CASE DIGEST: NAGUIAT vs. NLRC. G.R. No. 116123. March 13, 1997

FACTS:

Petitioner CFTI held a concessionaire's contract with the Army Air Force Exchange Services ("AAFES") for the operation of taxi services within Clark Air Base. Sergio Naguiat was CFTI's president, while Antolin Naguiat was its vice-president. 

Like Naguiat Enterprises, a trading firm, it was a family-owned corporation. Individual respondents were previously employed by CFTI as taxicab drivers.

Due to the phase-out of the US military bases in the Philippines, from which Clark Air Base was not spared, the AAFES was dissolved, and the services of individual respondents were officially terminated. Respondents and CFTI held negotiations as regards separation benefits that should be awarded in favor of the drivers. However, individual respondents herein refused to accept theirs. Instead, they filed a complaint against "Sergio F. Naguiat, and CFTI with Antolin T. Naguiat as vice president and general manager doing business under the name and style of Naguiat Enterprises for payment of separation pay due to termination/phase-out. 

ISSUE:

Whether the President of the Corporation may be held liable solidarily with the payment of corporation’s obligations.

RULING:

YES. Sergio F. Naguiat, admittedly, was the president of CFTI who actively managed the business. Thus, applying the ruling in A. C. Ransom, he falls within the meaning of an "employer" as contemplated by the Labor Code, who may be held jointly and severally liable for the obligations of the corporation to its dismissed employees.

Moreover, petitioners also conceded that both CFTI and Naguiat Enterprises were "close family corporations" owned by the Naguiat family. 

Section 100, paragraph 5, (under Title XII on Close Corporations) of the Corporation Code, states:

"(5) To the extent that the stockholders are actively engage(d) in the management or operation of the business and affairs of a close corporation, the stockholders shall be held to strict fiduciary duties to each other and among themselves. Said stockholders shall be personally liable for corporate torts unless the corporation has obtained reasonably adequate liability insurance."