00%6 In ans/er to t#e PCGGs mot*onor lea.e to *le et*t*on or *nter.ent*on, PALI *led *ts Comment t#ereto on 1anuar2 $(,

$00(, /#ereas t#e PSE *led *ts o/n Comment on 1anuar2 &', $00(6

On 9e+ruar2 &=, $00%, t#e PSE *led *ts Consol*dated Rel2 to t#e "omments oresondent PALI 4O"to+er $(, $00%5 and t#e Sol*"*tor General 4De"em+er &%, $00%56On ma2 $%, $00(, PALI *led *ts ReBo*nder to t#e sa*d "onsol*dated rel2 o PSE6

PSE su+m*ts t#at t#e Court o Aeals erred *n rul*n t#at t#e SEC #ad aut#or*t2to order t#e PSE to l*st t#e s#ares o PALI *n t#e sto"8 e)"#ane6 Under res*dent*alde"ree No6 0'&-A, t#e o/ers o t#e SEC o.er sto"8 e)"#anes are more l*m*ted as"omared to *ts aut#or*t2 o.er ord*nar2 "ororat*ons6 In "onne"t*on /*t# t#*s, t#eo/ers o t#e SEC o.er sto"8 e)"#anes under t#e Re.*sed Se"ur*t*es A"t arese"**"all2 enumerated, and t#ese do not *n"lude t#e o/er to re.erse t#e de"*s*onso t#e sto"8 e)"#ane6 Aut#or*t*es are *n a+undan"e e.en *n t#e Un*ted States, rom

/#*"# t#e "ountr2s se"ur*t2 ol*"*es are atterned, to t#e ee"t o *.*n t#e Se"ur*t*esComm*ss*on less "ontrol o.er sto"8 e)"#anes, /#*"# *n turn are *.en more lee-/a2*n ma8*n t#e de"*s*on /#et#er or not to allo/ "ororat*ons to oer t#e*r sto"8 to t#eu+l*" t#rou# t#e sto"8 e)"#ane6 T#*s *s *n a""ord /*t# t#e +us*ness Budment rule/#ere+2 t#e SEC and t#e "ourts are +arred rom *ntrud*n *nto +us*ness Budments o"ororat*ons, /#en t#e same are made *n ood a*t#6 T#e sa*d rule re"ludes t#ere.ersal o t#e de"*s*on o t#e PSE to den2 PALIs l*st*n al*"at*on, a+sent as#o/*n a +ad a*t# on t#e art o t#e PSE6 Under t#e l*st*n rule o t#e PSE, to /#*"#PALI #ad re.*ousl2 areed to "oml2, t#e PSE reta*ns t#e d*s"ret*on to a""et orreBe"t al*"at*ons or l*st*n6 T#us, e.en * an *ssuer #as "oml*ed /*t# t#e PSE l*st*nrules and re o Pres*dent*al De"ree 0'&-A, stand*n alone, *s enou# aut#or*t2 tou#old t#e SECs "#allened "ontrol aut#or*t2 o.er t#e et*t*oner PSE e.en as *tro.*des t#at t#e Comm*ss*on s#all #a.e a+solute Bur*sd*"t*on, suer.*s*on, and

"ontrol o.er all "ororat*ons, artners#*s or asso"*at*ons, /#o are t#e rantees or*mar2 ran"#*ses and@or a l*"ense or erm*t *ssued +2 t#e o.ernment to oerate *n


19/272

t#e P#*l**nes T#e SECs reulator2 aut#or*t2 o.er r*.ate "ororat*ons en"omassesa /*de mar*n o areas, tou"#*n nearl2 all o a "ororat*ons "on"erns6 T#*s aut#or*t2sr*ns rom t#e a"t t#at a "ororat*on o/es *ts e)*sten"e to t#e "on"ess*on o *ts"ororate ran"#*se rom t#e state6

T#e SECs o/er to loo8 *nto t#e su+Be"t rul*n o t#e PSE, t#ereore, ma2 +e*ml*ed rom or +e "ons*dered as ne"essar2 or *n"*dental to t#e "arr2*n out o t#eSECs e)ress o/er to *nsure a*r deal*n *n se"ur*t*es traded uon a sto"8 e)"#aneor to ensure t#e a*r adm*n*strat*on o su"# e)"#ane6 It *s, l*8e/*se, o+ser.ed t#at t#er*n"*al un"t*on o t#e SEC *s t#e suer.*s*on and "ontrol o.er "ororat*ons,artners#*s and asso"*at*ons /*t# t#e end *n .*e/ t#at *n.estment *n t#ese ent*t*esma2 +e en"ouraed and rote"ted, and t#e*r a"t*.*t*es ursued or t#e romot*on oe"onom*" de.eloment6

T#us, *t /as *n t#e alleed e)er"*se o t#*s aut#or*t2 t#at t#e SEC re.ersed t#ede"*s*on o t#e PSE to den2 t#e al*"at*on or l*st*n *n t#e sto"8 e)"#ane o t#er*.ate resondent PALI6 T#e SECs a"t*on /as a*rmed +2 t#e Court o Aeals6

e a*rm t#at t#e SEC *s t#e ent*t2 /*t# t#e r*mar2 sa2 as to /#et#er or notse"ur*t*es, *n"lud*n s#ares o sto"8 o a "ororat*on, ma2 +e traded or not *n t#esto"8 e)"#ane6 T#*s *s *n l*ne /*t# t#e SECs m*ss*on to ensure roer "oml*an"e/*t# t#e la/s, su"# as t#e Re.*sed Se"ur*t*es A"t and to reulate t#e sale andd*sos*t*on o se"ur*t*es *n t#e "ountr26 As t#e aellate "ourt e)la*ns:

Paramount ol*"2 also suorts t#e aut#or*t2 o t#e u+l*" resondentto re.*e/ et*t*oners den*al o t#e l*st*n6 ;e*n a sto"8 e)"#ane, t#eet*t*oner erorms a un"t*on t#at *s .*tal to t#e nat*onal e"onom2, as t#e+us*ness *s ae"ted /*t# u+l*" *nterest6 As a matter o a"t, *t #as oten+een sa*d t#at t#e e"onom2 mo.es on t#e +as*s o t#e r*se and all osto"8s +e*n traded6 ;2 *ts e"onom*" o/er, t#e et*t*oner "erta*nl2 "and*"tate /#*"# and #o/ man2 users are allo/ed to sell se"ur*t*es t#ru t#ea"*l*t*es o a sto"8 e)"#ane, * allo/ed to *nterret *ts o/n rules l*+erall2as *t ma2 lease6 Pet*t*oner "an e*t#er allo/ or den2 t#e entr2 to t#e mar8eto se"ur*t*es6 To reeat, t#e monool2, unless a""oman*ed +2 "ontrol,+e"omes su+Be"t to a+use #en"e, "ons*der*n u+l*" *nterest, t#en *ts#ould +e su+Be"t to o.ernment reulat*on6

T#e role o t#e SEC *n our nat*onal e"onom2 "annot +e m*n*m*7ed6 T#ele*slature, t#rou# t#e Re.*sed Se"ur*t*es A"t, Pres*dent*al De"ree No6 0'&-A, andot#er ert*nent la/s, #as entrusted to *t t#e ser*ous resons*+*l*t2 o enor"*n all la/sae"t*n "ororat*ons and ot#er orms o asso"*at*ons not ot#er/*se .ested *n someot#er o.ernment o*"e6

T#*s *s not to sa2, #o/e.er, t#at t#e PSEs manaement reroat*.es are undert#e a+solute "ontrol o t#e SEC6 T#e PSE *s, ater all, a "ororat*on aut#or*7ed +2 *ts"ororate ran"#*se to enae *n *ts roosed and dul2 aro.ed +us*ness6 One ot#e PSEs ma*n "on"erns, as su"#, *s st*ll t#e enerat*on o ro*t or *ts sto"8#olders6!oreo.er, t#e PSE #as all t#e r*#ts erta*n*n to "ororat*ons, *n"lud*n t#e r*#t tosue and +e sued, to #old roert2 *n *ts o/n name, to enter 4or not to enter5 *nto

"ontra"ts /*t# t#*rd ersons, and to erorm all ot#er leal a"ts /*t#*n *ts allo"atede)ress or *ml*ed o/ers6

A "ororat*on *s +ut an asso"*at*on o *nd*.*duals, allo/ed to transa"t under anassumed "ororate name, and /*t# a d*st*n"t leal ersonal*t26 In oran*7*n *tsel asa "olle"t*.e +od2, *t /a*.es no "onst*tut*onal *mmun*t*es and er


20/272

t#rou# *n.estment ser.*"es and e)ert *n.estors, /*ll tend to rodu"e amore a""urate ara*sal o a se"ur*t26 ) ) )6 T#us, t#e Comm*ss*on ma2reuse to erm*t a re*strat*on statement to +e"ome ee"t*.e * *t aearson *ts a"e to +e *n"omlete or *na""urate *n an2 mater*al rese"t, andemo/er t#e Comm*ss*on to *ssue a sto order susend*n t#eee"t*.eness o an2 re*strat*on statement /#*"# *s ound to *n"lude an2untrue statement o a mater*al a"t or to om*t to state an2 mater*al a"tre


21/272

4.*5 does not "ondu"t * ts +us*ness *na""ordan"e /*t# la/ or *s enaed *n a +us*ness t#at*s *lleal or "ontrar2 or o.ernment rules andreulat*ons6

4>5 T#e enterr *se or t#e +us*ness o t#e *ssuer *snot s#o/n to +e sound or to +e +ased on sound +us*nessr*n"*les

435 An o*"er, mem+er o t#e +oard o d*re"tors, orr*n"*al sto"8#older o t#e *ssuer *s d*s


22/272

9IRST DIVISION

7&.R. No. >8. A*=*st 8, 99?> o t#e Re*onal Tr*al Court o Ilo*lo C*t2*n Cr*m*nal Cases Nos6 >('0( and >('0 or estaa and als**"at*on o a u+l*"do"ument, rese"t*.el26 T#e Budment a",=''6''@mont#, Cororate

Treasurer - P>,=''6''@mont# and Cororate Se"retar2 -P>,=''6''@mont#, retroa"t*.e 1une $, $0= and t#e ten

er"entum o t#e net ro*ts s#all +e d*str*+uted e> o t#e Re*onal Tr*alCourt o Ilo*lo C*t26 T#e "#are or als**"at*on o u+l*" do"ument /as an"#ored ont#e r*.ate resondents su+m*ss*on o ITs *n"ome statement or t#e *s"al 2ear$0=-$0% /*t# t#e Se"ur*t*es and E)"#ane Comm*ss*on 4SEC5 rele"t*n t#ere*n t#ed*s+ursement o "ororate unds or t#e "omensat*on o r*.ate resondents +asedon Resolut*on No6 3, ser*es o $0%, ma8*n *t aear t#at t#e same /as assed +2t#e +oard on !ar"# >', $0%, /#en *n trut#, t#e same /as a"tuall2 assed on 1une $,$0%, a date not "o.ered +2 t#e "ororat*ons *s"al 2ear $0=-$0% 4+e*nn*n !a2 $,$0= and end*n Ar*l >', $0%56 T#e *normat*on or als**"at*on o a u+l*" do"umentstates:

T#e unders*ned C*t2 Prose"utor a""uses RICARDO T6 SALAS,SALVADOR T6 SALAS, SOLEDAD SALAS-TU;ILLE1A, ANTONIO S6SALAS and RIC?ARD S6 SALAS 4/#ose dates and la"es o +*rt# "annot+e as"erta*ned5 o t#e "r*me o 9ALSI9ICATION O9 A PU;LCDOCU!ENT, Art6 $($ o t#e Re.*sed Penal Code, "omm*tted as ollo/s:

T#at on or a+out t#e $'t#da2 o 1une, $0%, *n t#e C*t2 oIlo*lo, P#*l**nes and /*t#*n t#e Bur*sd*"t*on o t#*s ?onora+leCourt, t#e a+o.e-named a""used, +e*n t#en t#e C#a*rman,V*"e-C#a*rman, Treasurer, Se"retar2 and Trustee 4/#o later+e"ame t#e se"retar25, rese"t*.el2, o t#e +oard o trustees ot#e estern Inst*tute o Te"#nolo2, In"6, a "ororat*on dul2oran*7ed and e)*st*n under t#e la/s o t#e Reu+l*" o t#eP#*l**nes, "ons*r*n and "onederat*n toet#er and mutuall2#el*n one anot#er, to +etter real*7ed 4s*"5 t#e*r urose, d*d

t#en and t#ere /*lull2, unla/ull2 and "r*m*nall2 reare and


23/272

e)e"ute and su+se$=, ar $4+5 o t#e Re.*sedPenal Code, "omm*tted as ollo/s:

T#at on or a+out t#e $stda2 o 1une, $0%, *n t#e C*t2 oIlo*lo, P#*l**nes and /*t#*n t#e Bur*sd*"t*on o t#*s ?onora+leCourt, t#e a+o.e-named a""used, +e*n t#en t#e C#a*rman,V*"e-C#a*rman, Treasurer, Se"retar2 and Trustee 4/#o later+e"ame t#e se"retar25, rese"t*.el2, o t#e +oard o trustees ot#e estern Inst*tute o Te"#nolo2, In"6, a "ororat*on dul2oran*7ed and e)*st*n under t#e la/s o t#e Reu+l*" o t#eP#*l**nes, "ons*r*n and "onederat*n toet#er and mutuall2#el*n one anot#er, to +etter real*7e t#e*r urose, d*d t#en

and t#ere /*lull2, unla/ull2 and elon*ousl2 deraud t#e sa*d"ororat*on 4and *ts sto"8#olders5 *n t#e ollo/*n manner, to/*t : herein accused, 1noing ull ell that the ha"e nosuicient, laul authorit to dis(urse--- let alone "iolation oapplica(le las and +urisprudence, dis(ursed the unds o thecorporation ( eecting pa!ent o their retroacti"e salaries inthe a!ount o '%8,7$.7$ and su(se)uentl paingthe!sel"es e"er %#thand 3$tho the !onth starting June %#,%B8 until the present,*n t#e amount o P$0,=''6'' er mont#,as * t#e same /ere t#e*r o/n, and /#en #ere*n a""used /ere*normed o t#e *lleal*t2 o t#ese d*s+ursements +2 t#e m*nor*t2sto"8#olders +2 /a2 o o+Be"t*ons made *n an annualsto"8#olders meet*n #eld on 1une $3, $0% and e.er2 2ear

t#ereater, t#e2 reused, and st*ll reuse, to re"t*2 t#e same tothe da!age and pre+udice o the corporation 4and *ts

sto"8#olders5 in the total su! o '%,#3,B7$.7B as o No"e!(er%#, %BB%.

CONTRARK TO LA6

Ilo*lo C*t2, P#*l**nes, No.em+er &&,$00$6 Unders"or*n oursH

T#ereater, tr*al or t#e t/o "r*m*nal "ases, do"8eted as Cr*m*nal Cases Nos6>('0( and >('0, /as "onsol*dated6 Ater a ull-+lo/n #ear*n, 1ude Por*r*o Par*an

#anded do/n a .erd*"t o a"


24/272

T#ere *s no arument t#at d*re"tors or trustees, as t#e "ase ma2 +e, are notent*tled to salar2 or ot#er "omensat*on /#en t#e2 erorm not#*n more t#an t#eusual and ord*nar2 dut*es o t#e*r o*"e6 T#*s rule *s ounded uon a resumt*on t#atd*re"tors @trustees render ser.*"e ratu*tousl2 and t#at t#e return uon t#e*r s#aresade' /#*"# states: ))) TH#e d*re"tors s#all not re"e*.e an2 "omensat*on, assuch directors,)))6 T#e #rase as such directors*s not /*t#out s*n**"an"e or *tdel*m*ts t#e s"oe o t#e ro#*+*t*on to "omensat*on *.en to t#em or ser.*"eserormed urel2 *n t#e*r "aa"*t2 as d*re"tors or trustees6 T#e unam+*uous*ml*"at*on *s t#at mem+ers o t#e +oard ma2 re"e*.e "omensat*on, *n add*t*on toreasona+le er d*ems, /#en t#e2 render ser.*"es to t#e "ororat*on *n a "aa"*t2ot#er t#an as d*re"tors@trustees6 In t#e "ase at +en"#, Resolut*on No6 3, s6 $0%ranted mont#l2 "omensat*on to r*.ate resondents not *n t#e*r "aa"*t2 asmem+ers o t#e +oard, +ut rat#er as o*"ers o t#e "ororat*on, more art*"ularl2 asC#a*rman, V*"e-C#a*rman, Treasurer and Se"retar2 o estern Inst*tute o

Te"#nolo26 e ', $0% *s true and "orre"t to t#e +est o m2 8no/lede and +el*e6

4Sd5ANTONIO S6 SALAS

Cororate Se"retar2 Unders"or*n oursH

Clearl2, t#ereore , t#e ro#*+*t*on /*t# rese"t to rant*n "omensat*on to "ororated*re"tors@trustees as suchunder Se"t*on >' *s not .*olated *n t#*s art*"ular "ase6Conse' /#*"# ro.*des:

))) )))6 In no "ase s#all t#e total 2earl2 "omensat*on o d*re"tors,as such directors, e)"eed ten D%$E percent o the net inco!e (eore

inco!e ta* o t#e "ororat*on dur*n t#e re"ed*n 2ear6 Unders"or*n

oursH

does not l*8e/*se *nd al*"at*on *n t#*s "ase s*n"e t#e "omensat*on *s +e*n *.ento r*.ate resondents *n t#e*r "aa"*t2 as o*"ers o IT and not as +oard mem+ers6

Pet*t*oners assert t#at t#e *nstant "ase *s a der*.at*.e su*t +rou#t +2 t#em asm*nor*t2 s#are#olders o IT or and on +e#al o t#e "ororat*on to annul Resolut*onNo6 3, s6 $0% /#*"# *s reBud*"*al to t#e "ororat*on6

e are unersuaded6 A der*.at*.e su*t *s an a"t*on +rou#t +2 m*nor*t2s#are#olders *n t#e name o t#e "ororat*on to redress /rons "omm*tted aa*nst *t,or /#*"# t#e d*re"tors reuse to sue6 It *s a remed2 des*ned +2 e('0( and >('0 *led /*t# t#e RTC o Ilo*lo or estaaand als**"at*on o u+l*" do"ument6 Amon t#e +as*" re


25/272

to #ear and de"*de "ases *n.ol.*n:

))) ))) )))

+5 Contro"ersies arising out o intra-corporate or artners#*relations, +et/een and amon sto"8#olders, mem+ers, or asso"*ates(eteen an or all o the! and the corporation,artners#* or asso"*at*ono /#*"# t#e2 are sto"8#olders, mem+ers or asso"*ates, rese"t*.el2 and+et/een su"# "ororat*on, artners#* or asso"*at*on and t#e State *nsoaras *t "on"erns t#e*r *nd*.*dual ran"#*se or r*#t to e)*st as su"# ent*t2

))) ))) )))6 Unders"or*n oursH

On"e t#e "ase *s de"*ded +2 t#e SEC, t#e los*n art2 ma2 *le a et*t*on or re.*e/+eore t#e Court o Aeals ra*s*n


26/272

declaration in a inal +udg!ent that the act ro! hich the ci"il!ight arise did not e*ist. Unders"or*n oursH

L*8e/*se, t#e last arara# o Se"t*on &, Rule $&' reads:

SEC6 &6 9orm and "ontents o Budment6

))) ))) )))

In "ase o a"


27/272

Reu+l*" o t#e P#*l**nesSPRE#E CORT!an*la

EN ;ANC

&.R. No. L(00>; A*=*st :, 9/?

T+E $OARD OF LIBIDATORS represent'n= T+E &OVERN#ENT OF T+E

REP$LIC OF T+E P+ILIPPINES, la*nt*-aellant,.s6+EIRS OF #A@I#O #. %ALA6,8AN $OCAR, ESTATE OF T+E DECEASEDCASI#IRO &ARCIA,"nd LEONOR #OLL,deendants-aellees6

Si!eon . Gopengco and Solicitor General or plainti-appellant.>. :. :ernande, !!a Iuisu!(ing, &ernando and Iuisu!(ing, Jr. 'once nrile,Siguion Rena, ontecillo and 5elo or deendants-appellees.

SANC+E!, J.#

T#e Nat*onal Co"onut Cororat*on 4NACOCO, or s#ort5 /as "#artered as a non-ro*to.ernmental oran*7at*on on !a2 (, $03' +2 Common/ealt# A"t =$ a.o/edl2 or

t#e rote"t*on, reser.at*on and de.eloment o t#e "o"onut *ndustr2 *n t#eP#*l**nes6 On Auust $, $03%, NACOCOs "#arter /as amended Reu+l*" A"t =H torant t#at "ororat*on t#e e)ress o/er to +u2, sell, +arter, e)ort, and *n an2 ot#ermanner deal *n, "o"onut, "ora, and dess*"ated "o"onut, as /ell as t#e*r +2-rodu"ts,and to a"t as aent, +ro8er or "omm*ss*on mer"#ant o t#e rodu"ers, dealers ormer"#ants t#ereo6 T#e "#arter amendment /as ena"ted to sta+*l*7e "ora r*"es, toser.e "o"onut rodu"ers +2 se"ur*n ad.antaeous r*"es or t#em, to "ut do/n to am*n*mum, * not altoet#er el*m*nate, t#e mar*n o m*ddlemen, mostl2 al*ens63

General manaer and +oard "#a*rman /as !a)*mo !6 Jala/ deendants 1uan;o"ar and Cas*m*ro Gar"*a /ere mem+ers o t#e ;oard deendant Leonor !oll+e"ame d*re"tor onl2 on De"em+er &&, $03(6

NACOCO, ater t#e assae o Reu+l*" A"t =, em+ar8ed on "ora trad*n a"t*.*t*es6Amonst t#e s"ores o "ontra"ts e)e"uted +2 eneral manaer Jala/ are t#ed*suted "ontra"ts, or t#e del*.er2 o "ora, "i:

4a5 1ul2 >', $03(: Ale)ander Adamson F Co6, or &,''' lon tons,$%(6'': er ton, 6 o6 +6, del*.er2: Auust and Setem+er, $03(6T#*s "ontra"t /as later ass*ned to Lou*s Dre2us F Co6 4O.erseas5Ltd6

4+5 Auust $3, $03(: Ale)ander Adamson F Co6, or &,''' lon tons$3=6'' er lon ton, 6o6+6, P#*l**ne orts, to +e s#*ed:Setem+er-O"to+er, $03(6 T#*s "ontra"t /as also ass*ned toLou*s Dre2us F Co6 4O.erseas5 Ltd6

4"5 Auust &&, $03(: Pa"**" Veeta+le Co6, or >,''' tons, $>(6='er ton, del*.er2: Setem+er, $03(6

4d5 Setem+er =, $03(: Sen"er Jello F Sons, or $,''' lon tons,$%'6'' er ton, "6*66, Los Aneles, Cal*orn*a, del*.er2: No.em+er,$03(6

4e5 Setem+er 0, $03(: 9ran8l*n ;a8er D*.*s*on o General 9oodsCororat*on, or $,='' lon tons, $%3,'' er ton, "6*66, Ne/ Kor8,to +e s#*ed *n No.em+er, $03(6

45 Setem+er $&, $03(: Lou*s Dre2us F Co6 4O.erseas5 Ltd6, or>,''' lon tons, $=36'' er ton, 6o6+6, > P#*l**ne orts, del*.er2:No.em+er, $03(6

45 Setem+er $>, $03(: 1uan CoBuan"o, or &,''' tons, $(=6''er ton, del*.er2: No.em+er and De"em+er, $03(6 T#*s "ontra"t/as ass*ned to Pa"**" Veeta+le Co6

4#5 O"to+er &(, $03(: 9a*r/ood F Co6, or $,''' tons, &$'6'' ers#ort ton, "6*66, Pa"**" orts, del*.er2: De"em+er, $03( and1anuar2, $036 T#*s "ontra"t /as ass*ned to Pa"**" Veeta+le Co6

4*5 O"to+er &, $03(: 9a*r/ood F Co6, or $,''' tons, &$'6'' ers#ort ton, "6*66, Pa"**" orts, del*.er2: 1anuar2, $036 T#*s "ontra"t/as ass*ned to Pa"**" Veeta+le Co6

An un#a2 "#a*n o e.ents "ons*red to deter NACOCO rom ul*ll*n t#ese"ontra"ts6 Nature suer.ened6 9our de.astat*n t2#oons .*s*ted t#e P#*l**nes: t#e*rst *n O"to+er, t#e se"ond and t#*rd *n No.em+er, and t#e ourt# *n De"em+er, $03(6Co"onut trees t#rou#out t#e "ountr2 suered e)tens*.e damae6 Cora rodu"t*onde"reased6 Pr*"es s*ralled6 are#ouses /ere destro2ed6 Cas# re


28/272

5uers /ons 6eli"ered ?ndeli"ered

Pa"**" Veeta+le O*l &,>%63= 3,%$>6==

Sen"er Jello None $,'''

9ran8l*n ;a8er $,''' =''

Lou*s Dre2us '' &,&''

Lou*s Dre2us 4Adamson "ontra"t o 1ul2 >',$03(5

$,$=' ='

Lou*s Dre2us 4Adamson Contra"t o Auust $3,$03(5

$,(== &3=

T O T A L S (,'0$63= 0,3'6==

T#e +u2ers t#reatened damae su*ts6 Some o t#e "la*ms /ere settled, "i: Pa"**"Veeta+le O*l Co6, *n "ora del*.ered +2 NACOCO, P=>0,'''6'' 9ran8l*n ;a8erCororat*on, P(,&$'6'' Sen"er Jello F Sons, P$=0,'3'6''6

;ut one +u2er, Lou*s Dre2us F Go6 4O.erseas5 Ltd6, d*d *n a"t sue +eore t#e Courto 9*rst Instan"e o !an*la, uon "la*ms as ollo/s: 9or t#e undel*.ered "ora undert#e 1ul2 >' "ontra"t 4C*.*l Case 33=05 P&(,'&6'' or t#e +alan"e on t#e Auust $3"ontra"t 4C*.*l Case 3>05, P(=,'06%> or t#at er t#e Setem+er $& "ontra"t

redu"ed to Budment 4C*.*l Case 3>&&, aealed to t#*s Court *n L-&&05,P33(,0'63'6 T#ese "ases "ulm*nated *n an out-o-"ourt am*"a+le settlement /#ent#e Jala/ manaement /as alread2 out6 T#e "ororat*on t#ereunder a*d Dre2usP=%(,'&36=& reresent*n ('M o t#e total "la*ms6 *t# art*"ular reeren"e to t#eDre2us "la*ms, NACOCO ut u t#e deenses t#at: 4$5 t#e "ontra"ts /ere .o*d+e"ause Lou*s Dre2us F Co6 4O.erseas5 Ltd6 d*d not #a.e l*"ense to do +us*ness#ere and 4&5 a*lure to del*.er /as due toorce !a+eure, t#e t2#oons6 To roBe"t t#eutter unreasona+leness o t#*s "omrom*se, /e rerodu"e in haec "er(a t#*s *nd*n+elo/:

) ) ) ?o/e.er, *n s*m*lar "ases +rou#t +2 t#e same "la*mant Lou*sDre2us F Co6 4O.erseas5 Ltd6H aa*nst Sant*ao S2Bu"o or non-del*.er2 o "ora also *n.ol.*n a "la*m o P>3=,%=36% /#ere*n

deendant set u sa!e deenses as a+o.e, la*nt* a""eted apro!ise o P=,'''6'' onl2 4E)#s6 >$ F >& ?e*rs65 9ollo/*n t#e

same roort*on, t#e "la*m o Dre2us aa*nst NACOCO s#ould#a.e +een "omrom*sed or onl2 P$','''6'', * at all6 No/, /#2s#ould deendants +e #eld l*a+le or t#e lare sum a*d as"omrom*se +2 t#e ;oard o L*i)uidators disposed o theNAC@C@ unds, although there as !uch possi(ilit osuccessull resisting the clai!s, or at least settle!ent or no!inalsu!s li1e hat happened in the S+uco case6=

All t#e settlements sum u to P$,>3>,&(36=&6

In t#*s su*t started *n 9e+ruar2, $030, NACOCO see8s to re"o.er t#e a+o.e sum oP$,>3>,&(36=& rom eneral manaer and +oard "#a*rman !a)*mo !6 Jala/, andd*re"tors 1uan ;o"ar, Cas*m*ro Gar"*a and Leonor !oll6 It "#ares Jala/ /*t#nel*en"e under Art*"le $0'& o t#e old C*.*l Code 4no/ Art*"le &$(%, ne/ C*.*lCode5 and deendant +oard mem+ers, *n"lud*n Jala/, /*t# +ad a*t# and@or +rea"#o trust or #a.*n aro.ed t#e "ontra"ts6 T#e *t# amended "omla*nt, on /#*"# t#*s"ase /as tr*ed, /as *led on 1ul2 &, $0=06 Deendants res*sted t#e a"t*on uondeenses #ere*nater *n t#*s o*n*on to +e d*s"ussed6

T#e lo/er "ourt "ame out /*t# a Budment d*sm*ss*n t#e "omla*nt /*t#out "osts as/ell as deendants "ounter"la*ms, e)"et t#at la*nt* /as ordered to a2 t#e #e*rs o

!a)*mo Jala/ t#e sum o P&,%'$603 or una*d salar*es and "as# deos*t due t#ede"eased Jala/ rom NACOCO6

Pla*nt* aealed d*re"t to t#*s Court6

Pla*nt*s +r*e d*d not,


29/272

d*.*de *ts "a*tal sto"8, +ut not or t#e urose o "ont*nu*n t#e +us*ness or /#*"# *t/as esta+l*s#ed and 4>5 under Se"t*on ( o t#e Cororat*on La/, +2 .*rtue o /#*"#t#e "ororat*on, /*t#*n t#e t#ree 2ear er*od Bust ment*oned, *s aut#or*7ed andemo/ered to "on.e2 all o *ts roert2 to trustees or t#e +ene*t o mem+ers,sto"8#olders, "red*tors, and ot#ers *nterested6

It *s deendants ose t#at t#e*r "ase "omes /*t#*n t#e "o.erae o t#e se"ondmet#od6 T#e2 reason out t#at su*t /as "ommen"ed *n 9e+ruar2, $030 t#at +2E)e"ut*.e Order >(&, dated No.em+er &3, $0=', NACOCO, toet#er /*t# ot#ero.ernment-o/ned "ororat*ons, /as a+ol*s#ed, and t#e ;oard o L*(& ro.*des*n Se"t*on $ t#ereo t#at

Se"6$6 T#e Nat*onal A+a"a and Ot#er 9*+ers Cororat*on, t#eNat*onal Co"onut Cororat*on, t#e Nat*onal To+a""o Cororat*on,t#e Nat*onal 9ood Produ"er Cororat*on and t#e ormer enem2-o/ned or "ontrolled "ororat*ons or asso"*at*ons, 6 6 6 are #ere+2a+ol*s#ed6 T#e sa*d "ororat*ons s#all +e l*0'->0$56 Corpus Juris Secundu! l*8e/*se *s aut#or*t2 or t#e statement t#attH#e d*ssolut*on o a "ororat*on ends *ts e)*sten"e so t#at t#ere must +e statutor2aut#or*t2 or rolonat*on o *ts l*e e"en or purposes o pending litigation0and t#at

su*t "annot +e "ont*nued or re.*.ed nor "an a .al*d Budment +e rendered t#ere*n,and a Budment, * rendered, *s not onl2 erroneous, +ut .o*d and su+Be"t to "ollateralatta"86 $'So *t *s, t#at a+atement o end*n a"t*ons ollo/s as a matter o "ourseuon t#e e)*rat*on o t#e leal er*od or l*


30/272

e*istence ater the e*piration o the period o three435 ears or the settle!ent o itsaairs is hat i!pelled the 'resident to create a 5oard o >i)uidators, to continue the!anage!ent o such !atters as !a then (e pending6 $=e a""ord*nl2 d*re"tedt#e re"ord o sa*d "ase to +e returned to t#e lo/er "ourt, /*t# *nstru"t*ons to adm*tla*nt*s amended "omla*nt to *n"lude, as art2 la*nt*, t#e ;oard o L*', $0%&6 T#ere, la*nt*s sou#t to re"o.er damaes rom deendant Llemos6 T#e"omla*nt a.erred t#at Llemos #ad ser.ed la*nt* +2 re*stered ma*l /*t# a "o2 o aet*t*on or a /r*t o ossess*on *n C*.*l Case 3&3 o t#e Court o 9*rst Instan"e atCat+aloan, Samar, /*t# not*"e t#at t#e same /ould +e su+m*tted to t#e Samar "ourton 9e+ruar2 &>, $0%' at :'' a6m6 t#at *n .*e/ o t#e "o2 and not*"e ser.ed,la*nt*s ro"eeded to t#e sa*d "ourt o Samar rom t#e*r res*den"e *n !an*la

a""oman*ed +2 t#e*r la/2ers, onl2 to d*s"o.er t#at no su"# et*t*on #ad +een *ledand t#at deendant Llemos mal*"*ousl2 a*led to aear *n "ourt, so t#at la*nt*s

e)end*ture and trou+le turned out to +e *n .a*n, "aus*n t#em mental anu*s# andundue em+arrassment6 Deendant d*ed +eore #e "ould ans/er t#e "omla*nt6 Uonlea.e o "ourt, la*nt*s amended t#e*r "omla*nt to *n"lude t#e #e*rs o t#e de"eased6T#e #e*rs mo.ed to d*sm*ss6 T#e "ourt d*sm*ssed t#e "omla*nt on t#e round t#at t#eleal reresentat*.e, and not t#e #e*rs, s#ould #a.e +een made t#e art2 deendantand t#at, an2/a2, t#e a"t*on +e*n or re"o.er2 o mone2, testate or *ntestatero"eed*ns s#ould +e *n*t*ated and t#e "la*m *led t#ere*n6 T#*s Court, t#ru !r6 1ust*"e1ose ;6 L6 Re2es, t#ere de"lared:

Pla*nt*s arue /*t# "ons*dera+le "oen"2 t#at "ontrast*n t#e

"orrelated ro.*s*ons o t#e Rules o Court, t#ose "on"ern*n "la*mst#at are +arred * not *led *n t#e estate settlement ro"eed*ns4Rule (, se"6 =5 and t#ose de*n*n a"t*ons t#at sur.*.e and ma2+e rose"uted aa*nst t#e e)e"utor or adm*n*strator 4Rule , se"6$5, *t *s aarent t#at a"t*ons or damaes "aused +2 tort*ous"ondu"t o a deendant 4as *n t#e "ase at +ar5 sur.*.e t#e deat# ot#e latter6 Under Rule (, se"t*on =, t#e a"t*ons t#at are a+ated +2deat# are: 4$5 "la*ms or uneral e)enses and t#ose or t#e lasts*"8ness o t#e de"edent 4&5 Budments or mone2 and 4>5 all"la*ms or mone2 aa*nst t#e de"edent, arising ro! contracte*press or i!plied6 None o t#ese *n"ludes t#at o t#e la*nt*s-aellants or *t *s not enou# t#at t#e "la*m aa*nst t#e de"easedart2 +e or mone2, +ut *t must ar*se rom "ontra"t e)ress or

*ml*ed, and t#ese /ords 4also used +2 t#e Rules *n "onne"t*on/*t# atta"#ments and der*.ed rom t#e "ommon la/5 /ere"onstrued *n >eung 5en "s. @K5rien, > P#*l6 $&, $0-$03,

to *n"lude all urel2 ersonal o+l*at*ons other t#an t#ose/#*"# #a.e t#e*r sour"e *n delictor tort6

Uon t#e ot#er #and, Rule , se"t*on $, enumerates a"t*ons t#atsur.*.e aa*nst a de"edents e)e"utors or adm*n*strators, and t#e2are: 4$5 a"t*ons to re"o.er real and ersonal roert2 rom t#eestate 4&5 a"t*ons to enor"e a l*en t#ereon and 4>5 a"t*ons tore"o.er damaes or an *nBur2 to erson or roert26 T#e resentsu*t *s one or damaes under t#e last "lass, *t #a.*n +een #eld

t#at *nBur2 to roert2 *s not l*m*ted to *nBur*es to se"**" roert2,+ut e)tends to ot#er /rons +2 /#*"# ersonal estate *s *nBured ord*m*n*s#ed 4;a8er .s6 Crandall, 3( Am6 Re6 $&% also $($ A6L6R6,$>0=56 To mal*"*ousl2 "ause a art2 to *n"ur unne"essar2 e)enses,as "#ared *n t#*s "ase, *s "erta*nl2 *nBur2 to t#at art2s roert241a.*er .s6 Araneta, L-3>%0, Au6 >$, $0=>56

T#e rul*n *n t#e re"ed*n "ase /as #ammered out o a"ts "omara+le to t#ose ot#e resent6 No "oent reason e)*sts /#2 /e s#ould +rea8 a/a2 rom t#e .*e/s Buste)ressed6 And, t#e "on"lus*on rema*ns: A"t*on aa*nst t#e Jala/ #e*rs and, or t#ematter, aa*nst t#e Estate o Cas*m*ro Gar"*a sur.*.es6

T#e rel*m*nar*es out o t#e /a2, /e no/ o to t#e "ore o t#e "ontro.ers26


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>6 Pla*nt* le.elled a maBor atta"8 on t#e lo/er "ourts #old*n t#at Jala/ Bust**edl2entered *nto t#e "ontro.erted "ontra"ts /*t#out t#e r*or aro.al o t#e "ororat*onsd*re"torate6 Pla*nt* leans #ea.*l2 on NACOCOs "ororate +2-la/s6 Art*"le IV 4+5,C#ater III t#ereo, re"*tes, as amonst t#e dut*es o t#e eneral manaer, t#eo+l*at*on: 4+5 To erorm or e)e"ute on +e#al o t#e Cororat*on uon r*or aro.alo t#e ;oard, all "ontra"ts ne"essar2 and essent*al to t#e roer a""oml*s#ment or/#*"# t#e Cororat*on /as oran*7ed6

Not o de !ini!is *mortan"e *n a roer aroa"# to t#e ro+lem at #and, *s t#enature o a eneral manaers os*t*on *n t#e "ororate stru"ture6 A rule t#at #as

a*ned a""etan"e t#rou# t#e 2ears *s t#at a "ororate o*"er *ntrusted /*t# t#eeneral manaement and "ontrol o *ts +us*ness, #as *ml*ed aut#or*t2 to ma8e an2"ontra"t or do an2 ot#er a"t /#*"# *s ne"essar2 or aror*ate to t#e "ondu"t o t#eord*nar2 +us*ness o t#e "ororat*on6 &$As su"# o*"er, #e ma2, /*t#out an2 se"*alaut#or*t2 rom t#e ;oard o D*re"tors erorm all a"ts o an ord*nar2 nature, /#*"# +2usae or ne"ess*t2 are *n"*dent to #*s o*"e, and ma2 +*nd t#e "ororat*on +2"ontra"ts *n matters ar*s*n *n t#e usual "ourse o +us*ness6 &&

T#e ro+lem, t#ereore, *s /#et#er t#e "ase at +ar *s to +e ta8en out o t#e eneral"on"et o t#e o/ers o a eneral manaer, *.en t#e "*ted ro.*s*on o t#eNACOCO +2-la/s re


32/272

In t#e +oard meet*n o 1ul2 &0, $03(, Jala/ reorted on t#e "ora r*"e "ond*t*onst#en "urrent: T#e "ora mar8et aeared to #a.e +e"ome a*rl2 stead2 *t /as note)e"ted t#at "ora r*"es /ould aa*n r*se .er2 #*# as *n t#e unre"edented +oomdur*n 1anuar2-Ar*l, $03( t#e r*"es seemed to os"*llate +et/een $3' to $=' erton a rad*"al r*se or de"rease /as not *nd*"ated +2 t#e trends6 Jala/ "ont*nued tosa2 t#at the Corporation has (een closing contracts or the sale o copraenerall2/*t# a mar*n o P=6'' to P(6'' er #undred 8*los6 &3

e no/ l*t t#e ollo/*n e)"erts rom t#e m*nutes o t#at same +oard meet*n o1ul2 &0, $03(:

=&$6 In "onne"t*on /*t# t#e +u2*n and sell*n o "ora t#e ;oard*n', $03, t#ou# *t *s our 4and t#e lo/er "ourts5 +el*et#at rat**"at*on #ere *s not#*n more t#an a mere ormal*t26

Aut#or*t*es, reat *n num+er, are one *n t#e *dea t#at rat**"at*on +2 a "ororat*on oan unaut#or*7ed a"t or "ontra"t +2 *ts o*"ers or ot#ers relates +a"8 to t#e t*me o t#ea"t or "ontra"t rat**ed, and *s e'T#e lanuae o one "ase*s e)ress*.e: T#e adot*on or rat**"at*on o a "ontra"t +2 a "ororat*on *s not#*nmore or less t#an t#e ma8*n o an or**nal "ontra"t6 T#e t#eor2 o "ororaterat**"at*on *spredicated on the right o a corporation to contract, and an2 rat**"at*onor adot*on *s e)ui"alent to a grant o prior authorit6 >$

Indeed, our la/ ronoun"es t#at rHat**"at*on "leanses t#e "ontra"t rom all *tsdee"ts rom t#e moment *t /as "onst*tuted6 >& ;2 "ororate "on*rmat*on, t#e"ontra"ts e)e"uted +2 Jala/ are t#us ured o /#ate.er .*"e or dee"t t#e2 ma2#a.e6 >>

In sum, a "ase *s #ere resented /#ereunder, e.en *n t#e a"e o an e)ress +2-la/re


33/272

Nor /as *t e.en *nt*mated #ere t#at t#e NACOCO d*re"tors a"ted or ersonalreasons, or to ser.e t#e*r o/n r*.ate *nterests, or to o"8et mone2 at t#e e)ense ot#e "ororat*on6 >=e #a.e #ad o""as*on to a*rm t#at +ad a*t# "ontemlates astate o m*nd a*rmat*.el2 oerat*n /*t# urt*.e des*n or /*t# some mot*.e o sel-*nterest or *ll /*ll or or ulter*or uroses6 >%5riggs "s. Spaulding, $3$ U6S6 $>&, $3-$30, >= L6 ed6 %%&, %%0, (

T#e d*re"tors are not l*a+le6 >

%6 To /#at t#en ma2 /e tra"e t#e damae suered +2 NACOCO6

T#e a"ts 2*eld t#e ans/er6 9our t2#oons /rea8ed #a.o" t#en on our "ora-rodu"*n re*ons6 Result: Cora rodu"t*on /as *ma*red, r*"es s*ralled,/are#ouses destro2ed6 u*"8 turno.ers "ould not +e e)e"ted6 NACOCO /as notalone *n t#*s m*sortune6 T#e re"ord d*s"loses t#at r*.ate traders, old, e)er*en"ed,/*t# +*er a"*l*t*es, /ere not sared also suered tremendous losses6 Rou#l2est*mated, ele.en r*n"*al trad*n "on"erns d*d run losses to a+out P$',>'','''6''6Pla*nt*s /*tness S*senando ;arretto, #ead o t#e "ora mar8et*n deartment o

NACOCO, o+ser.ed t#at rom late $03( to earl2 $03 t#ere /ere man2 /#o lostmone2 *n t#e trade6 >0NACOCO /as not *mmune rom su"# usual +us*ness r*s86

T#e t2#oons /ere 8no/n to la*nt*6 In a"t, NACOCO res*sted t#e su*ts *led +2Lou*s Dre2us F Co6 +2 lead*n *n *ts ans/ers orce !a+eure as an a*rmat*.edeense and t#ere .e#ementl2 asserted t#at as a result o t#e sa*d t2#oons,e)tens*.e damae /as "aused to t#e "o"onut trees *n t#e "ora rodu"*n re*ons ot#e P#*l**nes and a""ord*n to est*mates o "ometent aut#or*t*es, *t /*ll ta8e a+outone 2ear unt*l t#e "o"onut rodu"*n re*ons /*ll +e a+le to rodu"e t#e*r normal"o"onut 2*eld and *t /*ll ta8e some t*me unt*l t#e r*"e o "ora /*ll rea"# normalle.els and t#at *t #ad ne.er +een t#e *ntent*on o t#e "ontra"t*n art*es *n enter*n*nto t#e "ontra"t *n


34/272

*ts reular meet*n, ao*nted !a)*mo !6 Jala/ as a"t*n eneral manaer o t#e"ororat*on6

ell ma2 /e ro*t rom t#e ollo/*n assae rom onteli(ano "s. 5acolod-urciailling Co., nc6, L-$='0&, !a2 $, $0%&:

T#e2 4t#e d*re"tors5 #old su"# o*"e "#ared /*t# t#e dut2 to a"t or t#e "ororat*ona""ord*n to t#e*r +est Budment, and *n so do*n t#e2 "annot +e "ontrolled *n t#ereasona+le e)er"*se and erorman"e o su"# dut26 #et#er t#e +us*ness o a"ororat*on s#ould +e oerated at a loss dur*n a +us*ness deress*on, or "loseddo/n at a smaller loss, *s a urel2 +us*ness and e"onom*" ro+lem to +e determ*ned+2 t#e d*re"tors o t#e "ororat*on, and not +2 t#e "ourt6 It *s a /ell 8no/n rule o la/t#at 0'65 3

Jala/s ood a*t#, and t#at o t#e ot#er d*re"tors, "l*n"# t#e "ase or deendants6 30

V*e/ed *n t#e l*#t o t#e ent*re re"ord, t#e Budment under re.*e/ must +e, as *t *s#ere+2, a*rmed6

*t#out "osts6 So ordered6


35/272

Reu+l*" o t#e P#*l**nes

SPRE#E CORT

!an*la

T?IRD DIVISION

&.R. No. 09>?> #"y 0, 998

$EN&ET ELECTRlC COOPERATIVE, INC., et*t*oner,.s6

NATIONAL LA$OR RELATIONS CO##ISSION, PETER COSALAN "nd $OARD

OF DIRECTORS OF $EN&ET ELECTRIC COOPERATIVE, INC., resondents6

Ra!undo 4. Celino or respondent 'eter Cosalan.

Reenan @rate or respondent 5oard o 6irectors o 5NC@.

FELICIANO, J.#

Pr*.ate resondent Peter Cosalan /as t#e General !anaer o Pet*t*oner ;enuet

Ele"tr*" Cooerat*.e, In"6 4;ene"o5, #a.*n +een ele"ted as su"# +2 t#e ;oard oD*re"tors o ;ene"o, /*t# t#e aro.al o t#e Nat*onal Ele"tr**"at*on Adm*n*strator, !r6

Pedro Dumol, ee"t*.e $% O"to+er $0&6

On > No.em+er $0&, resondent Cosalan re"e*.ed Aud*t !emorandum No6 $ *ssued

+2 t#e Comm*ss*on on Aud*t 4COA56 T#*s !emorandum noted t#at "as# ad.an"es

re"e*.ed +2 o*"ers and emlo2ees o et*t*oner ;ene"o *n t#e amount o

P$&0,%$63 #ad +een .*rtuall2 /r*tten o *n t#e +oo8s o ;ene"o6 In t#e Aud*t

!emorandum, t#e COA d*re"ted et*t*oner ;ene"o to se"ure t#e aro.al o t#e

Nat*onal Ele"tr**"at*on Adm*n*strat*on 4NEA5 +eore /r*t*n o or "ondon*n t#ose

"as# ad.an"es, and re"ommended t#e adot*on o remed*al measures6

On $& No.em+er $0&, COA *ssued anot#er !emorandum Aud*t !emorandum

No6 & QQ addressed to resondent Peter Cosalan, *n.*t*n attent*on to t#e a"t t#at t#e

aud*t oper die!s and allo/an"es re"e*.ed +2 o*"*als and mem+ers o t#e ;oard o

D*re"tors o ;ene"o s#o/ed su+stant*al *n"ons*sten"*es /*t# t#e d*re"t*.es o t#e

NEA6 T#e Aud*t !emorandum on"e aa*n d*re"ted t#e ta8*n o *mmed*ate a"t*on *n

"onorm*t2 /*t# e)*st*n NEA reulat*ons6

On $0 !a2 $0>, et*t*oner ;ene"o re"e*.ed t#e COA Aud*t Reort on t#e *nan"*al

status and oerat*ons o ;ene"o or t#e e*#t 45 mont# er*od ended >' Setem+er

$0&6 T#*s Aud*t Reort noted and enumerated *rreular*t*es *n t#e ut*l*7at*on o unds

amount*n to P>( !*ll*on released +2 NEA to ;ene"o, and re"ommended t#at

aror*ate remed*al a"t*on +e ta8en6

?a.*n +een made a/are o t#e ser*ous *nan"*al "ond*t*on o ;ene"o and /#at

aeared to +e m*smanaement, resondent Cosalan *n*t*ated *mlementat*on o t#e

remed*al measures re"ommended +2 t#e COA6 T#e resondent mem+ers o t#e

;oard o ;ene"o rea"ted +2 adot*n a ser*es o resolut*ons dur*n t#e er*od rom &>

1une to &3 1ul2 $036 T#ese ;oard Resolut*ons a+ol*s#ed t#e #ous*n allo/an"e o

resondent Cosalan redu"ed #*s salar2 and #*s reresentat*on and "ommuta+le

allo/an"es d*re"ted #*m to #old *n a+e2an"e all end*n ersonnel d*s"*l*nar2

a"t*ons and stru"8 #*s name out as a r*n"*al s*nator2 to transa"t*ons o et*t*oner;ene"o6

Dur*n t#e er*od rom & 1ul2 to &= Setem+er $03, t#e resondent ;ene"o ;oard

mem+ers adoted anot#er ser*es o resolut*ons /#*"# resulted *n t#e ouster o

resondent Cosalan as General !anaer o ;ene"o and #*s e)"lus*on rom

erorman"e o #*s reular dut*es as su"#, as /ell as t#e /*t##old*n o #*s salar2 and

allo/an"es6 T#ese resolut*ons /ere as ollo/s:

$6 Resolut*on No6 0$-3 dated & 1ul2 $03:

6 6 6 t#at t#e ser.*"es o Peter !6 Cosalan asGeneral !anaer o ;ENECO *s term*nated uon

aro.al o t#e Nat*onal Ele"tr**"at*on

Adm*n*strat*on

&6 Resolut*on No6 $=$-3 dated Setem+er $=, $03

6 6 6 t#at Peter !6 Cosalan *s #ere+2 susended

rom #*s os*t*on as General !anaer o t#e

;enuet Ele"tr*" Cooerat*.e, In"6 4;ENECO5

ee"t*.e as o t#e start o t#e o*"e #ours on

Setem+er &3, $03, unt*l a *nal de"*s*on #as

+een rea"#ed +2 t#e NEA on #*s d*sm*ssal


36/272

6 6 6 t#at G! Cosalans susens*on rom o*"e

s#all rema*n *n ull or"e and ee"t unt*l su"#

susens*on *s sooner l*ted, re.o8ed or res"*nded

+2 t#e ;oard o D*re"tors t#at all mon*es due #*m

are /*t##eld unt*l "leared

>6 Resolut*on No6 $(%-3 dated Setem+er &=, $03

6 6 6 t#at Resolut*on No6 $=$-3, dated Setem+er$=, $03 stands as re.ent*.e susens*on or

G! Peter !6 Cosalan6

Resondent Cosalan ne.ert#eless "ont*nued to /or8 as General !anaer o ;ene"o,

*n t#e +el*e t#at #e "ould +e susended or remo.ed onl2 +2 dul2 aut#or*7ed o*"*als

o NEA, *n a""ordan"e /*t# ro.*s*ons o P6D6 No, &%0, as amended +2 P6D6 No6 $%3=

4t#e statute "reat*n t#e NEA, ro.*d*n or *ts "a*tal*7at*on, o/ers and un"t*ons

and oran*7at*on5, t#e loan areement +et/een NEA and et*t*oner ;ene"o 8and t#e

NEA !emorandum o & 1ul2 $0'6 A""ord*nl2, on = O"to+er and $' No.em+er

$03, resondent Cosalan re5 2ears /*t#out dedu"t*on or


37/272

T#ere, /as, t#ereore, no reason rounded uon su+stant*al Bust*"e and t#e

re.ent*on o ser*ous m*s"arr*ae o Bust*"e t#at m*#t #a.e Bust**ed t#e NLRC *n

d*sreard*n t#e ten-da2 relementar2 er*od or ere"t*on o an aeal +2 t#e

resondent ;oard mem+ers6 A""ord*nl2, t#e al*"a+le rule /as t#at t#e ten-da2

relementar2 er*od to ere"t an aeal *s mandator2 and Bur*sd*"t*onal *n nature,

t#at a*lure to *le an aeal /*t#*n t#e relementar2 er*od renders t#e assa*led

de"*s*on *nal and e)e"utor2 and no loner su+Be"t to re.*e/6 ?T#e resondent ;oard

mem+ers #ad t#us lost t#e*r r*#t to aeal rom t#e de"*s*on o t#e La+or Ar+*ter and

t#e NLRC s#ould #a.e ort#/*t# d*sm*ssed t#e*r aeal memorandum6

T#ere *s anot#er and more "omell*n reason /#2 t#e resondent ;oard mem+ers

aeal s#ould #a.e +een d*sm*ssed ort#/*t#: t#at aeal /as


38/272

d*s"lose t#at t#e *nd*.*dual ;oard mem+ers /ere mot*.ated +2 mal*"e or +ad a*t#

le/ *n t#e a"e o t#e e.*den"e o re"ord6 At t#e .er2 least, a stron resumt*on #ad

ar*sen, /#*"# *t /as *n"um+ent uon resondent ;oard mem+ers to d*sro.e, t#at

t#e2 #ad a"ted *n rer*sal aa*nst resondent Cosalan and *n an eort to suress

8no/lede a+out and remed*al measures aa*nst t#e *nan"*al *rreular*t*es t#e COA

Aud*ts #ad uneart#ed6 T#at +urden resondent ;oard mem+ers d*d not d*s"#are6

T#e Sol*"*tor General #as ured t#at resondent ;oard mem+ers ma2 +e #eld l*a+le

or damaes under t#e oreo*n "*r"umstan"e under Se"t*on >$ o t#e Cororat*on

Code /#*"# reads as ollo/s:

Se"6 >$6 >ia(ilit o directors, trustees or oicers6 6irectors or

trustees /#o /*llull2 and 8no/*nl2 .ote or or assent to atentl2

unla/ul a"ts o t#e "ororat*on or ho are guilt o gross

negligence or (ad aith in directing the aairs o the corporationor

a"4Em#as*s sul*ed5

e aree /*t# t#e Sol*"*tor General, se"ondl2, t#at resondent ;oard mem+ers /ere

u*lt2 o ross nel*en"e or +ad a*t# *n d*re"t*n t#e aa*rs o t#e "ororat*on *n

ena"t*n t#e ser*es o resolut*ons noted earl*er *nde*n*tel2 susend*n and d*sm*ss*n

resondent Cosalan rom t#e os*t*on o General !anaer o ;ene"o6 Resondent

;oard mem+ers, *n do*n so, a"ted +elon t#e s"oe o t#e*r aut#or*t2 as su"# ;oard

mem+ers6 T#e d*sm*ssal o an o*"er or emlo2ee *n +ad a*t#, /*t#out la/ul "ause

and /*t#out ro"edural due ro"ess, *s an a"t t#at *s contra lege!6 It "annot +e

suosed t#at mem+ers o +oards o d*re"tors der*.e an2 aut#or*t2 to .*olate t#e

e)ress mandates o la/ or t#e "lear leal r*#ts o t#e*r o*"ers and emlo2ees +2

s*ml2 urort*n to a"t or t#e "ororat*on t#e2 "ontrol6

e +el*e.e and so #old, urt#er, t#at not onl2 are ;ene"o and resondent ;oard

mem+ers roerl2 #eld sol*dar*l2 l*a+le or t#e a/ards made +2 t#e La+or Ar+*ter, +ut

also t#at et*t*oner ;ene"o /#*"# /as "ontrolled +2 and /#*"# "ould a"t onl2 t#rou#

resondent ;oard mem+ers, #as a r*#t to +e re*m+ursed or an2 amounts t#at

;ene"o ma2 +e "omelled to a2 to resondent Cosalan6 Su"# r*#t o

re*m+ursement *s essent*al * t#e *nno"ent mem+ers o ;ene"o are not to +e

enal*7ed or t#e a"ts o resondent ;oard mem+ers /#*"# /ere +ot# done *n +ad

a*t# and ultra "ires6 T#e l*a+*l*t2-enerat*n a"ts #ere are t#e ersonal and *nd*.*dual

a"ts o resondent ;oard mem+ers, and are not roerl2 attr*+uted to ;ene"o *tsel6

?ERE9ORE, t#e Pet*t*on or Certiorari*s GIVEN DUE COURSE, t#e "omment *led

+2 resondent ;oard mem+ers *s TREATED as t#e*r ans/er, and t#e de"*s*on o t#e

Nat*onal La+or Relat*ons Comm*ss*on dated &$ No.em+er $0 *n NLRC Case No6RA;-$-'>$>-3 *s #ere+2 SET ASIDE and t#e de"*s*on dated = Ar*l $0 o La+or

Ar+*ter Amado T6 Ad


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9IRST DIVISION

7&.R. No. ?0:?. October ?, 990>>6''

>' 1anuar2 $0( 6 6 6 6 6 6 6 6 6 6 6 6 6 =>,>>>6''

$= 9e+ruar2 $0( 6 6 6 6 6 6 6 6 6 6 6 6 6 =>,>>>6''

& 9e+ruar2 $0( 6 6 6 6 6 6 6 6 6 6 6 6 6 =>,>>>6''

$= !ar"#$0( 6 6 6 6 6 6 6 6 6 6 6 6 6 =>,>>>6''

>' !ar"# $0( 6 6 6 6 6 6 6 6 6 6 6 6 6 =>,>>>6''

*t# t#*s a"8ae, 2ou are assured o t#e #*#est ser.*"e


42/272

='M uon aro.al +2 t#e Comm*ss*oner

T#e !anual #as alread2 +een aro.ed +2 t#e Comm*ss*oner +ut a2ment#as not 2et +een made6

T#e lo/er let "orner o t#e letter also "onta*ned t#e ollo/*n notat*ons:

$stletter - 3 De"6 $0%

&

nd

letter - $= 1une $0( /*t#

:inana1it6

On 1anuar2 $', $0(, And2 V*lla"eren, .*"e res*dent o et*t*oner, re"e*.ed t#eoerat*ons manual reared +2 r*.ate resondent6 Pet*t*oner su+m*tted sa*doerat*ons manual to t#e ;ureau o Customs *n "onne"t*on /*t# t#e ormersal*"at*on to oerate a +onded /are#ouse t#ereater, *n !a2 $0(, t#e ;ureau*ssued to *t a l*"ense to oerate, ena+l*n *t to +e"ome one o t#e t#ree u+l*""ustoms +onded /are#ouses at t#e *nternat*onal a*rort6 Pr*.ate resondent also"ondu"ted, *n t#e t#*rd /ee8 o 1anuar2 $0( *n t#e /are#ouse o et*t*oner, a t#ree-da2 tra*n*n sem*nar or t#e latters emlo2ees6

On !ar"# &=, $0(, r*.ate resondent Bo*ned t#e ;ureau o Customs as se"*alass*stant to t#en Comm*ss*oner Ale) Pad*lla, a os*t*on #e #eld unt*l #e +e"amete"#n*"al ass*stant to t#en Comm*ss*oner !*r*am Deensor-Sant*ao on !ar"# (,$06 !ean/#*le, Punsalan sold #*s s#ares *n et*t*oner-"ororat*on and res*ned as*ts res*dent *n $0(6

On 9e+ruar2 0, $0, r*.ate resondent *led a "olle"t*on su*t aa*nst et*t*oner6?e alleed t#at #e #ad reared an oerat*ons manual or et*t*oner, "ondu"ted asem*nar-/or8s#o or *ts emlo2ees and del*.ered to *t a "omuter roram +ut t#at,des*te demand, et*t*oner reused to a2 #*m or #*s ser.*"es6

Pet*t*oner, *n *ts ans/er, den*ed t#at r*.ate resondent #ad reared anoerat*ons manual and a "omuter roram or "ondu"ted a sem*nar-/or8s#o or *tsemlo2ees6 It urt#er alleed t#at t#e letter-areement /as s*ned +2 Punsalan/*t#out aut#or*t2, *n "ollus*on /*t# r*.ate resondentH *n order to unla/ull2 et somemone2 rom et*t*onerH, and des*te #*s 8no/lede t#at a rou o emlo2ees o t#e"oman2 #ad +een "omm*ss*oned +2 t#e +oard o d*re"tors to reare an oerat*onsmanual6

T#e tr*al "ourt de"lared t#e Se"ond Contra"t unenor"ea+le or s*mulated6?o/e.er, s*n"e r*.ate resondent #ad a"tuall2 reared t#e oerat*ons manual and"ondu"ted a tra*n*n sem*nar or et*t*oner and *ts emlo2ees, t#e tr*al "ourt a/ardedP%',''' to t#e ormer, on t#e round t#at no one s#ould +e unBustl2 enr*"#ed at t#ee)ense o anot#er 4Art*"le &$3&, C*.*l Code56 T#e tr*al "ourt determ*ned t#e amount*n l*#t o t#e e.*den"e resented +2 deendant on t#e usual "#ares made +2 alead*n "onsultan"2 *rm on s*m*lar ser.*"es6

The $uling of the Court of Appeals

To Resondent Court, t#e *.otal *ssue o r*.ate resondents aeal /as t#eenor"ea+*l*t2 o t#e Se"ond Contra"t6 It noted t#at et*t*oner d*d not aeal t#eDe"*s*on o t#e tr*al "ourt, *ml2*n t#at *t #ad areed to a2 t#e P%',''' a/ard6 I t#e"ontra"t /as .al*d and enor"ea+le, t#en et*t*oner s#ould +e #eld l*a+le or t#e ullamount stated t#ere*n, not P%',''' as #eld +2 t#e lo/er "ourt6

ReBe"t*n t#e *nd*n o t#e tr*al "ourt t#at t#e De"em+er 3, $0% "ontra"t /ass*mulated or unenor"ea+le, t#e CA ruled *n a.or o *ts .al*d*t2 and enor"ea+*l*t26A""ord*n to t#e Court o Aeals, t#e e.*den"e on re"ord s#o/s t#at t#e res*dent oet*t*oner-"ororat*on #ad entered *nto t#e 9*rst Contra"t, /#*"# /as s*m*lar to t#e

Se"ond Contra"t6 T#us, et*t*oner #ad "lot#ed *ts res*dent /*t# aarent aut#or*t2 toenter *nto t#e d*suted areement6 As *t #ad also +e"ome t#e ra"t*"e o t#eet*t*oner-"ororat*on to allo/ *ts res*dent to neot*ate and e)e"ute "ontra"tsne"essar2 to se"ure *ts l*"ense as a "ustoms +onded /are#ouse /*t#out r*or +oardaro.al, t#e +oard *tsel, +2 *ts a"ts and t#rou# a"


43/272

s*mulated6

The Courts $uling

T#e et*t*on *s not mer*tor*ous6

"irst ssue# Apparent Authority of a Corporate President

Pet*t*oner arues t#at t#e d*suted "ontra"t *s unenor"ea+le, +e"ausePunsalan, *ts res*dent, /as not aut#or*7ed +2 *ts +oard o d*re"tors to enter *nto sa*d"ontra"t6

T#e eneral rule *s t#at, *n t#e a+sen"e o aut#or*t2 rom t#e +oard o d*re"tors,no erson, not e.en *ts o*"ers, "an .al*dl2 +*nd a "ororat*on6 A "ororat*on *s aBur*d*"al erson, searate and d*st*n"t rom *ts sto"8#olders and mem+ers, #a.*n )))o/ers, attr*+utes and roert*es e)ressl2 aut#or*7ed +2 la/ or *n"*dent to *tse)*sten"e6

;e*n a Bur*d*"al ent*t2, a "ororat*on ma2 a"t t#rou# *ts +oard o d*re"tors,/#*"# e)er"*ses almost all "ororate o/ers, la2s do/n all "ororate +us*nessol*"*es and *s resons*+le or t#e e*"*en"2 o manaement, as ro.*ded *n Se"t*on&> o t#e Cororat*on Code o t#e P#*l**nes:

SEC6 &>6 /he 5oard o 6irectors or /rustees6 -- Unless ot#er/*sero.*ded *n t#*s Code, t#e "ororate o/ers o all "ororat*ons ormedunder t#*s Code s#all +e e)er"*sed, all +us*ness "ondu"ted and all roert2o su"# "ororat*ons "ontrolled and #eld +2 t#e +oard o d*re"tors ortrustees ) ) )6

Under t#*s ro.*s*on, t#e o/er and t#e resons*+*l*t2 to de"*de /#et#er t#e"ororat*on s#ould enter *nto a "ontra"t t#at /*ll +*nd t#e "ororat*on *s loded *n t#e+oard, su+Be"t to t#e art*"les o *n"ororat*on, +2la/s, or rele.ant ro.*s*ons o la/6?o/e.er, Bust as a natural erson ma2 aut#or*7e anot#er to do "erta*n a"ts or and on#*s +e#al, t#e +oard o d*re"tors ma2 .al*dl2 deleate some o *ts un"t*ons ando/ers to o*"ers, "omm*ttees or aents6 T#e aut#or*t2 o su"# *nd*.*duals to +*nd t#e"ororat*on *s enerall2 der*.ed rom la/, "ororate +2la/s or aut#or*7at*on rom t#e

+oard, e*t#er e)ressl2 or *ml*edl2 +2 #a+*t, "ustom or a"=','''6'' to !r6 Sao

A: Kes, s*r6

T#e 9*rst Contra"t /as "onsummated, *mlemented and a*d /*t#out a #*t"#6

?en"e, r*.ate resondent s#ould not +e aulted or +el*e.*n t#at Punsalans"onorm*t2 to t#e "ontra"t *n d*sute /as also +*nd*n on et*t*oner6 It *s am*l*ardo"tr*ne t#at * a "ororat*on 8no/*nl2 erm*ts one o *ts o*"ers, or an2 ot#er aent,to a"t /*t#*n t#e s"oe o an aarent aut#or*t2, *t #olds #*m out to t#e u+l*" asossess*n t#e o/er to do t#ose a"ts and t#us, t#e "ororat*on /*ll, as aa*nst

an2one /#o #as *n ood a*t# dealt /*t# *t t#rou# su"# aent, +e estoed rom


44/272

den2*n t#e aents aut#or*t26

9urt#ermore, r*.ate resondent reared an oerat*ons manual and "ondu"teda sem*nar or t#e emlo2ees o et*t*oner *n a""ordan"e /*t# t#e*r "ontra"t6 Pet*t*onera""eted t#e oerat*ons manual, su+m*tted *t to t#e ;ureau o Customs and allo/edt#e sem*nar or *ts emlo2ees6 As a result o *ts aorement*oned a"t*ons, et*t*oner/as *.en +2 t#e ;ureau o Customs a l*"ense to oerate a +onded /are#ouse6Grant*n arguendo t#en t#at t#e Se"ond Contra"t /as outs*de t#e usual o/ers ot#e res*dent, et*t*oners rat**"at*on o sa*d "ontra"t and a""etan"e o +ene*ts #a.emade *t +*nd*n, nonet#eless6 T#e enor"ea+*l*t2 o "ontra"ts under Art*"le $3'>4&5 *s

rat**ed +2 t#e a""etan"e o +ene*ts under t#em under Art*"le $3'=6

Inasmu"# as a "ororate res*dent *s oten *.en eneral suer.*s*on and"ontrol o.er "ororate oerat*ons, t#e str*"t rule t#at sa*d o*"er #as no *n#erento/er to a"t or t#e "ororat*on *s slo/l2 *.*n /a2 to t#e real*7at*on t#at su"# o*"er#as "erta*n l*m*ted o/ers *n t#e transa"t*on o t#e usual and ord*nar2 +us*ness o t#e"ororat*on6 In t#e a+sen"e o a "#arter or +2la/ ro.*s*on to t#e "ontrar2, t#eres*dent *s resumed to #a.e t#e aut#or*t2 to a"t /*t#*n t#e doma*n o t#e eneralo+Be"t*.es o *ts +us*ness and /*t#*n t#e s"oe o #*s or #er usual dut*es6

?en"e, *t #as +een #eld *n ot#er Bur*sd*"t*ons t#at t#e res*dent o a "ororat*onossesses t#e o/er to enter *nto a "ontra"t or t#e "ororat*on, /#en t#e "ondu"t ont#e art o +ot# t#e res*dent and t#e "ororat*on s#o/sH t#at #e #ad +een *n t#e

#a+*t o a"t*n *n s*m*lar matters on +e#al o t#e "oman2 and t#at t#e "oman2 #adaut#or*7ed #*m so to a"t and #ad re"on*7ed, aro.ed and rat**ed #*s ormer ands*m*lar a"t*ons6 9urt#ermore, a art2 deal*n /*t# t#e res*dent o a "ororat*on *sent*tled to assume t#at #e #as t#e aut#or*t2 to enter, on +e#al o t#e "ororat*on, *nto"ontra"ts t#at are /*t#*n t#e s"oe o t#e o/ers o sa*d "ororat*on and t#at do not.*olate an2 statute or rule on u+l*" ol*"26

Second ssue# Alleged Simulation of the "irst Contract

As an alternat*.e os*t*on, et*t*oner see8s to are do/n *ts l*a+*l*t*es +2 l*m*t*n*ts e)osure rom P3'',''' to onl2 P%',''', t#e amount a/arded +2 t#e RTC6Pet*t*oner "a*tal*7es on t#e +ades o raud "*ted +2 t#e tr*al "ourt *n de"lar*n sa*d"ontra"t e*t#er s*mulated or unenor"ea+le, .*76:

))) T#e O"to+er $0% transa"t*on /*t# r*.ate resondentH *n.ol.edP>=','''6 T#e same /as em+od*ed *n a letter /#*"# +ore t#ere*n not onl2t#e "onorm*t2 o et*t*onersH t#en Pres*dent Punsalan +ut also dre/ aletter-"on*rmat*on rom t#e latter or, *ndeed, #e /as "lot#ed /*t# aut#or*t2to enter *nto t#e "ontra"t ater t#e same /as +rou#t to t#e attent*on and"ons*derat*on o et*t*onerH6 Not onl2 t#at, a do/n a2mentH /as made6 Int#e alleed areement o De"em+er 3, $0% su+Be"t o t#e resent "ase,t#e amount *s e.en +*er-P3'','''6''6 Ket, t#e alleed letter-areementdre/ no letter o "on*rmat*on6 And no do/n a2mentH and ostdated"#e"8s /ere *.en6 Unt*l t#e *l*n o t#e resent "ase *n 9e+ruar2 $0, no/r*tten demand or a2ment /as sent to et*t*onerH6 Pr*.ate resondentsH"la*m t#at #e sent one *n /r*t*n, and one /as sent +2 #*s "ounsel /#oman*ested t#at #He /as loo8*n or a "o2 *n #*sH *les a*ls *n l*#t o #*sa*lure to resent an2 su"# "o26 T#ese and t#e ollo/*n "ons*derat*ons,

to /*t:

$5 Des*te t#e a"t t#at no do/n a2mentH and@orostdated "#e"8s art*al a2mentsH 4as urortedl2 st*ulated*n t#e alleed "ontra"t5 /as *.en, r*.ate resondentH /enta#ead /*t# t#e ser.*"esH

&5 T#ere /as a dela2 *n t#e *l*n o t#e resentsu*t, more t#an a 2ear ater r*.ate resondentH alleedl2"omleted #*s ser.*"es or e*#t mont#s ater t#e alleed last

.er+al demand or a2ment made on Punsalan *n 1une $0(

>5 Does not Punsalans /r* t*n a lleedl2 *n 1une$0( on t#e alleed letter-areement o 2our emlo2ees,H /#en*t s#ould #a.e +een our emlo2ees, as #e /as t#en st*ll"onne"ted /*t# et*t*onerH, *nd*"ate t#at t#e letter-areement/as s*ned +2 Punsalan /#en #e /as no loner "onne"ted /*t#et*t*onerH or, as "la*med +2 et*t*onerH, t#at Punsalan s*ned *t/*t#out et*t*onersH aut#or*t2 and must #a.e +een done *n"ollus*on /*t# la*nt* *n order to unla/ull2 et some mone2rom et*t*onerH

35 I, as r *.ate resondentH "la*ms, t#e letter /as

returned +2 Punsalan ater a*)*n t#ereon #*s "onorm*t2, #o/"ome ))) /#en Punsalan alleedl2 .*s*ted r*.ate resondentH*n #*s o*"e at t#e ;ureau o Customs, *n 1une $0(, Punsalan+rou#t 4aa*n5 t#e letter 4/*t# t#e en"*l notat*onH at t#e let+ottom ort*on alleedl2 alread2 /r*tten5

=5 ?o/ " ome ) )) r*.ate resondentH d *d n ote.en 8ee a "o2 o t#e alleed ser.*"e "ontra"t alleedl2atta"#ed to t#e letter-areement

%5 as not t#e letter-areement a mere dra t, * t+ear*n t#e "orre"t*ons made +2 Punsalan o #*s name 4t#eletter n *s *nserted +eore t#e last letter o *n Anton*o5 and o t#e

sell*n o #*s am*l2 name 4Punsalan, not Pun7alan5

(5 #2 /as not Punsalan *mleaded *n t#e "ase

T#e *ssue o /#et#er t#e "ontra"t *s s*mulated or real *s a"tual *n nature, andt#e Court es"#e/s a"tual e)am*nat*on *n a et*t*on or re.*e/ under Rule 3= o t#eRules o Court6 T#*s rule, #o/e.er, adm*ts o e)"et*ons, one o /#*"# *s a "onl*"t+et/een t#e a"tual *nd*ns o t#e lo/er and o t#e aellate "ourts as *n t#e "ase at+ar6

Ater Bud*"*ous del*+erat*on, t#e Court arees /*t# t#e aellate "ourt t#at t#ealleed +ades o raud ment*oned earl*er #a.e not ae"ted *n an2 manner t#eere"t*on o t#e Se"ond Contra"t or ro.ed t#e alleed s*mulat*on t#ereo6 &irst,t#e

la"8 o a2ment 4/#et#er do/n, art*al or ull a2ment5, e.en ater "omlet*on o


45/272

r*.ate resondents o+l*at*ons, *morts onl2 a dee"t *n t#e erorman"e o t#e"ontra"t on t#e art o et*t*oner6 Second, t#e dela2 *n t#e *l*n o a"t*on /as not atalto r*.ate resondents "ause6 Des*te t#e lase o one 2ear ater r*.ate resondent"omleted #*s ser.*"es or e*#t mont#s ater t#e alleed last demand or a2ment *n1une $0(, t#e a"t*on /as st*ll *led /*t#*n t#e allo/a+le er*od, "ons*der*n t#at ana"t*on +ased on a /r*tten "ontra"t res"r*+es onl2 ater ten 2ears rom t#e t*me t#er*#t o a"t*on a""rues6/hird,a m*ssell*n *n t#e "ontra"t does not esta+l*s# .*t*at*ono "onsent, "ause or o+Be"t o t#e "ontra"t6 &ourth, a "on*rmat*on letter *s not anessent*al element o a "ontra"t ne*t#er *s *t ne"essar2 to ere"t one6 &ith, r*.ateresondents a*lure to *mlead t#e "ororate res*dent does not esta+l*s# "ollus*on

+et/een t#em6 Pet*t*oner "ould #a.e eas*l2 *led a t#*rd-art2 "la*m aa*nst Punsalan* *t +el*e.ed t#at *t #ad re"ourse aa*nst t#e latter6 Lastl2, t#e mere a"t t#at t#e"ontra"t r*"e /as s*) t*mes t#e alleed o*n rate does not *n.al*date *t6 In s#ort,t#ese +ades do not esta+l*s# s*mulat*on o sa*d "ontra"t6

A *"t*t*ous and s*mulated areement la"8s "onsent /#*"# *s essent*al to a .al*dand enor"ea+le "ontra"t6 A "ontra"t *s s*mulated * t#e art*es do not *ntend to +e+ound at all 4a+solutel2 s*mulated5, or * t#e art*es "on"eal t#e*r true areement4relat*.el2 s*mulated56 In t#e "ase at +ar, et*t*oner re"e*.ed rom r*.ate resondent aletter-oer "onta*n*n t#e terms o t#e ormer, *n"lud*n a st*ulat*on o t#e"ons*derat*on or t#e latters ser.*"es6 Punsalans "onorm*t2, as /ell as t#e re"e*t anduse o t#e oerat*ons manual, s#o/s et*t*oners "onsent to or, at t#e .er2 least,rat**"at*on o t#e "ontra"t6 To reeat, et*t*oner e.en su+m*tted t#e manual to t#e

;ureau o Customs and allo/ed r*.ate resondent to "ondu"t t#e sem*nar or *tsemlo2ees6 Pr*.ate resondent #eard no o+Be"t*on rom t#e et*t*oner, unt*l #e"la*med a2ment or t#e ser.*"es #e #ad rendered6

Contemoraneous and su+se=$'6 T#e assa*led de"*s*on null**ed t#eNo.em+er &(, $00 de"*s*on and Ar*l &0, $000 resolut*on o t#e Nat*onal La+orRelat*ons Comm*ss*on 4NLRC5 and entered a ne/ one de"lar*n t#at t#e resondentEd/ard J*n /as *lleall2 d*sm*ssed and a/ard*n #*m +a"8/aes, searat*on a2and attorne2s ees6

Pet*t*oner Eas2"all Commun*"at*ons P#*ls6, In"6 /as a domest*" "ororat*onr*mar*l2 enaed *n t#e +us*ness o messae #andl*n6 On !a2 &', $00&, et*t*oner,t#rou# *ts eneral manaer, Ro+erto ;6 !alon7o, #*red t#e ser.*"es o resondent asass*stant to t#e eneral manaer6 ?e /as *.en t#e resons*+*l*t2 o ensur*n t#at t#ee)ans*on lans outs*de !etro !an*la and !etro Ce+u /ere a"#*e.ed at t#e soonestoss*+le t*me6
http://sc.judiciary.gov.ph/jurisprudence/2005/dec2005/145901.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2005/dec2005/145901.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2005/dec2005/145901.htm#_ftn1


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In an Auust $3, $00& memorandum, !r6 R6T6 Casas, resondents*mmed*ate suer*or, re"ommended #*s romot*on to ass*stant .*"e res*dent ornat*on/*de e)ans*on6 On De"em+er &&, $00&, resondent /as ao*nted to t#ee.en #*#er os*t*on o .*"e res*dent or nat*on/*de e)ans*on6 Resondentsromot*on /as +ased on #*s erorman"e dur*n t#e s*) mont#s re"ed*n #*sao*ntment6 As .*"e res*dent or nat*on/*de e)ans*on, #e +e"ame resons*+le ort#e sales and rentals o aer un*ts *n et*t*oners e)ans*on areas6 ?e /as also *n"#are o "oord*nat*n /*t# t#e dealers *n t#ese areas6

Somet*me *n !ar"# $00>, !alon7o re.*e/ed t#e sales erorman"e o resondent6

?e also s"rut*n*7ed t#e status o et*t*oners Nat*on/*de E)ans*on Proram 4NEP5/#*"# /as under resondents resons*+*l*t26 ?e ound t#at resondents a"tual salesor t#e er*od O"to+er $00&!ar"# $00> /as (M o #*s sales "omm*tment and ('Mo #*s sales taret6

!alon7o also "#e"8ed t#e re6 In art*"ular, t#e rele.ant ort*on o t#e not*"e read:

T#*s *s to *norm 2ou t#at manaement *s no lon=er con2'dentt#at2ou are t#e r*#t manaer or t#e os*t*on 2ou are o""u2*n6 Ourser*es o d*s"uss*ons on t#e .ar*ous ase"ts o 2our un"t*ons /*t#

2ou d*d not "on.*n"e us t#at *t *s to t#e +est *nterest o Eas2 Call toreta*n 2our ser.*"es6 ))) &H4Em#as*s sul*ed5

Ar*e.ed, t#e resondent *led a "omla*nt or *lleal d*sm*ssal /*t# t#eNLRC6 It /as do"8eted as NLRC Case No6 ''-'3-'&0$>-0>6

In #*s 1une &3, $00( de"*s*on, t#e la+or ar+*ter ound t#at t#e term*nat*on oresondents emlo2ment on t#e round o loss o "on*den"e /as .al*d6

Conse


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RE!ISS IN ?IS DUTIES AS VICE PRESIDENT 9ORNATIONIDE EPANSION6

III6

T?E ?ONORA;LE COURT O9 APPEALS GRAVELK ERRED?EN IT 9AILED TO CONSIDER T?AT ;EING A CORPORATEO99ICER, T?E NLRC ?AS NO 1URISDICTION OVER T?ESU;1ECT UNDER PD 0'&-A6>H

e s#all rule *rst on t#e *ssue o Bur*sd*"t*on as *t *s de"*s*.e6 I t#e NLRC #ad no

Bur*sd*"t*on, t#en *t /ould +e unne"essar2 to "ons*der t#e .al*d*t2 o resondentsd*sm*ssal6

Pet*t*oner arues t#at s*n"e resondent /as a "ororate o*"er, t#e NLRC#ad no Bur*sd*"t*on o.er t#e su+Be"t matter under PD 0'&-A6 In suort o *ts"ontent*on, et*t*oner *n.o8es 'aguio ". N>RC 3H/#ere /e #eld t#at t#e remo.al o a"ororate o*"er, /#et#er ele"ted or ao*nted, *s an *ntra-"ororate "ontro.ers2 o.er/#*"# t#e NLRC #as no Bur*sd*"t*on6 T#e et*t*oner also "*tes our rul*n *n de Rossi ".N>RC=H to t#e ee"t t#at t#e SEC, not t#e NLRC, #as or**nal and e)"lus*.eBur*sd*"t*on o.er "ases *n.ol.*n t#e remo.al o "ororate o*"ers6

Under Se"t*on = o PD 0'&-A, t#e la/ al*"a+le at t#e t*me t#*s "ontro.ers2arose,%Ht#e SEC, not t#e NLRC, #ad or**nal and e)"lus*.e Bur*sd*"t*on o.er "ases

*n.ol.*n t#e remo.al o "ororate o*"ers6 Se"t*on =4"5 o PD 0'&-A al*ed to a"ororate o*"ers d*sm*ssal or #*s d*sm*ssal /as a "ororate a"t and@or an *ntra-"ororate "ontro.ers26(H

?o/e.er, *t #ad to +e *rst esta+l*s#ed t#at t#e erson remo.ed or d*sm*ssed

/as a "ororate o*"er +eore t#e remo.al or d*sm*ssal "ould roerl2 all /*t#*n t#eBur*sd*"t*on o t#e SEC and not t#e NLRC6 ?ere, as*de rom *ts +are alleat*on,et*t*oner a*led to s#o/ t#at resondent /as *n a"t a "ororate o*"er6

Cororate o*"ers *n t#e "onte)t o PD 0'&-A are t#ose o*"ers o a"oro

cases 39 onwards (full text)

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