SIMNY G. GUY vs. GILBERT G. GUY

SIMNY G. GUY vs. GILBERT G. GUY

   April 25, 2018       FJ

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SIMNY G. GUY, as minority stockholder and for and in behalf of GOODLAND COMPANY, INC. vs. GILBERT G. GUY, ALVIN AGUSTIN T. IGNACIO and JOHN and/or JANE DOES

G.R. No. 184068. April 19, 2016.

FACTS:

GCI is a family-owned corporation of the Guy family duly organized and existing under Philippine laws. Simny Guy is a stockholder of record and member of the BOD of the corporation. Gilbert Guy, et al. are also GCI stockholders of record who were allegedly elected as new directors by virtue of the assailed stockholders' meeting held on 7 September 2004.

On 10 September 2004, Paulino Delfin Pe and Benjamin Lim (stockholders of record of GCI) informed Simny that they had received a notice dated 31 August 2004 calling for the holding of a special stockholders' meeting on 7 September 2004 at the Manila Diamond Hotel.  The said meeting is for the purpose of the election of the BOD for the year 2004-2005. 15 days after the stockholders' meeting, Simny received the said notice.

On 30 September 2004, Simny, for himself and on behalf of GCI and Grace Guy Cheu, filed a Complaint against respondents before the RTC for the "Nullification of Stockholders' Meeting and Election of Directors, Nullification of Acts and Resolutions, Injunction and Damages with Prayer for TRO and/or Writ of Preliminary Injunction." It was assailed on the following grounds: (1) there was no previous notice to Simny and Cheu; (2) the meeting was not called by the proper person; and (3) the notices were not issued by the person who had the legal authority to do so.

Gilbert argued that the meeting on was legally called and held; that the notice of meeting was signed by the authorized officer of GCI and sent in accordance with the by-laws of the corporation; and that Cheu was not a stockholder of record of the corporation, a status that would have entitled her to receive a notice of the meeting.

ISSUE:

Whether or not the notice of the stockholders' meeting was properly sent in compliance with law and the by-laws of the corporation

HELD:

YES. Special meetings of stockholders or members shall be held at any time deemed necessary or as provided in the by-laws: Provided, however, that at least one (1) week written notice shall be sent to all stockholders or members, unless otherwise provided in the by-laws. Notice of any meeting may be waived, expressly or impliedly, by any stockholder or member.

Whenever, for any cause, there is no person authorized to call a meeting, the SEC, upon petition of a stockholder or member, and on the showing of good cause therefor, may issue an order to the petitioning stockholder or member directing him to call a meeting of the corporation by giving proper notice required by this Code or by the by-laws. The petitioning stockholder or member shall preside thereat until at least a majority of the stockholders or members present have chosen one of their number as presiding officer.

In the case at bar, under the by-laws of GCI, the notice of meeting shall be mailed not less than five (5) days prior to the date set for the special meeting. The pertinent provision reads:

Section 3. Notice of meeting written or printed for every regular or special meeting of the stockholders shall be prepared and mailed to the registered post office address of each stockholder not less than five (5) days prior to the date set for such meeting, and if for a special meeting, such notice shall state the object or objects of the same. No failure or irregularity of notice of any meeting shall invalidate such meeting at which all the stockholders are present and voting without protest.

The Corporation Code itself permits the shortening (or lengthening) of the period within which to send the notice to call a special (or regular) meeting. Thus, no irregularity exists in the mailing of the notice sent by respondent Gilbert on 2 September 2004 calling for the special stockholders' meeting to be held on 7 September 2004, since it abides by what is stated in GCI's by-laws as quoted above.

The Court finds that the provisions under Sec. 50 of the Corporation Code and the by-laws of GCI are clear and unambiguous. They do not admit of two or more meanings, nor do they make reference to two or more things at the same time. The provisions only require the sending/mailing of the notice of a stockholders' meeting to the stockholders of the corporation. Sending/mailing is different from filing or service under the Rules of Court. Had the lawmakers intended to include the stockholder's receipt of the notice, they would have clearly reflected such requirement in the law. Absent that requirement, the word "send" should be understood in its plain meaning:

"Send" means to deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed and in the case of an instrument to an address specified thereon or otherwise agreed, or if there be none, to any address reasonable under the circumstances. The receipt of any writing or notice within the time at which it would have arrived if properly sent has the effect of a proper sending.

Clearly, respondents are only mandated to notify petitioner by depositing in the mail the notice of the stockholders' special meeting, with postage or cost of transmission provided and the name and address of the stockholder properly specified. With respect to the latter part of the definition of "send" under Black's Law Dictionary, the term "receipt" only has the effect of proper sending when a mail matter is received in the usual course of transmission.

It should be emphasized here that the period of mailing, that is, at least five (5) days prior mailing of notice of meeting as provided in the By-laws of GOODLAND is reasonable enough for the petitioner Simny Guy to receive the notice of meeting prior to the holding of the subject stockholders' meeting considering the relative distance of the Post Office (Meralco Post Office, Pasig City) where the said notice of meeting was mailed vis-à-vis the place of residence of petitioner Simny Guy located at Greenmeadows, Quezon City.

Therefore, petitioner is considered to have received notice of the special stockholders' meeting after said notice was properly mailed by respondents.

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ALFREDO L. CHUA, et al. vs. PEOPLE OF THE PHILIPPINES

ALFREDO L. CHUA, et al. vs. PEOPLE OF THE PHILIPPINES

   April 25, 2018       FJ

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ALFREDO L. CHUA, TOMAS L. CHUA and MERCEDES P. DIAZ vs. PEOPLE OF THE PHILIPPINES

G.R. No. 216146. August 24, 2016.

FACTS:

Joselyn was a stockholder of Chua Tee Corporation of Manila. Alfredo was the president and chairman of the board, while Tomas was the corporate secretary and also a member of the board of the same corporation. Mercedes was the accountant/bookkeeper tasked with the physical custody of the corporate records.

On or about August 24, 2000, Joselyn invoked her right as a stockholder pursuant to Sec 74 of the Corporation Code to inspect the records of the books of the business transactions of the corporation, the minutes of the meetings of the board of directors and stockholders, as well as the financial statements of the corporation. She hired a lawyer to send demand letters to each of the petitioners for her right to inspect to be heeded. However, she was denied of such right to inspect.

Joselyn likewise hired the services of Mr. Velayo from the accounting firm to assist her in examining the books of the corporation. Armed with a letter request, together with the list of schedules of audit materials, Mr. Velayo and his group visited the corporation's premises for the supposed examination of the accounts. However, the books of accounts were not formally presented to them and there was no list of schedules, which would allow them to pursue their inspection. Mr. Velayo testified that they failed to complete their objective of inspecting the books of accounts and examine the recorded documents.

In the Complaint-Affidavit, Joselyn alleged that despite written demands, the petitioners conspired in refusing without valid cause the exercise of her right to inspect CTCM records.

The petitioners attested, they did not prevent Joselyn from inspecting the records. What happened was that Mercedes was severely occupied with winding up the affairs of CTCM after it ceased operations. Joselyn and her lawyers then failed to set up an appointment with Mercedes.

An Information indicting the petitioners for alleged violation of Sec 74, in relation to Sec 144, of the Corporation Code was filed before the MeTC.

The petitioners filed a Motion to Quash, they argued that CTCM had ceased to exist as a corporate entity since May 26, 1999. Consequently, when the acts complained of by Joselyn were allegedly committed in August of 2000, the petitioners cannot be considered anymore as responsible officers of CTCM. The MeTC rendered convicting the petitioners as charged. In appeal, the RTC affirmed the MeTC.

In pending resolution of the motion, Rosario Sui Lian Chua, mother of the now deceased Joselyn, filed an Affidavit of Desistance, stated that  the reason to believe that the filing of the instant criminal case was merely the result of serious misunderstanding anent the management and operation of CTCM, which had long ceased to exist as a corporate entity even prior to the alleged commission of the crime in question, rather than by reason of any criminal intent or actuation on the part of the petitioners.

ISSUE/s:

Whether or not Joselyn, as a stockholder has the right to inspect the records of the books of the business transactions, the minutes of the meetings of the BOD and stockholders, and the financial statements of the corporation

HELD:

YES. The corporation continues to be a body corporate for three (3) years after its dissolution for purposes of prosecuting and defending suits by and against it and for enabling it to settle and close its affairs, culminating in the disposition and distribution of its remaining assets.

The termination of the life of a juridical entity does not by itself cause the extinction or diminution of the rights and liabilities of such entity nor those of its owners and creditors.

Further, as correctly pointed out by the OSG, Sections 122 and 145 of the Corporation Code explicitly provide for the continuation of the body corporate for three years after dissolution. The rights and remedies against, or liabilities of, the officers shall not be removed or impaired by reason of the dissolution of the corporation. Corollarily then, a stockholder's right to inspect corporate records subsists during the period of liquidation. Hence, Joselyn, as a stockholder, had the right to demand for the inspection of records. Lodged upon the corporation is the corresponding duty to allow the said inspection.

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CIR vs. CA

CIR vs. CA

   April 25, 2018       FJ

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COMMISSIONER OF INTERNAL REVENUE vs. THE COURT OF APPEALS, COURT OF TAX APPEALS and A. SORIANO CORP.

G.R. No. 108576. January 20, 1999.

FACTS:

Don Andres Soriano, a citizen and resident of the USA formed in the 1930's the corporation "A Soriano Y Cia," predecessor of ANSCOR. On December 30, 1964 Don Andres died.

A day after Don Andres died, ANSCOR increased its capital stock to P20M and in 1966 further increased it to P30M. In the same year, stock dividends worth 46,290 and 46,287 shares were respectively received by the Don Andres estate and Doña Carmen from ANSCOR. Hence, increasing their accumulated shareholdings to 138,867 and 138,864 common shares each.

On June 30, 1968, pursuant to a Board Resolution, ANSCOR redeemed 28,000 common shares from Don Andres' estate. By November 1968, the Board further increased ANSCOR's capital stock to P75M divided into 150,000 preferred shares and 600,000 common shares. About a year later ANSCOR again redeemed 80,000 common shares from Don Andres' estate, further reducing the latter's common shareholdings.

ANSCOR's business purpose for both redemptions of stock is to partially retire said stocks as treasury shares in order to reduce the company's foreign exchange remittances in case cash dividends are declared. In 1973, after examining ANSCOR's books of account and records Revenue Examiners issued a report proposing that ANSCOR be assessed for deficiency withholding tax-at-source, pursuant to Secs 53 and 54 of the 1939 Revenue Code for the year 1968 and the second quarter of 1969 based on the transactions of exchange and redemption of stocks.

Subsequently, ANSCOR filed a petition for review with the CTA assailing the tax assessments on the redemptions and exchange of stocks. In its decision, the CTA reversed the BIR's ruling after finding sufficient evidence to overcome the prima facie correctness of the questioned assessments. In a petition for review, the CA affirmed the ruling of the CTA.

ISSUE:

Whether ANSCOR's redemption of stocks from its stockholders as well as the exchange of common shares can be considered as equivalent to the distribution of taxable dividend making the proceeds thereof taxable under the provisions Section 83 (B) of the 1939 Revenue Act.

HELD:

 The Supreme Court modified the decision of the Court of Appeals in that ANSCOR'S redemption of 82,752.5 stock dividends is herein considered as essentially equivalent to a distribution of taxable dividends for which it is liable for the withholding tax-at-source. While the Board Resolutions authorizing the redemptions state only one purpose — reduction of foreign exchange remittances in case cash dividends are declared. Said purpose was not given credence by the court in case at bar. Records show that despite the existence of enormous corporate profits no cash dividends were ever declared by ANSCOR from 1945 until the BIR started making assessments in the early 1970's. Although a corporation under certain exceptions, has the prerogative when to issue dividends, yet when no cash dividends are issued for about three decades, this circumstance negate the legitimacy of ANSCOR's alleged purposes. With regard to the exchange of shares, the Court ruled that the exchange of common with preferred shares is not taxable because it produces no realized income to the subscriber but only a modification of the subscriber's rights and privileges which is not a flow of wealth for tax purposes.

Both the Tax Court and the CA found that ANSCOR reclassified its shares into common and preferred, and that parts of the common shares of the Don Andres estate and all of Doña Carmen's shares were exchanged for the whole 150,000 preferred shares. Thereafter, both the Don Andres estate and Doña Carmen remained as corporate subscribers except that their subscriptions now include preferred shares. There was no change in their proportional interest after the exchange. There was no cash flow. Both stocks had the same par value. Under the facts herein, any difference in their market value would be immaterial at the time of exchange because no income is yet realized — it was a mere corporate paper transaction. It would have been different, if the exchange transaction resulted into a flow of wealth, in which case income tax may be imposed. Reclassification of shares does not always bring any substantial alteration in the subscriber's proportional interest. But the exchange is different — there would be a shifting of the balance of stock features, like priority in dividend declarations or absence of voting rights. Yet neither the reclassification nor exchange per se, yields realize income for tax purposes. A common stock represents the residual ownership interest in the corporation. It is a basic class of stock ordinarily and usually issued without extraordinary rights or privileges and entitles the shareholder to a pro rata division of profits. Preferred stocks are those which entitle the shareholder to some priority on dividends and asset distribution. Both shares are part of the corporation's capital stock. Both stockholders are no different from ordinary investors who take on the same investment risks. Preferred and common shareholders participate in the same venture, willing to share in the profits and losses of the enterprise. Moreover, under the doctrine of equality of shares — all stocks issued by the corporation are presumed equal with the same privileges and liabilities, provided that the Articles of Incorporation is silent on such differences. In this case, the exchange of shares, without more, produces no realized income to the subscriber. There is only a modification of the subscriber's rights and privileges — which is not a flow of wealth for tax purposes. The issue of taxable dividend may arise only once a subscriber disposes of his entire interest and not when there is still maintenance of proprietary interest. 

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HEIRS OF ANTONIO PAEL and ANDREA ALCANTARA vs. COURT OF APPEALS, ET AL.

HEIRS OF ANTONIO PAEL and ANDREA ALCANTARA vs. COURT OF APPEALS, ET AL.

   April 25, 2018       FJ

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HEIRS OF ANTONIO PAEL and ANDREA ALCANTARA and CRISANTO PAEL vs. COURT OF APPEALS, JORGE H. CHIN and RENATO B. MALLARI

G.R. No. 133547. February 10, 2000.

MARIA DESTURA vs. COURT OF APPEALS, JORGE H. CHIN and RENATO B. MALLARI LUIS M. MENOR, intervenor.

G.R. No. 133843. February 10, 2000.

FACTS:

Maria Destura filed a complaint against Jorge Chin, Renato Mallari and her own husband, Pedro Destura in the RTC.

Previously, Pedro, had filed a substantially similar complaint against the same defendants, Chin and Mallari, for annulment of title, reconveyance and SP, damages and nullification of the MOA. The trial court issued an Order dismissing the complaint for lack of cause of action. Pedro appealed to the CA.

Inspite of the decision against her husband, Maria filed a similar action one month after the decision was rendered. The trial court in the Maria case, rendered judgment by default nullifying the MOA and ordering the cancellation of Chin's and Mallari's titles and did not award any affirmative relief to Maria but instead, ordered the reinstatement of TCT in the names of the Paels, who were non-parties in the case.

From the adverse decision and order of the trial court, Chin and Mallari filed a petition for annulment of judgment before the CA and rendered the assailed decision, declaring as null and void both the cancellation of the their titles over the subject property and reinstatement of the title in the names of the Paels.

While the petition for annulment was pending before the CA, or on January 28, 1998, a certain corporation called PFINA Properties, Inc. filed a motion for leave of court to intervene and to admit petition-in-intervention. It alleged that PFINA acquired the property subject of the litigation for substantial and valuable consideration from the Paels, by virtue of a deed of assignment dated January 25, 1983, and that the title was issued in its name by the Paels. This motion was opposed by Chin and Mallari. They cite the fact that the alleged acquisition of the property by PFINA supposedly occurred as early as January 25, 1983, and for fifteen (15) years, inspite of numerous proceedings before different courts and agencies involving the disputed property, both the Paels and PFINA were silent about the alleged change of ownership. No steps to register the sale or secure transfer titles were undertaken during this period.

The new title was obtained by PFINA by the RD despite its knowledge that there was a pending case for annulment before the appellate court.

Atty. Cleofe, the RD of QC who cancelled the TCT in the names of Paels, and issued the new title in the name of PFINA acted in gross and evident bad faith. Not only was the Register a party respondent fully knowledgeable and served with all processes in the annulment case, but the petition before the CA was also annotated at the back of the title of the Paels.

Only after a period of fifteen (15) years did PFINA come forward to present the deed and claim the subject properties. The said deed and the circumstances surrounding its issuance are suspect. The deed may be fabricated and the signatures of the parties and witnesses forged.

The CA gave credence to the objections interposed by private respondents. In its Resolution, it cited badges or indicia of fraud in the alleged acquisition of the property by PFINA as well as the cancellation of the title of the Paels and issuance of a new title in favor of PFINA.

ISSUE:

Whether or not PFINA can acquired the property subject of the litigation for substantial and valuable consideration from the Paels by virtue of a deed of assignment

HELD:

NO. The Court ruled that the trial court's decision is not only erroneous but is void from the beginning as the title was given to the Paels despite the fact that they were not parties and had been total strangers to the said case. They were never impleaded nor did they intervene in the case wherein the disputed property was awarded to them. The Court also upheld the appellate court in ruling that Maria Destura's complaint should have been dismissed on the ground of litis pendentia and res judicata, considering that her husband Pedro Destura had earlier filed a complaint against respondents Chin and Mallari, for, among others, annulment of their titles and annulment of the MOA.

The highly anomalous and deplorable conduct of the RD in registering the reinstated title in favor of the Paels who were non-parties to the case, inspite of his being a defendant in the case, resulted in the sale of this vast tract of land by the Paels to anybody right and left, including PFINA, and presumably others who have not come forward to intervene in this case.

The Paels, having no longer any right over the subject property, had nothing to sell to PFINA. Therefore, the title obtained by PFINA allegedly by virtue of the deed of assignment executed by the Paels in its favor is a nullity. Worse, the RD connived and conspired with PFINA when the former registered the deed of assignment on the basis of fake and spurious documents.

Further, the CA also found it unbelievable for PFINA to acquire extremely valuable real estate in Quezon City for only P30.00 per square meter. In 1983, PFINA Mining and Exploration, Inc. was a mining company. It changed its corporate name to PFINA Properties, Inc., only on January 22, 1998, six (6) days before filing its petition-in-intervention with the CA. In its petition, PFINA claimed to have bought urban real estate in 1983, notwithstanding that at the time it was still a mining company which had no business dabbling in the highly speculative urban real estate trade.

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BOMAN ENVIRONMENTAL DEVELOPMENT CORPORATION vs. COURT OF APPEALS and NILCAR Y. FAJILAN

BOMAN ENVIRONMENTAL DEVELOPMENT CORPORATION vs. COURT OF APPEALS and NILCAR Y. FAJILAN

   April 25, 2018       FJ

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BOMAN ENVIRONMENTAL DEVELOPMENT CORPORATION vs. HON. COURT OF APPEALS and NILCAR Y. FAJILAN

G.R. No. 77860. November 22, 1988.

FACTS:

On May 7, 1984, Nilcar Fajilan offered in writing to resign as President and Member of the BOD of Boman Environmental Development Corporation (BEDECO) and to sell to the company all his shares, rights, and interests therein for P300,000 plus the transfer to him of the company's Isuzu pick-up truck which he had been using.

At a meeting of the BOD of BEDECO on June 14, 1984, Fajilan's resignation was accepted and new officers were elected. Fajilan's offer to sell his shares to the corporation was approved, the Board promising to pay for them on a staggered basis from July 15, 1984 to December 15, 1984

The resolution of the Board was communicated to Fajilan in the following letter-agreement dated June 25, 1984 to which he affixed his conformity.

A PN dated July 3, 1984, was signed by BEDECO'S new president, Alfredo Pangilinan, in the presence of 2 directors, committing BEDECO to pay him P300,000 over a 6-month period from July 15, 1984 to December 15, 1984. The PN provided as follows:

P100,000.00 — July 15, 1984

75,000.00 — Sept. 15, 1984

62,500.00 — October 15, 1984

62,500.00 — Dec. 15, 1984

However, BEDECO paid only P50,000 on July 15, 1984 and P50,000 on August 31, 1984 and defaulted in paying the balance of P200,000. Fajilan filed a complaint in the RTC for collection of the balance, but it was dismissed for lack of jurisdiction. MTC ruled that the controversy arose out of intra-corporate relations, hence, the SEC has original and exclusive jurisdiction to hear and decide it.

The CA set aside the dismissal and directed the Judge to take cognizance of the case. In its decision, the CA characterized the case as a suit for collection of a sum of money as Fajilan "was merely suing on the balance of the PN” which BEDECO failed and refused to pay in full. The intra-corporate matter of the resignation of Fajilan as Member of the BOD and President of corp has long been settled without issue.

ISSUE/s:

1)     Whether or not a suit brought by a withdrawing stockholder against the corporation to enforce payment of the balance due on the consideration (evidenced by a corporate promissory note) for the surrender of his shares of stock and interests in the corporation, involves an intra-corporate dispute;

2)     Whether the SEC has exclusive supervision, control and regulatory jurisdiction to investigate whether the corporation has unrestricted retained earnings to cover the payment for the shares, and whether the purchase is for a legitimate corporate purpose;

3)     Whether or not sale of shares of stocks not fully paid, retains membership of Fajilan as stockholder.

HELD:

1)  YES. The case at bar involves an intra-corporate controversy because the parties are a stockholder and the corporation. As correctly observed by the trial court, the perfection of the agreement to sell Fajilan's participation and interests in BEDECO and the execution of the PN for payment of the price of the sale did not remove the dispute from the coverage of Section 5(b) of P.D. No. 902, for both the said agreement and the PN arose from intra-corporate relations. Indeed, all the signatories of both documents were stockholders of the corporation at the time of signing the same. It was an intra-corporate transaction; hence, this suit is an intra-corporate controversy.

2)     YES. The SEC has exclusive supervision, control and regulatory jurisdiction to investigate whether the corporation has unrestricted retained earnings to cover the payment for the shares, and whether the purchase is for a legitimate corporate purpose as provided in Sections 41 and 122 of the Corporation Code.

3) YES. In Fajilan's offer to resign, it was stated, "effective as soon as my shares and interests thereto are sold fully paid". This implied that he would remain a stockholder until his shares and interests were fully paid for. One cannot be a director or president of a corporation unless he is also a stockholder thereof. The fact that he was replaced as president of the corporation did not necessarily mean that he ceased to be a stockholder considering how the corporation failed to complete payment of the consideration for the purchase of his shares of stock and interests in the goodwill of the business. There has been no actual transfer of his shares to the corporation. In the books of the corporation he is still a stockholder.

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MID-PASIG LAND DEVELOPMENT CORPORATION vs. MARIO TABLANTE, doing business under the name and style ECRM ENTERPRISES, et al.

MID-PASIG LAND DEVELOPMENT CORPORATION vs. MARIO TABLANTE, doing business under the name and style ECRM ENTERPRISES, et al.

   April 25, 2018       FJ

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MID-PASIG LAND DEVELOPMENT CORPORATION vs. MARIO TABLANTE, doing business under the name and style ECRM ENTERPRISES; ROCKLAND CONSTRUCTION COMPANY; LAURIE LITAM; and MC HOME DEPOT, INC.

G.R. No. 162924. February 4, 2010

FACTS:

Mid-Pasig Land is the registered owner of a piece of land situated in Pasig City.  On December 6, 1999, Mid-Pasig represented by its Chairman and President, Ronaldo Salonga, and ECRM Enterprises, represented by its proprietor, Mario Tablante, executed an agreement whereby the former would lease to the latter an area, approximately 1 hectare of the aforesaid land, for a period of 3 months, to be used as the staging area for the Home and Garden Exhibition Fair.

Mid-Pasig eventually learned that Tablante had executed a Contract of Lease with MC Home Depot, Inc. on November 26, 1999 over the same parcel of land. On March 6, 2000, the date of the expiration of the Lease Agreement, Tablante assigned all his rights and interests under the said agreement to Laurie Litam and/or Rockland Construction Company, Inc. under a Deed of Assignment. On the same date, Mid-Pasig demanded that respondents vacate the land.

Rockland filed a case for SP with the RTC, compelling Mid-Pasig to execute a new lease contract for another 3 years. Consequently, Mid-Pasig filed a case for unlawful detainer against respondents to the MTC.

In the case of UD, the trial court held that it has no jurisdiction over the subject matter because it is incapable of pecuniary estimation. On appeal, the RTC affirmed in toto.  The CA resolved to dismiss the petition on the ground that the verification and certification against non-forum shopping was signed by a certain Antonio A. Merelos as General Manager of the Mid-Pasig without attaching therewith a Corporate Secretary's certificate or board resolution that he is authorized to sign for and on behalf of the petitioner.

ISSUE:

Whether or not the General Manager may sign the verification and CANFS on behalf of the corporation even without Corp Sec's cert or board resolution

HELD:

YES. The General Manager may sign the verification and CANFS on behalf of the corporation even without Corp Sec's cert or board resolution.

In Sec. 23, in relation to Sec. 25 of the Corporation Code, clearly provides that all corporate powers are exercised, all business conducted, and all properties controlled by the board of directors. A corporation has a separate and distinct personality from its directors and officers and can only exercise its corporate powers through the BOD. Thus, it is clear that an individual corporate officer cannot solely exercise any corporate power pertaining to the corporation without authority from the BOD.

HOWEVER, it is recognized the authority of some corporate officers to sign the verification and certification against forum shopping without need of a board resolution:

(1) The Chairperson of the Board of Directors;

(2) The President of a corporation;

(3) The General Manager or Acting General Manager;

(4) Personnel Officer; and

(5) An Employment Specialist in a labor case. 

The determination of the sufficiency of the authority was done on a case to case basis. In the case at bar, it is thus clear that the failure to attach the Secretary's Certificate, attesting to GM Antonio Merelos's authority to sign the Verification and Certification of Non-Forum Shopping, should not be considered fatal to the filing of the petition. Nonetheless, the requisite board resolution was subsequently submitted to the CA, together with the pertinent documents. Considering that petitioner substantially complied with the rules, the dismissal of the petition was, therefore, unwarranted

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