Académique Documents
Professionnel Documents
Culture Documents
HELD:
Yes.
Sec.
30.Compensation
of
directors.
In
the
absence
of
any
provision
in
the
by-laws
fixing
their
compensation,
the
directors
shall
not
receive
any
compensation,
as
such
directors,
except
for
reasonable
per
diems:
Provided,
however,
That
any
such
compensation
(other
than
per
diems)
may
be
granted
to
directors
by
the
vote
of
the
stockholders
representing
at
least
a
majority
of
the
outstanding
capital
stock
at
a
regular
or
special
stockholders'
meeting.
In
no
case
shall
the
total
yearly
compensation
of
directors,
as
such
directors,
exceed
ten
(10%)
percent
of
the
net
income
before
income
tax
of
the
corporation
during
the
preceding
year.
There
is
no
argument
that
directors
or
trustees,
as
the
case
may
be,
are
not
entitled
to
salary
or
other
compensation
when
they
perform
nothing
more
than
the
usual
and
ordinary
duties
of
their
office.
This
rule
is
founded
upon
a
presumption
that
directors/trustees
render
service
gratuitously,
and
that
the
return
upon
their
shares
adequately
furnishes
the
motives
for
service,
without
compensation.
Under
the
foregoing
section,
there
are
only
two
(2)
ways
by
which
members
of
the
board
can
be
granted
compensation
apart
from
reasonable
per
diems:
(1)
when
there
is
a
provision
in
the
by-laws
fixing
their
compensation;
and
(2)
when
the
stockholders
representing
a
majority
of
the
outstanding
capital
stock
at
a
regular
or
special
stockholders'
meeting
agree
to
give
it
to
them.
The
proscription,
however,
against
granting
compensation
to
directors/trustees
of
a
corporation
is
not
a
sweeping
rule.
Worthy
of
note
is
the
clear
phraseology
of
Section
30
which
states:
.
.
.
[T]he
directors
shall
not
receive
any
compensation,
as
such
directors
.
.
.
The
phrase
as
such
directors
is
not
without
significance
for
it
delimits
the
scope
of
the
prohibition
to
compensation
given
to
them
for
services
performed
purely
in
their
capacity
as
directors
or
trustees.
The
unambiguous
implication
is
that
members
of
the
board
may
receive
the
disregard
of
its
independent
being
and
the
lifting
of
the
corporate
veil.
As
a
rule,
this
situation
might
arise
when
a
corporation
is
used
to
evade
a
just
and
due
obligation
or
to
justify
a
wrong,
to
shield
or
perpetrate
fraud,
to
carry
out
similar
other
unjustifiable
aims
or
intentions,
or
as
a
subterfuge
to
commit
injustice
and
so
circumvent
the
law.
In
Tramat
Mercantile,
Inc.,
vs.
Court
of
Appeals,
the
Court
has
collated
the
settled
instances
when,
without
necessarily
piercing
the
veil
of
corporate
fiction,
personal
civil
liability
can
also
be
said
to
lawfully
attach
to
a
corporate
director,
trustee
or
officer;
to
wit:
When
"(1)He
assents
(a)
to
a
patently
unlawful
act
of
the
corporation,
or
(b)
for
bad
faith
or
gross
negligence
in
directing
its
affairs,
or
(c)
for
conflict
of
interest,
resulting
in
damages
to
the
corporation,
its
stockholders
or
other
persons;
"
(2)He
consents
to
the
issuance
of
watered
stocks
or
who,
having
knowledge
thereof,
does
not
forthwith
file
with
the
corporate
secretary
his
written
objection
thereto;
"
(3)He
agrees
to
hold
himself
personally
and
solidarily
liable
with
the
corporation;
or
"
(4)He
is
made,
by
a
specific
provision
of
law,
to
personally
answer
for
his
corporate
action."
The
case
of
petitioner
is
way
off
these
exceptional
instances.
It
is
not
even
shown
that
petitioner
has
had
a
direct
hand
in
the
dismissal
of
private
respondent
enough
to
attribute
to
him
(petitioner)
a
patently
unlawful
act
while
acting
for
the
corporation.
Neither
can
Article
289
of
the
Labor
Code
be
applied
since
this
law
specifically
refers
only
to
the
imposition
of
penalties
under
the
Code.
It
is
undisputed
that
the
termination
of
petitioner's
employment
has,
instead,
been
due,
collectively,
to
the
need
for
a
further
mitigation
of
losses,
the
onset
of
the
rainy
season,
the
insurgency
problem
in
Sorsogon
and
the
lack
of
funds
to
further
support
the
mining
operation
in
Gatbo.
There
appears
to
be
no
evidence
on
record
that
he
acted
maliciously
or
in
bad
faith
in
terminating
the
services
of
private
respondent.
His
act,
therefore,
was
within
the
scope
of
his
authority
and
was
a
corporate
act.
"It
is
basic
that
a
corporation
is
invested
by
law
with
a
personality
separate
and
ISSUE:
1. WON
the
rescission
of
contract
was
justified
2. WON
petitioner-spouses
as
corporate
officers
were
grossly
negligent
in
ordering
the
revisions
on
the
construction
plan
without
the
knowledge
and
consent
of
the
respondent-spouses.
HELD:
1. YES.
E.O.
No.
1008
or
the
Constructions
Industry
Arbitration
Law
vests
on
the
Construction
Industry
Arbitration
Commission
(CIAC)
original
and
exclusive
jurisdiction
over
disputes
arising
from
or
connected
with
construction
contracts
entered
into
by
parties
who
have
agreed
to
submit
their
case
to
voluntary
arbitration.
Section
19
of
E.O.
No.
1008
provides
that
its
arbitral
award
shall
be
appealable
to
the
Supreme
Court
only
on
questions
of
law.
There
is
a
question
of
law
when
the
doubt
or
difference
in
a
given
case
arises
as
to
what
the
law
is
on
a
certain
set
of
facts,
and
there
is
a
question
of
fact
when
the
doubt
arises
as
to
the
truth
or
falsity
of
the
alleged
facts.
Thus,
for
a
question
to
be
one
of
law,
it
must
not
involve
an
examination
of
the
probative
value
of
the
evidence
presented
by
the
parties
and
there
must
be
no
doubt
as
to
the
veracity
or
falsehood
of
the
facts
alleged.
In
the
case
at
bar,
it
is
readily
apparent
that
petitioners
are
raising
questions
of
fact.
In
their
first
assigned
error,
petitioners
claim
that
at
the
time
of
rescission,
they
had
completed
80%
of
the
construction
work
and
still
have
15
days
to
finish
the
project.
They
likewise
insist
that
they
constructed
the
building
in
accordance
with
the
contract
and
any
modification
on
the
plan
was
with
the
consent
of
the
respondents.
However,
these
claims
were
refuted
by
evidences
w/c
was
taken
during
the
arbitration
proceedings
and
even
upheld
by
the
CA
(among
them
were
as
follows:
there
were
deviations
from
the
approved
plans
and
2.
Yes.
As
a
general
rule,
the
officers
of
a
corporation
are
not
personally
liable
for
their
official
acts
unless
it
is
shown
that
they
have
exceeded
their
authority.
However,
the
personal
liability
of
a
corporate
director,
trustee
or
officer,
along
with
corporation,
may
so
validly
attach
when
he
assents
to
a
patently
unlawful
act
of
the
corporation
or
for
bad
faith
or
gross
negligence
in
directing
its
affairs.
Following
the
findings
of
public
respondent
(CIAC)
as
when
CGI/DAVIDS
were
asked
whether
the
Building
was
underdesigned
considering
the
poor
quality
of
the
soil,
Engr.
Villasenor
defended
his
structural
design
as
adequate.
He
admitted
that
the
revision
of
the
plans
which
resulted
in
the
construction
of
additional
columns
was
in
pursuance
of
the
request
of
Engr.David
to
revise
the
structural
plans
to
provide
for
a
significant
reduction
of
the
cost
of
construction.
When
Engr.
David
was
asked
for
the
justification
for
the
revision
of
the
plans,
he
confirmed
that
he
wanted
to
reduce
the
cost
of
construction.
.
.
.
Clearly,
the
case
at
bar
does
not
raise
any
genuine
issue
of
law.
Hence
the
petition
was
dismissed
and
ruling
of
arbitrator
was
affirmed.
Why?
(baka
itanong)
We
reiterate
the
rule
that
factual
findings
of
construction
arbitrators
are
final
and
conclusive
and
not
reviewable
by
this
Court
on
appeal,
except
when
the
petitioner
proves
affirmatively
that:
(1)
the
award
was
procured
by
corruption,
fraud
or
other
undue
means;
(2)
there
was
evident
partiality
or
corruption
of
the
arbitrators
or
of
any
of
them;
(3)
the
arbitrators
were
guilty
of
misconduct
in
refusing
to
postpone
the
hearing
upon
sufficient
cause
shown,
or
in
refusing
to
hear
evidence
pertinent
and
material
to
the
controversy;
(4)
one
or
more
of
the
arbitrators
were
disqualified
to
act
as
such
under
section
nine
of
Republic
Act
No.
876
and
willfully
refrained
from
disclosing
such
disqualifications
or
of
any
other
misbehavior
by
which
the
rights
of
any
party
have
been
materially
prejudiced;
or
(5)
the
arbitrators
exceeded
their
powers,
or
so
imperfectly
executed
them,
that
a
mutual,
final
and
definite
award
upon
the
subject
matter
submitted
to
them
was
not
made.
Petitioners
failed
to
show
that
any
of
these
exceptions
applies
to
the
case
at
bar.
MALAYANG
SAMAHAN
NG
MGA
MANGGAGAWA
SA
M.
GREENFIELD
vs.
RAMOS
G.R.
No.
113907
-
April
20,
2001
FACTS:
Petitioners
allege
that
this
Court
committed
patent
and
palpable
error
in
holding
that
the
respondent
company
officials
cannot
be
held
personally
liable
for
damages
on
account
of
employees
dismissal
because
the
employer
corporation
has
a
personality
separate
and
distinct
from
its
officers
who
merely
acted
as
its
agents
whereas
the
records
clearly
established
that
respondent
company
officers
Saul
Tawil,
Carlos
T.
Javelosa
and
Renato
C.
Puangco
have
caused
the
hasty,
arbitrary
and
unlawful
dismissal
of
petitioners
from
work;
that
as
top
officials
of
the
respondent
company
who
handed
down
the
decision
dismissing
the
petitioners,
they
are
responsible
for
acts
of
unfair
labor
practice;
that
these
respondent
corporate
officers
should
not
be
considered
as
mere
agents
of
the
company
but
the
wrongdoers.
Petitioners
further
contend
that
while
the
case
was
pending
before
the
public
respondents,
the
respondent
company,
in
the
early
part
of
February
1990,
began
removing
its
machineries
and
equipment
from
its
plant
located
at
Merville
Park,
Paranaque
and
began
diverting
jobs
intended
for
the
regular
employees
to
its
sub-contractor/satellite
branches;
that
the
respondent
company
officials
are
also
the
officers
and
incorporators
of
these
satellite
companies
as
shown
in
their
articles
of
incorporation
and
the
general
information
sheet.
They
added
that
during
their
ocular
inspection
of
the
plant
site
of
the
respondent
company,
they
found
that
the
same
is
being
used
by
other
unnamed
business
entities
also
engaged
in
the
manufacture
of
garments.
Petitioners
further
claim
that
the
respondent
company
no
longer
operates
its
plant
site
as
M.
Greenfield
thus
it
will
be
very
difficult
for
them
to
fully
enforce
and
implement
the
courts
decision.
Although
there
were
earlier
decisions
of
this
Court
in
labor
cases
where
corporate
officers
were
held
to
be
personally
liable
for
the
payment
of
wages
and
other
money
claims
to
its
employees,
we
find
those
rulings
inapplicable
to
this
case.
PRIME
WHITE
CEMENT
CORPORATION
vs.
IAC
G.R.
No.
68555
March
19,
1993
FACTS:
On
July
16,
1969,
Alejandro
Te
and
Prime
White
Cement
Corp.
thru
its
President
Zosimo
Falcon
and
its
Chairman
of
the
Board
Justo
Trazo
entered
into
a
dealership
agreement
whereby:
a.
b.
c.
d.
Relying
heavily
on
the
dealership
agreement,
Te
entered
into
a
contract
to
supply
with
several
hardware
stores
and
sell
to
them
20,000
allocated
cement
bags
by
September
1970.
Thereafter,
Te
informed
Prime
Corp.
that
he
is
preparing
to
open
another
letter
of
credit
to
cover
the
delivery
for
September
1970.
However,
the
corporations
board
imposed
the
following
conditions:
a.
b.
c.
d.
e.
f.
They
made
several
demands
against
Prime
White
Corp.
to
comply
with
the
dealership
agreement
but
the
latter
refused
forcing
Te
to
cancel
his
contract
to
supply
with
the
hardwares.
Prime
white
entered
into
an
exclusive
dealership
agreement
with
Napoleon
Co.
Hence,
the
suit.
RTC:
Ruled
in
favour
of
Te.
CA:
Affirmed
RTCs
decision.
ISSUE:
WON
the
dealership
agreement
is
valid
and
enforceable
contract.
RULING:
NO.
Under
the
Corporation
Law,
which
was
then
in
force
at
the
time
this
case
arose,
as
well
as
under
the
present
Corporation
Code,
all
corporate
powers
shall
be
exercised
by
the
Board
of
Directors,
except
as
otherwise
provided
by
law.
Although
it
cannot
completely
abdicate
its
power
and
responsibility
to
act
for
the
juridical
entity,
the
Board
may
expressly
delegate
specific
powers
to
its
President
or
any
of
its
officers.
In
the
absence
of
such
express
delegation,
a
contract
entered
into
by
its
President,
on
behalf
of
the
corporation,
may
still
bind
the
corporation
if
the
board
should
ratify
the
same
expressly
or
impliedly.
Implied
ratification
may
take
various
forms
-
like
silence
or
acquiescence;
by
acts
showing
approval
or
adoption
of
the
contract;
or
by
acceptance
and
retention
of
benefits
flowing
therefrom.
Furthermore,
even
in
the
absence
of
express
or
implied
authority
by
ratification,
the
President
as
such
may,
as
a
general
rule,
bind
the
corporation
by
a
contract
in
the
ordinary
course
of
business,
provided
the
same
is
reasonable
under
the
circumstances.
These
rules
are
basic,
but
are
all
general
and
thus
quite
flexible.
They
apply
where
the
President
or
other
officer,
purportedly
acting
for
the
corporation,
is
dealing
with
a
third
person,
i.e.,
person
outside
the
corporation.