G.R. No. 71589. December 17, 1990
CAGAYAN DE ORO COLISEUM, INC., PETITIONER, VS. OFFICE OF THE MINISTER OF LABOR AND EMPLOYMENT, REPRESENTED BY DEPUTY MINISTER VICENTE LEOGARDO, JR. AND ANGEL CHAVES, RESPONDENTS.
FERNAN, C.J.:
In this special civil action
for certiorari,
petitioner Cagayan de Oro
Coliseum, Inc. questions the jurisdiction of the Ministry of Labor and
Employment (MOLE) over FSD Case No. R-134-77
filed by private respondent Angel Chaves for unpaid salaries, per diems and allowances for the fiscal
year 1976-1977.
The undisputed
facts are as follows:
Cagayan de Oro
Coliseum, Inc. is a corporation duly organized and existing under Philippine
laws having been issued a certificate of registration by the Securities and
Exchange Commission (SEC) on September
15, 1961.[1]
Its principal line of business is the holding of cockfights and occasional
boxing matches.[2]
Angel Chaves, on the other hand, is an incorporator and major stockholder of
the corporation who, for sometime, served as its director and officer.[3]
Since its incorporation until 1977, the compensation of the
corporation’s directors, as provided by Section 5 of Article IV of its By-laws,
was from time to time fixed by its Board of Directors. On December
17, 1963, a copy of said By-laws was returned by the SEC to the
corporation with a request that a correction be made on said Section 5 by
changing the phrase “Board of Directors” to the word “stockholders.” The
change, however, was effected only in 1978.[4]
At the stockholders’ regular meeting on February 7, 1975, Chaves was elected member of the
Board of Directors. For fiscal year
1975-1976, he was elected vice-president and on March 13, 1976, with the unanimous approval of the members
of the Board, he assumed the presidency following the resignation of the then
incumbent president. Chaves held the
position of president until the end of his term in February, 1977.[5]
Shortly after Chaves assumed the presidency, or on April 8, 1976, the Board of Directors
passed a resolution fixing the monthly compensation of the president at P500.00
and his monthly allowance at P100.00.
The Board also provided a P100.00 per diem for the president’s
attendance in board meetings.[6]
Claiming that he had not been paid for services rendered, Chaves
filed on June 3, 1977 a letter complaint with the Field Services Division of
the then Department of Labor, Regional Office No. 10. Consequently, said office investigated the
corporation and found the following:
(1) unpaid wages for officers and office personnel; (2) nonpayment of
emergency cost of living allowance (ECOLA) under P.D. No. 525; (3) nonpayment
of 13th month pay under P.D. No. 851; and (4) nonpayment of special/regular
holiday pay. The investigation also
disclosed that although Atty. Angel Quimpo, general
manager of the corporation, had signified his intention to pay the
corporation’s obligation to its employees or officers in the amount of P79,773.72 for per diems, allowances, 13th month pay and others
as duly certified to by the corporation’s bookkeeper and treasurer, no
resolution was passed by its stockholders or the Board to implement said plan.[7]
On June 20, 1977,
another complaint was filed by Angel Chaves with the same division of the
Department of Labor against the corporation on the basis of the findings of
said investigation. Two years later or
on November 28, 1979, the
labor arbiter rendered a decision awarding Chaves P5,500.00
as salary from March 13, 1976
to February 14, 1977,
P462.50 as 13th month pay, P1,700 as monthly allowance from February 1976 to
June 1977, and P3,100 as per diem compensation from February 1976 to June 19, 1977.[8]
The corporation appealed to then Ministry of Labor and Employment
(now Department of Labor and Employment) but in its order dated December 24, 1982, the Ministry,
through Deputy Minister Vicente Leogardo, Jr.,
affirmed the decision of the labor arbiter.[9]
Its motion for reconsideration of said order having been denied, the
corporation filed the instant petition which we find to be impressed with
merit.
The crucial issue in this case is which of the two, the MOLE (now
DOLE) and the SEC has
jurisdiction over the present controversy.
An intracorporate controversy would
call for the jurisdiction of the SEC while
a labor dispute, that of the NLRC or the MOLE
as the case may be.[10]
But when a case is between a
stockholder and the corporation of which he holds stocks, the controversy is intracorporate and well within the jurisdiction of the SEC.[11]
These rulings are in consonance with the following provisions of Presidential
Decree No. 902-A which took effect, on March
11, 1976:
“Sec. 5. In addition to the regulatory and
adjudicative functions of the Securities and Exchange Commission over
corporations, partnerships and other forms of associations registered with it
as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to
hear and decide cases involving:
“(a) x x
x x x x x x x
“(b) Controversies arising
out of intracorporate or partnership relations,
between and among stockholders, members, or associates; between any or all of
them and the corporation, partnership or association of which they are
stockholders, members or associates, respectively; and between such
corporation, partnership or association and the State insofar as it concerns their
individual franchise or right to exist as such entity.”
Thus, in Abejo v. De la Cruz,[12]
the Court held that “an intracorporate
controversy is one which arises between a stockholder and the corporation. There is no distinction, qualification, nor
any exemption whatsoever. The provision
is broad and covers all kinds of controversies between stockholders and
corporations.” The SEC, being clothed with additional adjudicatory powers over intracorporate
and kindred disputes to promote dispatch arising from expertise enhanced by
specialization in the settlement of said controversies,[13]
is the proper agency to settle the controversy in this case.
Although the reliefs sought by Chaves
appear to fall under the
jurisdiction of the labor arbiter as they are claims for unpaid salaries and
other remunerations for services rendered, a close scrutiny thereof shows that
said claims are actually part of the perquisites of his position in, and
therefore interlinked with his relations with the corporation. In Dy vs. NLRC,[14]
the Court said: “(t)he question of remuneration involving as it does, a person
who is not a mere employee but a stockholder and officer, an integral part, it
might be said, of the corporation, is not a simple labor problem but a matter
that comes within the area of corporate affairs and management, and is in fact
a corporate controversy in contemplation of the Corporation Code.”
Finding that the MOLE has no jurisdiction to take cognizance of
the herein controversy, there is no need to resolve the other issues raised in this petition.
WHEREFORE, the questioned decision of the labor arbiter
and the order of the MOLE are set aside for having been rendered without
jurisdiction, but without prejudice to private respondent’s seeking recourse
with the appropriate forum.
SO ORDERED.
Gutierrez, Jr., and Bidin, JJ., concur.
Feliciano, J., on leave.
[1]
Rollo, p. 3.
[2]
Ibid., p. 112.
[3]
Ibid., p. 70.
[4]
Ibid., p. 23.
[5]
Ibid., pp. 23-24.
[6]
Ibid., p. 113.
[7]
Ibid., pp. 22-23.
[8]
Ibid., p. 22.
[9]
Ibid., p. 27.
[10]
Philippine School of Business Administration v. Lanao, G.R. No. 58468, February 24, 1984, 127 SCRA 781.
[11]
Boman Environmental Development Corporation v.
Court of Appeals, G.R. No. 77860, November 22, 1988, 167 SCRA 540.
[12]
G.R. No. 63558, May 19, 1987, 149 SCRA 654, 666 citing Philex
Mining Corporation v. Reyes, G.R. No. 57707, November 19, 1982, 118 SCRA
602.
[13]
Dionisio v. CFI of South Cotabato,
Br. II, G.R. No. 61048, April 17,
1983, 124 SCRA 222, 227.
[14]
G.R. No. 68544, October 27, 1986,
145 SCRA 211.