Solidary liabilities may at times be incurred by the directors and officers of the corporation but only when exceptional circumstances warrant

Lastly, we deem it imperative to resolve the question of whether Grandteq’s officers, who are co-petitioners herein, are solidarily liable with the company.

There is solidary liability when the obligation expressly so states, when the law so provides, or when the nature of the obligation so requires.[44]  In  MAM Realty Development Corporation v. NLRC,[45] the solidary liability of corporate officers in labor disputes was discussed in this wise:

A corporation, being a juridical entity, may act only through its directors, officers and employees.  Obligations incurred by them, acting as such corporate agents, are not theirs but the direct accountabilities of the corporation they represent.  True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases:

1.   When directors and trustees or, in appropriate cases, the officers of a corporation−

(a) vote for or assent to patently unlawful acts of the   corporation;

(b)   act in bad faith or with gross negligence in directing the corporate affairs;

x x x x

In labor cases, for instance, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith.

From the decisions of the LA, the NLRC, and the CA, there is no indication that Estrella’s dismissal was effected with malice or bad faith on the part of Grandteq’s officers. Their liability for Estrella’s illegal dismissal, the consequential monetary award arising from such dismissal and the other money claims awarded in the LA’s decision, as correctly affirmed by the CA, could thus only be joint, not solidary. This pronouncement does not

extend to Estrella’s claims for commissions, allowances, and incentives, as the same are still subject to the LA’s scrutiny.


About Erineus

Born on December 28, 1965, Surallah, South Cotabato, Southern Mindanao, Philippines.
This entry was posted in Corporation Law, Labor Law, Obligations and Contracts and tagged . Bookmark the permalink.

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