G.R. No. 200070-71.

December 7, 2021, TOTAL OFFICE PRODUCTS

AND SERVICES, INC. V. CHANG, ET AL.

G.R. No. 200070-71 is a case decided by the Supreme Court of the Philippines on December 7,
2021, involving Total Office Products and Services, Inc. and Chang, et al. The case revolves
around the issue of whether the doctrine of corporate opportunity was violated when an
employee of Total Office Products and Services, Inc. (TOPROS) established a competing
business while still employed by TOPROS.

The doctrine of corporate opportunity is a legal principle that prohibits corporate officers and
directors from using their position to take personal advantage of opportunities that should
belong to the corporation. Essentially, the doctrine mandates that a fiduciary, such as a
corporate officer or director, must put the interests of the corporation ahead of his or her
personal interests.

In this case, the Supreme Court found that the employee in question, Chang, violated the
doctrine of corporate opportunity when he established a competing business while still
employed by TOPROS. The Court found that Chang used his position and access to TOPROS'
confidential information to his personal advantage, to the detriment of TOPROS.

The Court also noted that Chang had signed a non-compete clause in his employment contract
with TOPROS, which further demonstrated his awareness of his fiduciary duty to TOPROS.
Therefore, Chang's actions were found to be a breach of his duty of loyalty to the corporation,
which is a core aspect of the doctrine of corporate opportunity.

As a result, the Supreme Court upheld the lower court's ruling in favor of TOPROS, and
awarded damages to the company. This case serves as an important reminder to corporate
officers and directors of their duty to act in the best interests of the corporation, and to avoid any
actions that could be construed as a violation of the doctrine of corporate opportunity.
 AGRO FOOD AND PROCESSING CORP. VS. VITARICH
CORPORATION G.R. No. 217454, January 11, 2021

Issue: whether a corporate officer has the authority to amend an original contract without
actual authority from the corporation's board of directors

The case of Agro Food and Processing Corp. vs. Vitarich Corporation (G.R. No. 217454,
January 11, 2021) involves the issue of whether a corporate officer has the authority to amend
an original contract without actual authority from the corporation's board of directors.

In this case, Agro Food and Processing Corp. entered into a contract with Vitarich Corporation
for the supply of chicken products. However, a corporate officer of Vitarich Corporation made
amendments to the contract without actual authority from the corporation's board of directors.
Agro Food and Processing Corp. refused to accept the amended contract and filed a case
against Vitarich Corporation for breach of contract.

The court ruled in favor of Agro Food and Processing Corp., stating that the corporate officer did
not have the authority to amend the original contract without actual authority from the
corporation's board of directors. The court emphasized that the board of directors is the highest
policymaking body of a corporation and that the authority to make decisions on behalf of the
corporation rests solely with the board.

Furthermore, the court also stated that a corporate officer may only act within the scope of his or
her authority as provided by the corporation's by-laws or board resolutions. Any act beyond this
scope would be considered ultra vires and would not be binding on the corporation.

In conclusion, the case highlights the importance of corporate governance and the need for
corporate officers to act within the limits of their authority. Any act outside of their authority
would not be binding on the corporation and may lead to legal disputes and liabilities.

Topic: doctrine of apparent authority of corporate officers

The case of Agro Food and Processing Corp. vs. Vitarich Corporation, G.R. No. 217454,
January 11, 2021, involves the doctrine of apparent authority of corporate officers.
In this case, Vitarich Corporation filed a complaint for collection of sum of money against Agro
Food and Processing Corp., alleging that Agro Food and Processing Corp. failed to pay the
balance of the purchase price for the goods delivered to it.

Agro Food and Processing Corp. argued that the transaction was not authorized and that the
officer who entered into the transaction did not have the apparent authority to do so.
The Supreme Court ruled that apparent authority is derived not from the actual or real authority
of the officer but from the acts of the corporation which gave the impression of such authority.
The Court found that Agro Food and Processing Corp. had failed to prove that it took
reasonable steps to prevent the officer from appearing to have the authority to enter into the
transaction.

The Court also ruled that the principle of estoppel applies, since Agro Food and Processing
Corp., through the acts of its officers, led Vitarich Corporation. to believe that the transaction
was authorized.

Therefore, the Court held that Agro Food and Processing Corp. is liable to Vitarich Corporation.
for the unpaid balance of the purchase price, with legal interest from the date of demand until
full payment.

Overall, the case of Agro Food and Processing Corp. vs. Vitarich Corporation, G.R. No. 217454,
January 11, 2021, serves as a reminder of the importance of ensuring that corporate officers
have the actual authority to enter into transactions on behalf of the corporation, and the
consequences that may arise if the doctrine of apparent authority is invoked.
G.R. No. 210741, October 14, 2020, MARIA LEA JANE I. GESOLGON V.
CYBERONE PH., INC

G.R. No. 210741, October 14, 2020, Maria Lea Jane I. Gesolgon v. CyberOne Ph., Inc. is a
case where the Supreme Court of the Philippines ruled on the non-applicability of the doctrine of
piercing the corporate veil.

In this case, the petitioner, Maria Lea Jane I. Gesolgon, was a former employee of CyberOne
Ph., Inc. (CyberOne). She filed a complaint against CyberOne for illegal dismissal and non-
payment of benefits. However, the Labor Arbiter dismissed her complaint, and the National
Labor Relations Commission (NLRC) affirmed the Labor Arbiter's decision.

On appeal, the Court of Appeals (CA) reversed the decision of the NLRC and held CyberOne
liable for illegal dismissal and non-payment of benefits. The CA also applied the doctrine of
piercing the corporate veil, holding that CyberOne was merely a sham corporation and that its
real owner was the respondent, Raymund Neil L. Campos.

However, the Supreme Court reversed the CA's decision and held that the doctrine of piercing
the corporate veil was not applicable in this case. The Court noted that the mere fact that the
respondent was the owner of CyberOne did not automatically make him personally liable for the
company's obligations. The Court also observed that there was no evidence to show that
CyberOne was a sham corporation or that it was used to perpetrate fraud or injustice.

The Court emphasized that the doctrine of piercing the corporate veil should only be applied in
exceptional cases where the corporation is used as a shield to perpetrate fraud or injustice, or
where the corporate fiction is used to defeat public convenience, justify wrong, protect fraud, or
defend a crime. The Court also stressed that the burden of proof in piercing the corporate veil
cases rests on the party seeking to invoke the doctrine, and that the evidence required to
establish the fraud or injustice must be clear and convincing.

In conclusion, the Supreme Court held that the CA erred in applying the doctrine of piercing the
corporate veil in this case, and affirmed the NLRC's dismissal of the petitioner's complaint.
 G.R. No. 210906 / G.R. No. 211203, October 16, 2019, AGO REALTY &
DEVELOPMENT CORPORATION V. DR. ANGELITA GO

G.R. No. 210906 / G.R. No. 211203, October 16, 2019, is a case involving a derivative
suit filed by Dr. Angelita Go against AGO Realty & Development Corporation (AGO
Realty), its board of directors, and certain officers of the company.

Dr. Go alleged that the defendants committed acts of fraud and mismanagement, which
resulted in losses for AGO Realty and its shareholders. She claimed that the defendants
engaged in self-dealing and violated their fiduciary duties to the company and its
shareholders.

AGO Realty and the other defendants argued that Dr. Go did not have standing to file a
derivative suit because she did not own shares of the company at the time she filed the
suit. They also argued that her claims were without merit.

The Supreme Court ruled that Dr. Go had standing to file a derivative suit even though
she did not own shares of the company at the time she filed the suit. The Court noted
that under the Corporation Code, a shareholder may file a derivative suit on behalf of the
corporation even if he or she no longer owns shares in the corporation at the time the
suit is filed.

The Court also found that Dr. Go's claims had merit and ordered the defendants to pay
damages to AGO Realty. The Court held that the defendants engaged in self-dealing and
breached their fiduciary duties to the company and its shareholders. The Court also
found that the defendants had violated the Securities Regulation Code and ordered
them to pay fines.

Overall, this case highlights the importance of derivative suits in protecting the interests
of shareholders and holding corporate officers accountable for their actions. It also
underscores the need for companies to ensure that their officers and directors act in the
best interests of the company and its shareholders.

G.R. No. 212774, Wesleyan University-Philippines v. Guillermo T.

Maglaya, Sr.

In the case of G.R. No. 212774, Wesleyan University-Philippines v. Guillermo T. Maglaya, Sr.,
the Supreme Court of the Philippines was tasked with determining whether Maglaya, as a
member of the Board of Trustees of Wesleyan University-Philippines, was a corporate officer or
a mere employee.

The court held that Maglaya was a corporate officer, and therefore not entitled to security of
tenure as provided under the Labor Code. The court based its decision on the fact that Maglaya
was elected to the Board of Trustees, which was the highest policy-making body of the
university. The court noted that corporate officers are those who are "elected or appointed by
the board of directors or trustees to manage the corporation or a subsidiary or a business unit
thereof," and have "the power and authority to lay down and execute management policies
and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees."

The court also considered the nature of Maglaya's duties as a trustee, which included approving
budgets, appointing personnel, and setting policies for the university. The court concluded that
these duties were managerial in nature, and that Maglaya was therefore a corporate officer.

In reaching its decision, the court emphasized the distinction between corporate officers and
regular employees, noting that the former are appointed or elected to positions of authority and
exercise managerial functions, while the latter are primarily engaged in the performance of
manual, clerical, or technical work. The court also emphasized the importance of maintaining
the independence of the Board of Trustees, which would be compromised if its members were
considered employees entitled to security of tenure.

In conclusion, the Supreme Court of the Philippines held that Guillermo T. Maglaya, Sr., as a
member of the Board of Trustees of Wesleyan University-Philippines, was a corporate officer
and therefore not entitled to security of tenure as provided under the Labor Code.

In G.R. No. 212774, Wesleyan University-Philippines (WUP) filed a petition for review on
certiorari with the Supreme Court seeking to reverse and set aside the decision of the Court of
Appeals (CA) in CA-G.R. SP No. 133678, which declared Guillermo T. Maglaya, Sr. as a
corporate officer of WUP.

The issue in the case was whether or not Maglaya, as a member of the Board of Trustees of
WUP, was a corporate officer or a mere employee.

The Supreme Court ruled that Maglaya was a corporate officer of WUP. The Court considered
the powers and functions of the Board of Trustees as defined in the Corporation Code of the
Philippines and the by-laws of WUP, which included the power to appoint and remove corporate
officers, among others. The Court also noted that Maglaya held the position of Vice-Chairman of
the Board and was the Chairman of the Audit and Governance Committee, which further
strengthened his status as a corporate officer.

The Court emphasized that the determination of whether a person is a corporate officer or a
mere employee depends on the nature of the duties and responsibilities performed by the
person, rather than on the job title or designation. In this case, Maglaya's duties and
responsibilities as a member of the Board of Trustees went beyond those of a mere employee,
and he exercised significant control and authority over the affairs of the corporation.

Therefore, the Supreme Court upheld the decision of the CA and declared Maglaya as a
corporate officer of WUP.

G.R. No. 212774 is a case involving an intra-corporate dispute between Wesleyan

University-Philippines (Wesleyan) and Guillermo T. Maglaya, Sr. (Maglaya), a former
corporate officer of the university.

The case began when Maglaya filed a complaint for illegal dismissal, non-payment of
salaries, and damages against Wesleyan. In response, Wesleyan argued that the case
was an intra-corporate dispute that should be heard by the Securities and Exchange
Commission (SEC) rather than the labor arbiter.

The Labor Arbiter ruled in favor of Maglaya and ordered Wesleyan to pay his back
wages and separation pay. Wesleyan appealed the decision to the National Labor
Relations Commission (NLRC), but the NLRC affirmed the Labor Arbiter's ruling.

Wesleyan then filed a petition for certiorari with the Court of Appeals (CA), arguing that
the case was an intra-corporate dispute and should be heard by the SEC. The CA denied
the petition and upheld the NLRC's decision.

Wesleyan appealed the case to the Supreme Court (SC). In its decision, the SC noted
that Maglaya was a corporate officer of Wesleyan and that his complaint was related to
his dismissal as a corporate officer. Therefore, the case was an intra-corporate dispute
that fell under the jurisdiction of the SEC.

The SC remanded the case to the NLRC with the instruction to dismiss the complaint
and for Maglaya to file a complaint with the SEC instead. The SC also stated that the
NLRC should have dismissed the complaint for lack of jurisdiction and that the CA erred
in upholding the NLRC's decision.

In conclusion, the case of G.R. No. 212774, January 23, 2017, focused on the dismissal
of a corporate officer and whether it constituted an intra-corporate dispute that should
be heard by the SEC. The SC ultimately ruled that the case fell under the jurisdiction of
the SEC and should have been dismissed by the NLRC.
G.R. No. 210906 / G.R. No. 211203, October 16, 2019, AGO REALTY & DEVELOPMENT
CORPORATION V. DR. ANGELITA GO

In the case of G.R. No. 210906 and G.R. No. 211203, the main issue revolved around
the derivative suit. A derivative suit is a type of lawsuit that a shareholder can file on
behalf of a corporation against a third party who has allegedly harmed the corporation.

In G.R. No. 210906, the respondents filed a derivative suit on behalf of AGO Realty &
Development Corporation (ARDC) against its officers and directors for breach of
fiduciary duty and mismanagement. The petitioners argued that the respondents
lacked the legal standing to file the derivative suit since they were no longer
shareholders of the corporation at the time of the filing.

The Supreme Court ruled that the respondents had the legal standing to file the
derivative suit, even if they were no longer shareholders at the time of the filing. The
Court cited Section 1, Rule 8 of the Rules of Court, which states that a real party-in-
interest is one who stands to be benefited or injured by the judgment in the suit. In this
case, the respondents were former shareholders who alleged that the actions of the
officers and directors caused harm to the corporation. Therefore, the respondents had
the legal standing to file the derivative suit on behalf of the corporation.

In G.R. No. 211203, Dr. Angelita F. Ago filed a derivative suit against AGO Realty &
Development Corporation, its officers and directors for breach of fiduciary duty and
mismanagement. The respondents argued that the derivative suit was barred by the
doctrine of res judicata since a similar case was already filed and dismissed.

The Supreme Court ruled that the doctrine of res judicata did not apply to the case
since the previous case was filed by different plaintiffs who had different causes of
action. The Court also ruled that Dr. Angelita F. Ago had the legal standing to file the
derivative suit since she was a shareholder of the corporation.

Overall, the case of G.R. No. 210906 and G.R. No. 211203 highlights the importance of
the derivative suit in protecting the interests of shareholders and the corporation. It
also emphasizes the legal standing of shareholders to file a derivative suit, even if
they are no longer shareholders at the time of the filing.
 ISSUE: whether or not the petitioners may sue on behalf of ARDC absent a resolution
or any other grant of authority from its Board of Directors sanctioning the institution of
the case

The case of AGO Realty & Development Corporation (ARDC), Emmanuel F. Ago, and
Corazon Castañeda-Ago v. Dr. Angelita F. Ago, Teresita Paloma-Apin, and Maribel
Amaro (G.R. No. 210906, October 16, 2019) revolves around the issue of whether or
not the petitioners can sue on behalf of ARDC without a resolution or any other grant
of authority from its Board of Directors authorizing the filing of the case.

ARDC is a corporation engaged in real estate development and management, with

Emmanuel F. Ago and Corazon Castañeda-Ago as its president and treasurer,
respectively. Dr. Angelita F. Ago, Teresita Paloma-Apin, and Maribel Amaro are
shareholders of ARDC, holding a combined 72.5% of its outstanding capital stock.

In 2006, ARDC entered into a lease contract with Dr. Angelita F. Ago for the use of a
portion of a building owned by her. However, ARDC stopped paying the rent, prompting
Dr. Ago to file a complaint for ejectment and damages against ARDC.

The case eventually reached the Supreme Court, which ruled in favor of Dr. Ago and
ordered ARDC to vacate the premises and pay the rental arrears and damages. Despite
the court order, ARDC refused to comply, prompting Dr. Ago to file a motion for
execution with the trial court.

In response, ARDC filed a motion to quash the writ of execution, arguing that it was not
a party to the lease contract and that the individuals who signed the contract on its
behalf did not have the authority to do so. The trial court denied the motion, prompting
ARDC to file a petition for certiorari with the Court of Appeals.

The Court of Appeals dismissed the petition, ruling that ARDC had no legal standing to
sue because it had no authority from its Board of Directors to file the case. The
petitioners then filed a petition for review with the Supreme Court, arguing that they
had the authority to file the case under the doctrine of derivative suit.

The Supreme Court ruled against the petitioners, stating that they had no authority to
file the case on behalf of ARDC without a resolution or any other grant of authority
from its Board of Directors authorizing the filing of the case. The Court explained that
the doctrine of derivative suit, which allows shareholders to file a case on behalf of a
corporation, only applies if the corporation's Board of Directors refuses or fails to sue,
or if the corporation is under the control of wrongdoers.
 In this case, the Court found no evidence that ARDC's Board of Directors had refused
or failed to sue, or that the corporation was under the control of wrongdoers.
Therefore, the petitioners had no authority to file the case on behalf of ARDC.

In conclusion, the case of AGO Realty & Development Corporation (ARDC), Emmanuel
F. Ago, and Corazon Castañeda-Ago v. Dr. Angelita F. Ago, Teresita Paloma-Apin, and
Maribel Amaro highlights the importance of corporate governance and the need for a
corporation's Board of Directors to authorize any legal action on its behalf. The case
also clarifies the doctrine of derivative suit and its limitations.

In the case of AGO Realty & Development Corporation (ARDC), Emmanuel F. Ago, and
Corazon Castañeda-Ago v. Dr. Angelita F. Ago, Teresita Paloma-Apin, and Maribel
Amaro, the main issue was the application of the doctrine of derivative suit filed by the
petitioners.

The petitioners, who were majority shareholders of AGO Realty & Development
Corporation (ARDC), filed a derivative suit on behalf of the corporation against some
of its officers and directors, including Dr. Angelita F. Ago, who was a minority
shareholder and a director of the corporation. The petitioners alleged that the
respondents committed various acts of fraud and mismanagement, resulting in
damages to the corporation.

The respondents argued that the petitioners did not comply with the requirements for
a derivative suit, particularly the requirement of making a demand on the corporation
to file the suit or showing that such demand would be futile. The respondents also
argued that the petitioners did not have the legal standing to file the suit on behalf of
the corporation.

The Supreme Court, in its decision, upheld the respondents' arguments and dismissed
the petitioners' derivative suit. The Court noted that the petitioners failed to comply
with the demand requirement, as they did not show that a demand on the corporation
would be futile. The Court also noted that the petitioners did not have the legal
standing to file the suit, as they did not allege any personal injury or damage to their
own rights as shareholders or officers of the corporation.

The Court explained that a derivative suit is a remedy available to shareholders of a

corporation when the corporation fails to enforce its own rights. However, the Court
stressed that a derivative suit should not be used as a tool for majority shareholders to
oppress minority shareholders or to advance their personal interests.

In this case, the Court found that the petitioners' derivative suit was filed primarily to
advance their personal interests as majority shareholders and not to protect the
interests of the corporation. Thus, the Court dismissed the derivative suit and upheld
the respondents' right to recover damages for the petitioners' abuse of the derivative
suit remedy.

In summary, the case of AGO Realty & Development Corporation (ARDC), Emmanuel F.
Ago, and Corazon Castañeda-Ago v. Dr. Angelita F. Ago, Teresita Paloma-Apin, and
Maribel Amaro highlights the importance of complying with the requirements for a
derivative suit and the need to ensure that such suits are filed for the proper purpose
of protecting the interests of the corporation and not for personal gain.

In the case of AGO Realty & Development Corporation (ARDC) et al. v. Dr. Angelita F.
Ago, Teresita Paloma-Apin, and Maribel Amaro, the Supreme Court of the Philippines
discussed the importance of a board resolution before a shareholder can file a
derivative suit on behalf of the corporation.

The petitioners, ARDC, Emmanuel F. Ago, and Corazon Castañeda-Ago, filed a

complaint for damages against respondents, Dr. Angelita F. Ago, Teresita Paloma-
Apin, and Maribel Amaro, alleging that they committed fraud and mismanagement in
their capacity as officers and directors of ARDC. The respondents filed a motion to
dismiss, arguing that the petitioners did not have the legal capacity to sue on behalf of
ARDC because they failed to comply with the requirements for filing a derivative suit.

The Supreme Court ruled in favor of the respondents, stating that the petitioners did
not have the legal standing to file a derivative suit on behalf of ARDC. The Court
emphasized that before a shareholder can file a derivative suit, he or she must comply
with the requirements under Section 1, Rule 8 of the Rules of Court, which includes a
demand for the corporation to sue, and the corporation's refusal or failure to do so.
Moreover, the Court stressed that a board resolution authorizing the filing of a
derivative suit is necessary, as it shows that the board of directors had decided that
filing such a suit is in the best interest of the corporation.

The Court also noted that the petitioners failed to show that they made a prior demand
on ARDC's board of directors to initiate the suit, or that they had been refused.
Additionally, the petitioners failed to present a board resolution authorizing the filing
of a derivative suit, which is required to show that the board of directors has given its
consent to the filing of such a suit.

Thus, the Court dismissed the petitioners' complaint for damages, ruling that they
lacked the legal standing to file a derivative suit on behalf of ARDC because they failed
to comply with the requirements set forth by law, particularly the need for a board
resolution authorizing the filing of a derivative suit. This case underscores the
importance of complying with the necessary legal requirements before filing a
derivative suit on behalf of a corporation, including obtaining a board resolution
authorizing the filing of such a suit.