G.R. No. L-68544 October 27, 1986 LORENZO C. DY, ZOSIMO DY, SR., ILLI!M I"ERO, RIC!RDO G!RCI! !ND R#R!L "!N$ O% !Y#NGON, INC., petitioners, vs. N!

&ION!L L!"OR REL!&IONS COMMISSION !ND E'EC#&I(E L!"OR !R"I&ER !L"ER&O L. D!LM!CION, !ND C!RLI&O ). (!ILOCES, respondents. Marcelino C. Maximo and Ramon Barrameda for petitioners. Carlito H. Vailoces for private respondent.

N!R(!S!, J.: Petitioners assail in this Court the resolution of the National Labor Relations Commission (NLRC) dismissing their appeal from the decision of the Executive Labor rbiter 1 in Cebu Cit! "hich found private respondent to have been illegall! dismissed b! them. #aid private respondent, Carlito $. %ailoces, "as the manager of the Rural &an' of !ungon (Negros (riental), a ban'ing institution dul! organi)ed under Philippine la"s. $e "as also a director and stoc'holder of the ban'. (n *une +, ,-./, a special stoc'holders0 meeting "as called for the purpose of electing the members of the ban'0s &oard of 1irectors. 2mmediatel! after the election the ne" &oard proceeded to elect the ban'0s executive officers. Pursuant to rticle 2% of the ban'0s b!3la"s,

providing for the election b! the entire membership of the &oard of the executive officers of the ban', i.e., the president, vice3president, secretar!, cashier and ban' manager, in that board meeting of *une +, ,-./, petitioners Loren)o 1!, 4illiam 2bero and Ricardo 5arcia "ere elected president, vice3president and corporate secretar!, respectivel!. %ailoces "as not re3elected as ban' manager, &ecause of this development, the &oard, on *ul! 6, ,-./, passed Resolution No. 7, series of ,-./, relieving him as ban' manager.


(n ugust /, ,-./, %ailoces filed a complaint for illegal dismissal and damages "ith the 8inistr! of Labor and Emplo!ment against Loren)o 1! and 9osimo 1!, #r. :he complaint "as amended on #eptember 66, ,-./ to include additional respondents34illiam 2bero, Ricardo 5arcia and the Rural &an' of !ungon, and additional causes of action for underpa!ment of salar! and non3pa!ment of living allo"ance. 2n his complaint and position paper, %ailoces asserted that Loren)o 1!, after obtaining control of the ma;orit! stoc' of the ban' b! bu!ing the shares of 8arcelino 8aximo, called an illegal stoc'holders0 meeting and elected a &oard of

"ith additional bac'"ages from 1ecember .C@ representing his salar! differentials. :he! pointed out that %ailoces0 position "as an elective one. but of the resentment of petitioners against %ailoces "hich arose from the latter0s filing of the cases for recognition as natural child against 9osimo 1!. and conseAuentl! ordered the individual petitioners B Loren)o 1! and 9osimo 1!3but not the &an' itself. and attorne!0s fees< and (b) Reinstate %ailoces to his position as ban' manager. 4 2n their ans"er. not to mention the fact that he (1!) harbored ill feelings against %ailoces on account of the latter0s filing of a complaint for violation of the corporation code against him and another complaint for compulsor! recognition of natural child "ith damages against 9osimo 1!. "ithout giving him the opportunit! to be heard first< that his dismissal "as motivated b! Loren)o 1!0s desire to ta'e over the management and control of the ban'./ on the ad.-.. and he "as not re3elected as ban' manager because of the &oard0s loss of confidence in him brought about b! his absenteeism and negligence in the performance of his duties< and that the &oard0s action "as ta'en to protect the interest of the ban' and "as =designed as an internal control measure to secure the chec' and balance of authorit! "ithin the organi)ation. denied the charge of illegal dismissal.. #r.+. because he "as not afforded the due process of la" "hen he "as dismissed during the &oard meeting of *ul! 6. #r. . bac' "ages from date of dismissal up to the date of the decision (November 6-. cost of living allo"ances. et al. said &oard convened on *ul! 6. to> (a) Pa! %ailoces ./ the validit! of "hich is seriousl! doubted< (b) Not paid his cost of living allo"ance< and (c) ?nderpaid "ith onl! P7@@ monthl! salar!. Loren)o 1!. first not because of absenteeism and negligence. the sum of P.= 5 :he Executive Labor rbiter found that %ailoces "as> (a) 2llegall! dismissed. and for violation of the corporation code against Loren)o 1!< and second.-.-. .ointl! and severall!. .1irectors controlled b! him< that after its illegal constitution.usted salar! .. moral and exemplar! damages.@..-./)./ and passed a resolution dismissing him as manager. .

rate of PC6@.. and. appealed to the NLRC. a ne" la"!er engaged b! the respondents for the appeal... Ramon Elesteria. tt!. . plus cost3of3 living allo"ance. "as received on *anuar! ..udicator! po"ers of the #ecurities and Exchange Commission.E.-. Considering that it "as a la" partner of the respondents0 counsel "ho received on *anuar! . et al. petitioners assail said ruling as an arbitrar! deprivation of their right to appeal through unreasonable adherence to procedural technicalit!.+ a certain tt!..+. "e can not give due course to his appeal.. . the same is admitted b! no less than tt!. ho"ever b!passed the issues raised and simpl! dismissed the appeal for having been filed late. a la" office partner of tt!. Elesteria or tt!. .-.7.-. :his fact is corroborated b! the certification issued b! the Postmaster of 1umaguete Cit!. . through their ne"l! engaged counsel. his actual receipt thereof completes the service. Edmund :ubio.. received a cop! of the decision in this case as certified b! *ulia Pepito in an affidavit subscribed before the #enior Labor rbitration #pecialist. Drancisco 9erna. instead of "hich he simpl! abandoned the "or' he "as supposed to perform up to the effective date of his relief< and that the matter of his relief "as "ithin the ad. 9erna.+ the registered letter.@@ r month until he is actuall! reinstated. 6 Loren)o 1!. it is therefore our opinion that the appeal herein "as filed out of time. "hether the time is rec'oned from the receipt b! tt!. 8oreover.. assigning error to the decision of the Labor rbiter on various grounds. since the respondents received another cop! of the decision on *anuar! /@. :ubio./ "hich decreed his relief because he "as no longer a member of the &oard on said date< that he nonetheless had the opportunit! to refute the charges against him and see' a formal investigation because he received a cop! of the minutes of said meeting "hile he "as still the ban' manager (his removal "as to ta'e effect onl! on ugust . for this reason.-.-. . 8 2n this Court. among them> that %ailoces "as not entitled to notice of the &oard meeting of *ul! 6. 2t further appears in the record that on *anuar! /@. . :he! argue that the! should not be bound b! the service of the Labor rbiter0s decision ./).. .-. nd even assuming that such "as not a valid service. :he appeal "as filed onl! on Debruar! ..-. Ramon Elesteria himself in his affidavit. . . 7 :he NLRC.+.+ b! a certain tt!. 2t ruled that> :he record sho"s that a cop! of the decision sent b! registered mail to respondents0 counsel.

urisdiction> 2t "as at a &oard regular monthl! meeting held on ugust . has . instead of the Rural &an' of !ungon. No.-. trustees. -@63 . officers or managers of such corporations.. of Presidential 1ecree No.-. .urisdiction of the #ecurities and Exchange Commission.. 1+ $e lost that position because the &oard that "as elected in the special stoc'holders0 meeting of *une +.-E-. because neither la"!er "as authori)ed to accept service for their counsel tt!. :ubio. 2n PSBA vs. confronted "ith a similar controvers!.@ da! period of appeal should be counted from Debruar! ./ did not re3elect him. Elesteria on *anuar! .. 11 :he case thus falls sAuarel! "ithin the purvie" of #ection 7.-. .+ or b! tt!. par. nd "hen %ailoces. . 12this Court. ..+.. that three directors "ere elected to fill vacancies. in effect caused termination of his services. (c). impugned said stoc'holders0 meeting as illegall! convo'ed and the &oard of 1irectors thereb! elected as illegall! constituted.b! tt!. and that the damages a"arded are exorbitant and oppressive./ "hich. Leaño. . and that their . . the! assert that the rbiter0s finding of illegal dismissal "as "ithout evidentiar! basis. 4hile the comment of %ailoces traverses the averments of the petition.@. "hich "as %ailoces0 real emplo!er. namel!> (c) Controversies in the election or appointments of directors. in his position paper submitted to the Labor rbiter.-. not the NLRC. he made it clear that at the heart of the matter "as the validit! of the directors0 meeting of *une +.-. b! not re3electing him to the position of manager. that of the #olicitor 5eneral on behalf of public respondents perceives the matter as an intracorporate controvers! of the class described in #ection 7. that all corporate positions "ere declared vacant in order to effect a reorgani)ation.ust cited. (c). :here is no dispute that the position from "hich private respondent %ailoces claims to have been illegall! dismissed is an elective corporate office. it "as at the regular &oard meeting of #eptember 7. par. partnerships or associations. explicitl! declared to be "ithin the original and exclusive . nd. that it "as error to impose the obligation to pa! damages upon the individual petitioners. . $e himself acAuired that position through election b! the ban'0s &oard of 1irectors at the organi)ational meeting of November .E. 9erna. 9erna on *anuar! /@.-. the issue of . (n the merits.+ "hen the! actuall! received the cop! of the decision from tt!. and recommends that the Auestioned resolution of the NLRC as "ell as the decision of the Labor rbiter be set aside as null and void.-. ..urisdiction is decisive and renders unnecessar! consideration of the other Auestions raised. 9 2n truth. ruled that the #ecurities and Exchange Commission. . -@63 .

the &oard meeting on #eptember 7... that on 1ecember . its officers or partners. .. #o much so.unctive relief from the #EC. 2t revolves around the election of directors. . of the board of directors. .. Private respondent also contends that his =ouster= "as a scheme to intimidate him into selling his shares and to deprive him of his . %is3a3vis the NLRC. officers or managers of the P#& .urisdiction to hear and decide cases involving> a) 1evices or schemes emplo!ed b! or an! acts. . and bet"een them and the corporation. :an invo'ed the same allegations in his complaint filed "ith the #EC. therefore. :he correctness of d conclusion is not for us to pass upon in this case.ust and fair return on his investment as a stoc'holder received through his salar! and allo"ances as Executive %ice3President.and at the ensuing election of officers. &asicall!. these matters fall "ithin the .-. :hus. :his is the crux of the Auestion that :an has raised before the #EC.. "ere validl! held.-. -@63 vests in the #ecurities and Exchange Commission> . the #EC (Case No..-. the controvers! is intra3corporate in nature. (riginal and exclusive . . the Auestion is "hether the election of directors on ugust . :an "as not re3elected as Executive %ice3President.-. :an "as present at said meeting and again sought the issuance of in. amounting to fraud and misrepresentation) "hich ma! be detrimental to the . Even in his position paper before the NLRC..orit! vote of the stoc'holders at a meeting speciall! called for the purpose. "hich resulted in :an0s failure to be re3elected.urisdiction of the #EC.. of the three directors "as in contravention of the P#& &!3La"s providing that an! vacanc! in the &oard shall be filled b! a ma. :he foregoing indubitabl! sho" that. 6... business associates.+7) rendered a Partial 1ecision annulling the election of the three directors and ordered the convening of a stoc'holders0 meeting for the purpose of electing ne" members of the &oard. and the election of officers on #eptember 7. fundamentall!. :an alleged that the election on ugust . he concludes. Presidential 1ecree No. the relation bet"een and among its stoc'holders.E. "as tainted "ith irregularit! on account of the presence of illegall! elected directors "ithout "hom the results could have been different.-..

Respondent %ailoces0 invocation of estoppel as against petitioners "ith respect to the issue of .urisdiction is unavailing.urisdiction is null and void. partners.urisdiction of a court ma! be raised at an! stage of the proceedings. 8ore importantl!.ect matter of the action is a matter of la" and ma! not be conferred b! consent or agreement of the parties. trustees. in their appeal to the NLRC the! called attention to the Labor rbiter0s lac' of . and of :an0s not having been elected thereafter. partnership or association of "hich the! are stoc'holders. members or associates< bet"een an! of all of them and the corporation. in Calimlim vs. 2n the first place. is not determined b! the nature of the services performed. b) Controversies arising out of intracorporate or partnership relations. partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entit!< c) Controversies in the election or appointments of directors. the relationship of a person to corporation.urisdiction. lthough rather off handedl!. 5enerall! spea'ing. . "hich has been apparent on the face of the pleadings since the start of litigation before the Labor rbiter. but the dismissal of the appeal for alleged tardiness effectivel! precluded consideration of that or an! other Auestion raised in the appeal. respectivel!< and bet"een such corporation. "hether as officer or as agent or emplo!ee. . partnership or associations. members of associations or organi)ations registered "ith the Commission. :he lac' of . :his is not a case of dismissal.-. :hus. :he situation is that of a corporate office having been declared vacant. bet"een and among stoc'holders. but b! the incidents of the relationship as the! actuall! exist. :he matter of "hom to elect is a prerogative that belongs to the &oard.interest of the public andFor of the stoc'holders./. estoppel cannot be invo'ed to prevent this Court from ta'ing up the Auestion of . it is not Auite correct to state that petitioners did not raise the point in the lo"er tribunal.urisdiction to rule on the validit! of the meeting of *ul! 6. 2t is "ell settled that the decision of a tribunal not vested "ith appropriate .urisdiction of a court over the sub. 1* this Court held> rule that had been settled b! unAuestioned acceptance and upheld in decisions so numerous to cite is that the . Ramirez. officers or managers of such corporations. members or associates. and involves the exercise of deliberate choice and the facult! of discriminative selection.

++. 2t is to be regretted. Rule -. virtuall! overthro"ing altogether the time3honored principle that the issue of .urisdiction over the same irrespective of the attendant circumstances. instead a blan'et doctrine had been repeatedl! upheld that rendered the supposed ruling in Si on!"ano# not as the exception. Civil Code)../6. 2f an! fault is to be imputed to a part! ta'ing such course of action. Rules of Court) #hould the Court render a . but rather the general rule. such act ma! not at once be deemed sufficient basis of estoppel. that the representation must have been made "ith 'no"ledge of the facts and that the part! to "hom it "as made is ignorant of the truth of the matter (1e Castro vs. /. "ithin ten (. among others.urisdiction to ta'e cogni)ance of the same.0 (#ection 6.ect matter. Rule . ho"ever. :he exceptional circumstances involved in Si on!"ano# "hich . 6E #CR C6/). part of the blame should be placed on the court "hich shall entertain the suit.udgment ma! be impeached or annulled for lac' of . 2t could have been the result of an honest mista'e or of divergent interpretation of doubtful legal provisions. :he filing of an action or suit in a court that does not possess .urisdiction is not lost b! "aiver or b! estoppel. $ id).even on appeal.ustified the departure from the accepted concept of non3"aivabilit! of ob.urisdiction has been ignored and.udgment "ithout .urisdiction (#ec. such . that the holding in said case had been applied to situations "hich "ere obviousl! not contemplated therein. par.urisdiction to entertain the same ma! not be presumed to be deliberate and intended to secure a ruling "hich could later be annulled if not favorable to the part! "ho filed such suit or proceeding in a court that lac's . xxx xxx xxx 2t is neither fair nor legal to bind a part! b! the result of a suit or proceeding "hich "as ta'en cogni)ance of in a court "hich lac's . it is the dut! of the court to dismiss an action 0"henever it appears that court has no . . :he eAuitable defense of estoppel reAuires 'no"ledge or consciousness of the facts upon "hich it is based .@) !ears from the finalit! of the same ( rt.ection to .urisdiction over the sub. :he same thing is true "ith estoppel b! conduct "hich ma! be asserted onl! "hen it is sho"n. :his doctrine has been Aualified b! recent pronouncements "hich stemmed principall! from the ruling in the cited case of Si on!"ano#. 5ineta. thereb! lulling the parties into believing that the! pursued their remedies in the correct forum. /@. ?nder the rules.urisdiction. .

-@. 4$ERED(RE. 2t is of no moment that %ailoces.ustice could onl! validl! act upon a cause of action or sub. the Auestioned decision of the Labor rbiter and the Resolution of the NLRC dismissing petitioners0 appeal from said decision are hereb! set aside because rendered "ithout . vs.udice to private respondent0s see'ing recourse in the appropriate forum. basis of said decision and Resolution. an! act or omission of the parties (Lagman vs. :he failure of the appellees to invo'e ane" the aforementioned solid ground of "ant of ..-E6H)< hence ma! be considered b! this court motu proprio (5ov0t.urisdiction and said . :he amended complaint for illegal dismissal. it might be said... . . 14 :hese considerations ma'e inevitable the conclusion that the .urisdiction is one conferred onl! b! la"< and cannot be acAuired through. of the corporation. a person "ho is not a mere emplo!ee but a stoc'holder and officer. 6@/ G. &ut this.urisdiction. Phil. in his amended complaint. merican #uret! Co. see's other relief "hich "ould seemingl! fan under the .ect matter of a case over "hich it has .urisdiction.udgment of the Labor rbiter and the resolution of the NLRC are void for lac' of cause of . intimatel! lin'ed "ith his relations "ith the corporation. and is in fact a corporate controvers! in contemplation of the Corporation Code.urisdiction of the Labor rbiter. #( (R1ERE1.udicial po"er.:o be sure.urisdiction of the lo"er court is apparent upon the face of the record and it is fundamental that a court of .urisdiction of the lo"er court in this appeal should not prevent this :ribunal to ta'e up that issue as the lac' of . is not a simple labor problem but a matter that comes "ithin the area of corporate affairs and management.H). and this Court must set matters aright in the exercise of its . ++ #CR 6/+ G. hence.. :he Auestion of remuneration. because a closer loo' at these3underpa!ment of salar! and non3pa!ment of living allo"ance3sho"s that the! are actuall! part of the perAuisites of his elective position. too. is no hindrance to the Court0s considering said issue. "ithout pre.urisdiction in their petition before this Court. petitioners failed to raise the issue of . C . etc. involving as it does. is ordered dismissed. an integral part.. or "aived b!.