Sterling Selections Corporation v. Laguna Lake Development Authority (LLDA), petitioner, and

Joaquin G. Mendoza, in his capacity as General Manager of LLDA, respondent

Facts:

Petitioner Sterling Selections Corporation is assailing the decision of Pasig City RTC and

resolution of Court of Appeals.

Sterling Selections Corporation is a company engaged in the fabrication of sterling silver

jewelry with the products manufactured in the home of its principal stockholders, Asuncion Maria

and Juan Luis Faustmann, located in Barangay Mariana, New Manila, Quezon City. On January 16,

1998, Alicia Maceda, a neighbour of the petitioner, wrote a letter to the Brgy. Chairman to complain

about the loud noise and offensive toxic fumes coming from the petitioner’s manufacturing plant.

Maceda has likewise filed a formal complaint with the Department of Environment and Natural

Resources (DENR) – NCR office, with the latter endorsing the complaint to the Laguna Lake

Development Authority (LLDA) which had territorial and functional jurisdiction over the matter.

On November 19, 1998, a notice of violation and a cease and desist order (CDO) was served

on petitioner after it was found that it was operating without an LLDA Clearance and Permit, as

required by RA 4850. Petitioner contended that, as a cottage, its jewelry business is exempt from

the requirement to secure a permit from the LLDA. Under RA 6977, the law prevailing at the time of

its registration with the SEC in December 1996, cottage industry was defined as one with assets

worth Php 50,001.00 to Php 500,000.00, and, based on its Articles of Incorporation and CPA’s

Balance Sheet, it claims that its total assets, when it was incorporated, amounted only to Php

312,500.00.

Issue:

Whether or not Sterling Selections Corporation be classified as a “cottage” industry.

Decision:

The amount of Php 312,500.00 represents the total amount of the capital stock already

subscribed and paid up by the company’s stockholders. As such, the amount does not represent the

totality of its assets, even at the time of its registration. It is contrary to Section 3 of RA 6977, the

prevailing rule during its incorporation, which provides that the term total assets was understood to

mean “inclusive of those arising from loans but exclusive of the land on which the particular

business entity’s office, plant and equipment are situated.”

According to the Supreme Court, “assets consist of property of all kinds, real and personal,

tangible and intangible,” including “patents and causes of action,” which may apply.

The conclusion is that petitioner is not a cottage industry and, therefore, is not exempted

from the requirement of securing an LLDA clearance.

Skechers, USA, Inc., petitioner, v. Inter Pacific Industrial Trading Corp. and/or Inter Pacific Trading

Corp., et.al., respondents/Trendworks International Corporation, petitioner-intervenor v. Inter

Pacific Industrial Trading Corp. and/or Inter Pacific Trading Corp., et.al., respondents

Facts:

This is a twin motions for reconsideration filed by petitioner and petitioner-intervenor from

the decision rendered in favour of respondents. The controversy arose when Skechers USA, Inc.

filed with Branch 24 of the Manila RTC an application for the issuance of search warrants against an

outlet and warehouse operated by Inter Pacific Industrial Trading Corp. for infringement of

trademark under Section 155, in relation to Section 170 of RA 8293 (Intellectual Property Code of

the Philippines). In the course of its business, Skechers USA, Inc. has registered the trademark

“SKECHERS” and the trademark “S” (within an oval design) with the Intellectual Property Office

(IPO).

RTC agreed with the respondents that Skechers rubber shoes and Strong rubber shoes have

glaring differences such that an ordinary prudent purchaser would not likely be misled or confused

in purchasing. The Court of Appeals affirmed the ruling of the RTC, upon filing a petition for

certiorari by the petitioner; thus, elevated it to the Supreme Court.

Trendworks International Corporation filed a petition-in-intervention with the SC claiming to

be the sole licensed distributor of Skechers products in the Philippines. The court, in 2006,

rendered a decision dismissing the petition. Both petitioner and petitioner-intervenor filed their

separate motions for reconsideration with the Supreme Court.

Issue:

Whether or not, the respondent is guilty of trademark infringement.

Decision:

The motion for reconsideration is granted and the prior decision of SC dated in 2006 is set

aside.

The basic law on trademark, infringement and unfair competition is RA 8293. Specifically,

under Section 155 of RA 8293, any person who, without the consent of the owner of the registered

mark, use in commerce, among others, colorable imitation of a registered mark or the same

container or a dominant feature thereof,” with which such use is likely to cause confusion, or to

cause mistake or to deceive” shall be held liable in a civil action for infringement. According to the

Supreme Court, the essential element of infringement under RA 8293 is that the infringing mark is

likely to cause confusion.

In determining similarity and likelihood of confusion, jurisprudence has developed the

Dominancy Test, which focuses on the similarity of the prevalent or dominant features of the

competing trademarks and where duplication or imitation is not necessary, and the Totality Test,

which necessitates a consideration of the entirety of the marks as applied to the products including

the labels and packaging.

By applying the Dominancy Test, the court found that the use of the stylized “S” by

respondent in some of its rubber shoes infringes on the mark already registered by petitioner with

the IPO.

Fredco Manufacturing Corporation, petitioner, v. President and Fellows of Harvard College

(Harvard University), respondents

Facts:

This is a petition for review, assailing the decisions of the RTC and the Court of Appeals.

Fredco Manufacturing Corporation, a corporation handling the manufacture, promotion and

marketing of “Harvard” clothing articles as successor-in-interest of New York Garments

Manufacturing & Export Co., Inc., filed a Petition for Cancellation of Registration No. 56561 before

the Bureau of Legal Affairs of the IPO against the respondents for the trademark “Harvard Veritas

Shield Symbol.” The name and mark “Harvard” is valued between US $750 million to US $ 1 billion.

The petitioner alleged that, at the time of issuance of Registration No. 56561 to Harvard

University in 1993, New York Garments had already registered the mark “Harvard” for goods under

Class 25 of the Nice International Classification of Goods and Services in the year 1988. Moreover,

despite the cancellation of registration on July 1998 due to New York Garments’ failure to file an

affidavit of use/non-use on the fifth year of the registration, the right to the mark “Harvard”

remained with its predecessor New York Garments and now with Fredco.

Harvard alleged however that it is the lawful owner of the name and mark “Harvard” in

numerous countries worldwide, including the Philippines. The Director of the Bureau of Legal

Affairs of the IPO granted Fredco’s Petition for Cancellation of Registration. The matter, through an

appeal by Harvard University, was brought to the Director General of the IPO who reversed the

decision of the Legal Affairs’ director. The IPO Director General’s decision was affirmed when

brought to the Court of Appeals.

Fredco insists that the date of registration in the Philippines should prevail in determining

who has the better right to register the marks.

Issue:

Whether the Court of Appeals committed a reversible error in affirming the decision of the

Office of the Director General of the IPO.

Decision:

The petition has no merit; thus, it is denied.

Harvard University’s registration of the name “Harvard” is based on home registration which

is allowed under Section 37 of RA 166 (Trademark Law), although Section 2 of the same law requires

the use of trademark in commerce of services for not less than 2 months in the Philippines before

application for registration is filed. This is based on the ground that “where the trademark sought

to be registered has already been registered in a foreign country that is a member of the Paris

Convention, the requirement of proof of use in the commerce in the Philippines is not necessary.”

Moreover, Harvard University has been using the mark “Harvard” in commerce since 1872 and the

“Harvard Veritas Shield Symbol” for Class 25 goods in the United States since 1953.

The Court adds that Section 123.1(e) of RA 8293 categorically states that “a mark which is

considered by the competent authority of the Philippines, whether or not it is registered here”

cannot be registered by another in the Philippines.

Moreover, Fredco’s registration was already cancelled on July 30, 1998 when it failed to file

the required affidavit of use/non-use for the fifth year of the mark’s registration.

Majority Stockholders of Ruby Industrial Corporation, petitioners, v. Miguel Lim, in his personal

capacity as Stockholder of Ruby Industrial Corporation, et.al, respondents, and China Banking

Corporation, petitioner v. Miguel Lim, in his personal capacity as a stockholder of Ruby Industrial

Corporation and representing the Minority Stockholders of Ruby Industrial Corporation

Facts:

This case is an appeal for the fourth time involving the rehabilitation proceedings initiated by

Ruby Industrial Corporation in 1983.

Ruby Industrial Corporation is a domestic corporation engaged in glass manufacturing. Due

to severe liquidity problems beginning in 1980, it filed a petition for suspension of payments with

the SEC, which issued an order declaring Ruby Industrial Corporation under suspension of payments

and enjoining the disposition of its properties pending.

Two rehabilitation plans were submitted to the SEC: (1) the Benhar/Ruby Rehabilitation Plan

of the majority stockholders led by Yu Kim Giang and (2) the Alternative Plan of the minority

stockholders represented by Miguel Lim. The Benhar/Ruby Plan was opposed by most of the

stockholders, including Lim, because it would transfer Ruby’s assets beyond the reach and to the

prejudice of its unsecured creditors.

Several plans have been formulated to begin liquidation. However, most of them were

questioned by either of the majority or minority stockholders.

Issue:

Whether or not the SEC has jurisdiction to hear the petition for dissolution and liquidation.

Decision:

Since the corporate life of Ruby Industrial Corporation, as stated in its articles of

incorporation, had expired, without a valid extension having been effected, it was deemed dissolved

by such expiration without need of further action on the part of the corporation or the State.

Sections 4 – 9 of the Rules of Procedure on Corporate Recovery mandates the SEC to order the

dissolution and liquidation proceedings under Rule VI. Section 6 of the same rule likewise

authorizes the SEC on motion or upon recommendation of the management committee to order the

dissolution of the debtor corporation and the liquidation of its remaining assets.

Petronilo J. Barayuga, petitioner v. Adventist University of the Philippines, through its Board of

Trustees, represented by its chairman, Nestor D. Dayson, respondents

Facts:

This is a petition to review the decision promulgated by Court of Appeals which nullified

and set aside the writ of preliminary injunction issued by Imus, Cavite RTC to prevent Adventist

University of the Philippines from removing the petitioner.

In a conference held from November 27 to December 1, 2000, the North Philippine Union

Mission elected the members of the Board of Trustees of AUP, including the chairman and the

secretary. Dayson was elected chairman while Barayuga was chosen secretary. In January 2001,

the Board of Trustees appointed Barayuga as president of AUP.

An audit was conducted in November 2002 where it was revealed that the petitioner had

committed serious violations of fundamental rules and procedure in the disbursement and use of

funds.

In January 2003, a special meeting was held wherein the members of the Board of

Trustees, by secret ballot, voted to remove him as President based on the findings of the audit, to

appoint an interim committee consisting of 3 members to assume the powers and functions of

president, and to recommend him to the NPUM for consideration as Associate Director of

Secondary Education.

Barayuga asked for reconsideration; however, it was denied by the Board because his

reasons were not meritorious. He brought a suit for injunction and damages in the RTC praying for

the issuance of a temporary restraining order against AUP and its Board of Trustees, which was

granted by the RTC. The respondents filed a petition for certiorari in the CA, which rendered its

decision nullifying the RTC’s writ of preliminary injunction.

Issues:

Whether or not his term as President was five years, as he insists, or only two years, as the

university insists.

Decision:

Section 108 of the Corporation Code determines the membership and number of trustees in

an educational corporation, from 5 to 15 as long as the number of trustees be in multiples of 5,

unless provided for by the articles of incorporation or by-laws of the institution. Unless otherwise

provided in the articles of Incorporation, the term of office of 1/5 of the Board of Trustees shall

expire every year.

Under the amended By-Laws of AUP, the term of office of the members of the Board of

Trustees was only of two years; and the officers, who included the President, were to be elected

from among the members of the Board during their organizational meeting, which was held during

the election of the Board of Trustees every two years, which means the officers, including the

President, were to exercise the powers vested by the amended By-Laws of AUP for a term of only 2

years, not five.

The petitioner, having assumed as President of AUP on January 2001, could serve for only 2

years or until January 2003. By the time of his removal for cause as President, he was already

occupying the office in a hold-over capacity, and could be removed at any time, without cause, upon

the election or appointment of his successor. This, his removal as President of AUP, being made in

accordance with the AUP Amended By-Laws, was valid.

New World International Development (Phils.), Inc., petitioner, v. NYK Fil-Japan Shipping Corp.,

LEP Profit International, Inc, (ORD), DMT Corporation, Advatech Industries, Inc., Marina Port

Services, Inc., and Serbros Carrier Corporation, respondents/New World International

Development (Phils.), Inc., petitioner v. Seaboard Eastern Insurance Co., Inc, respondent

Facts:

This case involves a cargo owner’s right to recover damages from the loss of insured goods

under the Carriage of Goods by Sea Act and the Insurance Code.

Petitioner New World International Development (Phils.), Inc. bought from DMT Corporation

throught its agent, Advatech Industries, Inc. three emergency generator sets worth US $721.5

million. DMT shipped the generator sets by truck from Wisconsin, USA to LEP Profit International in

Chicago, Illinois. From there, the shipment went by train to Oakland, California where it was loaded

on S/S California Luna V59, owned and operated by NYK Fil-Japan Shipping Corporation for delivery

to New World in Manila. NYK issued a bill of lading, declaring that it received the goods in good

condition.

NYK unloaded the shipment in Hong Kong and transhipped it to S/S ACX Ruby V/72 that it

owned and operated. On its journey to Manila, it encountered typhoon Kadiang and upon arrival at

the Manila South Harbor, its captain filed a sea protest respecting the loss and damage that the

goods on board his vessel suffered.

An examination of the 3 generator sets revealed that all 3 sets suffered extensive damage

and could no longer be repaired. For these reasons, New World demanded from NYK, DMT,

Advatech, LEP Profit, LEP International Philippines, Marina and Serbros recompense for its loss.

Later in 1994, it filed an action for specific performance and damages against all the respondents

before the Makati City RTC.

Going back to November 1993, , New World sent a formal claim to Seaboard-Eastern

Insurance Company since it covered the goods with a marine insurance policy to which it required,

in its reply on February 1994, the former to submit to it an itemized list of the damaged units, parts

and accessories, with corresponding values, for the processing of the claim. But, New World did not

submit what was required, insisting that the insurance policy did not include the submission; thus,

Seaboard, refused to process the claim.

Issue:

Whether or not the submission of an itemized list is necessary before the insurance claim be

processed

Decision:

Action for specific performance and damages against all the respondents were dismissed

except for NYK. Meanwhile, it directs Seaboard to pay New World US $721.5 million with 24%

interest for duration of delay in accordance with Sections 243 and 244 of the Insurance Code and

attorney’s fees equivalent to 10% of insurance proceeds. Seaboard shall also pay a 12% interest per

annum on the total amount due to petitioner until full satisfaction.

Section 241 of the Insurance Code provides that no insurance company doing business in the

Philippines shall refuse without just cause to pay or settle claims arising under coverages provided

by its policies. Moreover, under Section 243, the insurer has 30 days, after proof of loss is received

and ascertainment of the loss or damage, within which to pay the claim. Moreover, if such

ascertainment is not had within 60 days from receipt of evidence of loss, the insurer has 90 days to

pay or settle the claim. If insurer refuses or fails to pay within the prescribed time, the insured shall

be entitled to interest on the proceeds of the policy for the duration of delay at the rate of twice the

ceiling prescribed by the Monetary Board (the legal interest rate of 12% per annum).

Notably, Seaboard incurred delay when it failed to settle New World’s claim as required by

Section 243. The Insurance Code also provides for an award of attorney’s fees and other expenses

incurred by the assured due to the unreasonable withholding of payment of his claim.

Union Bank of the Philippines, petitioner, v. Spouses Rodolfo T. Tiu and Victoria N. Tiu,

respondents

Facts:

This is a petition for review on certiorari, seeking to reverse the joint decision of the CA in

2006.

On November 1995, Union Bank of the Philippines and the spouses Rodolfo T. Tiu and

Victoria N. Tiu entered into a Credit Line Agreement (CLA). From September 1997 to March 1998,

the spouses took out various loans pursuant to the CLA in the total amount of US $3.632 million as

evidenced by promissory notes.

Union Bank, in view of the existing currency risks in 1998, wrote a letter to the spouses

advising them that the loans shall be redenominated to their equivalent Philippine peso amount to

which the spouses authorized at the rate of US $1=Php 41.40 with interest of 19% for one year. The

parties entered into a restructuring agreement wherein the parties declared that the loan obligation

to be restructured (after deducting the dacion price of properties ceded by the spouses and adding

the taxes, registration fees and other expenses) is Php 104,668,741, which the spouses undertook to

pay via 3 loan facilities/payment schemes. Moreover, as provided in the said agreement, the

spouses executed a real estate mortgage in favor of the bank over their property with an area of

3,096 square meters.

Union Bank, however, asserted that the spouses failed to comply with the payment

schemes; thus, it initiated extrajudicial foreclosure proceedings on the residential property of

spouses. The property was to be sold at public auction; thus, the spouses instituted action.

Issue:

Whether or not the restructuring agreement is valid for having redenominated the dollar

loans to Philippine currency.

Decision:

The court ruled that the Restructuring Agreement is valid.

Pursuant to Section 1 of RA 529, any agreement to pay an obligation in a currency other than

the Philippine currency is void; the most that could be demanded is to pay said obligation in

Philippine currency to be measured in the prevailing rate of exchange at the time the obligation was

incurred. RA 4100 took effect in 1964 which modified RA 529 by providing for several exceptions to

the nullity of agreements to pay foreign currency.

Central Bank Circular No. 1389 was issued in 1993 which lifted foreign exchange restrictions

and liberalized trade in foreign currency. In cases of foreign borrowings and foreign currency loans,

however, approval of BSP was required. In 1996, RA 8183 took effect, expressly repealing RA 529

and provides that parties may agree that the obligation or transaction be settled in a currency other

than the Philippine currency at the time of payment.

The Court considered the time when the Restructuring Agreement was signed, which was

during the height of the financial crisis and when the Philippine peso was rapidly depreciating. The

courts considered the risk of inability to pay by the spouse if the parties did not enter into the said

agreement.

Philippine Commercial International Bank, petitioner, v. Antonio B. Balmaceda and Rolando N.

Ramos, respondents

Facts:

This is a petition for review on certiorari, to reverse and set aside the decision of CA, which

overturned the RTC decision holding Ramos liable for the amount of Php 895 million.

In 1993, Philippine Commercial International Bank filed an action for recovery of sum of

money with damages before the RTC against Antonio Balmaceda, the branch manager of its Sta.

Cruz, Manila branch. Balmaceda was alleged to have took advantage of his position as branch

manager, fraudulently obtained and encashed 31 Manager’s checks in the total amount of Php

10,782,150.00. PCIB, in 1994, PCIB moved to implead Ramos as one of the recipients of a portion of

the proceeds from Balmaceda’s alleged fraud.

Issue:

Whether or not Ramos be held liable for acting complicity with Balmaceda in the

perpetuation of the fraud.

Decision:

The decision of CA is affirmed with the modifications.

The Court cannot disregard the significant role of PCIB for the perpetration of the fraud

because other PCIB employees failed to carry out their assigned task. The General Banking Law of

2000 requires of banks the highest standards of integrity and performance for the banking business

is impressed with public interest and the trust and confidence of the public in the banking industry.

Moreover, despite Balmaceda’s gross violations of bank procedures, his co-employees not only

turned a blind eye to his actions, but actually complied with his instructions. In this way, PCIB’s own

employees were unwitting accomplices in the fraud.

Urban Bank, petitioner, v. Magdalena Peña, respondent/Delfin C. Gonzales, Jr., Benjamin L. De

Leon, and Eric L. Lee, petitioners, v. Magdaleno M. Peña, respondent/Magdaleno M. Peña,

petitioner, v. Urban Bank, Inc., Teodoro Borlongan, Delfin C. Gonzales, Jr., Benjamin L. De Lenon,

P. Siervo H. Dizon, Eric C. Lee, Ben T. Lim, Jr., Corazon Bejasa, and Arturo Manuel, Jr., respondents

Facts:

Urban Bank, Inc. was a domestic Philippine corporation, engaged in the business of banking.

The eight individual respondents were officers and members of the Bank’s board of directors, who

were sued in their official and personal capacities. Meanwhile, petitioner Atty. Magdaleno M. Peña

is a lawyer by profession and was formerly a stockholder, director and corporate secretary of Isabel

Sugar Company, Inc (ISCI).

ISCI owned a parcel of land located in Pasay and it leased its property for a period of 10

years in 1984. The lessee subleased the land to several tenants who put up 23 establishments,

mostly beer houses and night clubs, inside the compound. Before the expiration of the 10 year

period, ISCI informed the lessee and his tenants that the lease would no longer be renewed and that

it intended to take over the Pasay property for the purpose of selling it to Urban Bank, Inc.

Two weeks before the lease over the Pasay property was to expire, ISCI and Urban Bank

executed a Contract to Sell, whereby the latter would pay ISCI the amount of Php 241.612 million in

instalments for the Pasay property. Both parties agreed that the final instalment of Php 25 million

would be released by the bank upon ISCI’s delivery of full and actual possession of the land, free

from any tenants.

ISCI sent Urban Bank a letter, which acknowledged ISCI’s engagement of Peña and

commitment to pay for any expenses that may be incurred in the course of his services. Peña made

efforts to settle the issue of possession of the Pasay property with the sub-tenants.

On March 1995, the bank subsequently took actual possession of the property and installed

its own guards at the premises.

Peña formally demanded from Urban Bank the payment of the 10% compensation and

attorney’s fees allegedly promised to him during his telephone conversation with Borlongan for

securing and maintaining peaceful possession of the property. When Urban Bank refused to pay for

his services, Peña filed a complaint for recovery of agent’s compensation and expenses, damages

and attorney’s fees in RTC Bago City.

Urban Bank declared a bank holiday on April 2000 and was placed under receivership of the

PDIC while its motion for reconsideration was pending. The appellate court found that the bank

holiday declared by the BSP after the promulgation of its earlier decision, PDIC’s receivership of

Urban Bank and the imminent insolvency thereof constituted changes in the bank’s conditions that

would justify execution pending appeal.

The rehabilitation plan of Urban Bank was approved by the Monetary Board of the BSP.

Thus, the Monetary Board subsequently lifted PDIC’s statutory receivership of the bank.

Issue:

Whether or not, the board of directors of Urban Bank be held personally liable for the bank’s

insolvency.

Decision:

A corporation, as a juridical entity, may act only through its directors, officers and

employees. Article 31 of the Corporation Code provides that “[t]o hold a director, a trustee, or an

officer personally liable for the debts of the corporation, bad faith or gross negligence by the

director, trustee or officer should be clearly and convincingly established.”

Marc II Marketing, Inc. and Lucila Joson, petitioners, v. Alfredo M. Joson, respondent

Facts:

Marc II Marketing, Inc. and Lucila Joson is assailing the decision of the CA for reversing and

settling aside the Resolution of the National Labor Relations Commission.

Marc II Marketing, Inc. is a corporation duly organized and existing under and by virtue of

the laws of the Philippines. It is primarily engaged in buying, marketing, selling and distributing in

retail or wholesale for export or import household appliances and products and other items.

Petitioner Lucila V. Joson is the President and majority stockholder of the corporation.

Before Marc II Marketing, Inc. was officially incorporated, Alfredo M. Joson has already been

engaged by Lucila, in her capacity as President, to work as General Manager of the corporaton and it

was formalized through the execution of a Management Contract dated in 1994 under Marc

Marketing, Inc., as Marc II Marketing, Inc. was yet to be incorporated. For occupying the said

position, respondent was among the corporation’s corporate officers by the express provision of

Section 1, Article IV of its by-laws.

Alfredo was appointed as one of its officers with the designation or title of General Manager

to function as a managing director with other duties and responsibilities that the Board may provide

and authorized.

However, in 1997, Marc II Marketing Inc. decided to stop and cease its operation as

evidenced by an Affidavit of Non-Operation due to poor sales collection aggravated by the

inefficient management of its affairs. Alfredo was informed of the cessation of its business

operations and the termination of his services as General Manager. He filed action for

reinstatement and money claim against petitioners.

Issue:

Whether or not Marc II Marketing Inc.’s Board of Directors could create a position for

corporate officers through an enabling clause found in its corporate by-laws?

Decision:

The Court held that in the context of PD 902-A, corporate officers are those officers of a

corporation who are given that character either by the Corporation Code or by the corporation’s by-

laws.

Section 25 of the Corporation Code specifically enumerated who are these corporate

officers, namely: president, secretary, treasurer and such other officers as may be provided for in

the by-laws.

A careful examination of Marc II Marketing Inc.’s by-laws, particularly paragraph 1, Section 1

of Article IV explicitly revealed that its corporate officers are composed only of chairman, president,

one/more vice president, treasurer and secretary. The position of general manager was not among

those enumerated. Meanwhile, paragraph 2, Section 1 of Article IV of the corporation’s by-laws

empowered its Board of Directors to appoint such officers as it may determine necessary or proper,

making this an enabling provision for approving a resolution to make the position of general

manager a corporate officer. All of these acts were done without first amending its by-laws so as to

include the General Manager in its roster of corporate officers.

Though the Board of Directors may create appointive positions other than the positions of

corporate officers, the persons occupying such positions cannot be viewed as corporate officers

under Section 25 of the Corporation Code. The said provision of the Corporation Code safeguards

the constitutionally enshrined right of every employee to security of tenure and prevents the

creation of a corporate officer position by a simple inclusion in the corporate by-laws of an enabling

clause empowering the Board of Directors.