GIRLY ICO v.

STI
09 July 2014

G.R. No. 185100

Del Castillo, J.

TOPIC IN SYLLABUS: Corporate Juridical Personality; Doctrine of Separate Juridical Personality

SUMMARY: Ico was demoted when her position was allegedly abolished after STIs merger. She was also subjected to
embarrassment and yelled at by former CEO, Fernandez. She filed a complaint against STI, the former CEO, and the new
CEO. SC held that only the former CEO was liable because some of his actions were without sanction of STI itself, and
were committed outside of the authority given to him by the school; they bordered on the personal, rather than official.
DOCTRINE: Obligations incurred as a result of the directors and officers acts as corporate agents, are not their personal
liability but the direct responsibility of the corporation they represent. As a rule, they are only solidarily liable with the
corporation for the illegal termination of services of employees if they acted with malice or bad faith.
PROCEDURAL ANTECEDENTS: Petition for Review on Certiorari assailing CAs dismissal of Icos petition vs. STI
FACTS:
Girly Ico held several positions at STI from 1997-2003. She was initially hired as a faculty member, was later
promoted to Dean, then, she was made Chief Operating Officer. In 2003, during her stint as COO and School
Administrator of STI-Makati, a Plan of Merger was executed between STI and STI College Makati (Inc.), whereby
the latter would be absorbed by STI. STI College Makati (Inc.) thus ceased to exist.
2004 Pursuant to STIs organizational restructuring, Icos post as COO at STI-Makati was abolished. She was
designated as Compliance Manager and was given a lower salary. STI conducted investigations and allegedly
discovered several irregularities in Icos work. She was also subjected to other embarrassments, including a
meeting with STI Makatis CEO (Fernandez) repeatedly shouted at her. Soon after petitioner was removed from
the position, Fernandez was appointed to take her place as STI-Makati COO; his appointment was even publicly
announced via an official communication disseminated company-wide.
2005 Ico was dismissed. She filed a complaint against STI, Monico Jacob (new President and CEO), and Peter
Fernandez (former CEO; later took over Icos post as COO) before the NLRC.
o LA: Ico was illegally dismissed. STI was ordered to reinstate her+ pay full back wages.
o NLRC reversed. Icos transfer to her new position as Compliance Manager became necessary, as the
position of STI-Makati COO was abolished as a result of a reorganization that was implemented pursuant
to the merger. CA affirmed.
ISSUES & RULINGS:
(1) W/N there was constructive illegal dismissal YES. She should be reinstated.
(2) W/N all respondents can be held responsible NO. Only Fernandez can be held liable.
PETITIONER ICO ARGUES: Her appointment to the position of Compliance Manager was in fact a demotion. She was
subjected to harassment and discrimination, humiliated (at one point, she wasnt informed of a staff outing and she was
left behind) and became the victim of STIs fraudulent scheme to illegally oust her from her position as STI-Makati COO.
RESPONDENTS ARGUE: Petitioners transfer was in line with such merger and reorganization; no bad faith may thus be
inferred from their actions. Also, petitioners transfer did not amount to a demotion in rank, as the positions of COO and
Compliance Manager are of equal importance.
RATIO:
1. It appears that the position of STI-Makati COO was actually never abolished. Fernandez just replaced her.
2. The Court fails to discern any bad faith or negligence on the part of respondent Jacob. The principal character that
figures prominently in this case is Fernandez; he alone relentlessly caused petitioners hardships and suffering. He
alone is guilty of persecuting petitioner. Indeed, some of his actions were without sanction of STI itself, and were
committed outside of the authority given to him by the school; they bordered on the personal, rather than official.

VILLARAMA, BINKEE

COM LAW REV CASE #132

A corporation, as a juridical entity, may act only through its directors, officers and employees. Obligations
incurred as a result of the directors and officers acts as corporate agents, are not their personal liability
but the direct responsibility of the corporation they represent. As a rule, they are only solidarily liable
with the corporation for the illegal termination of services of employees if they acted with malice or bad
faith.
To hold a director or officer personally liable for corporate obligations, two requisites must concur:
(1) it must be alleged in the complaint that the director or officer assented to patently unlawful acts of
the corporation or that the officer was guilty of gross negligence or bad faith; and
(2) there must be proof that the officer acted in bad faith.

VILLARAMA, BINKEE

COM LAW REV CASE #132