FIRST DIVISION

[G.R. No. 201497. October 3, 2018.]

JOHN L. TAN , petitioner, vs. DOWNTOWN REALTY INVESTMENT, INC.,

EDWARD LIM, EVELYN TAN, PABLO TAN, AND DAVID TAN ,
respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated
October 3, 2018 which reads as follows:
"G.R. No. 201497 (John L. Tan v. Downtown Realty Investment, Inc.,
Edward Lim, Evelyn Tan, Pablo Tan, and David Tan) . — This is a petition for review
o n certiorari 1 under Rule 45 of the Rules of Court led by John L. Tan (petitioner),
seeking to nullify the Court of Appeals' (CA) April 12, 2012 Decision 2 in CA-G.R. SP No.
118626. The CA denied the petition for certiorari 3 under Rule 65 led by petitioner
against the November 12, 2010 Decision 4 and January 11, 2011 Resolution 5 of the
National Labor Relations Commission (NLRC). The NLRC a rmed the March 30, 2010
Decision 6 of the Labor Arbiter (LA) dismissing the complaint for illegal dismissal led
by petitioner against Downtown Realty Investment, Inc. (DRI), Edward Lim, Evelyn Tan,
Pablo Tan, and David Tan [collectively, respondents] for lack of jurisdiction over the
subject matter. 7
DRI is a closed family corporation principally engaged in the business of leasing
out o ce and business spaces. 8 It was founded and owned by Tan Pee. In 1958, Tan
Pee's four sons, namely, Robert Tan Yu Sam, Tan Poe Lion, 9 Tan Sam Yu, and Tan Yu Tit,
formally incorporated DRI. Petitioner is the grandson of Tan Pee thru Tan Poe Lion. 1 0
SCaITA

Sometime in 1974, Tan Pee, as then President and General Manager of DRI,
asked petitioner to be the Building Administrator of the Downtown Center Building
(building). Among petitioner's duties then were to collect rentals from the tenants and
to administer the building. In 1983, Tan Pee died, and petitioner's father, Tan Poe Lion,
succeeded him as President and General Manager. In 1984, petitioner became DRI's
"Manager" to assist his father in running the business. In 1989, petitioner acquired a
sizeable stockholding in the corporation. 1 1
In 2002, Tan Poe Lion died, and petitioner's uncle, Tan Yu Tit, succeeded as
President of DRI. During Tan Yu Tit's presidency, petitioner remained as "Manager" and
assisted the former in the performance of his duties. Petitioner also became a Director
of DRI, representing his father's line. 1 2
On February 28, 2008, the stockholders, in a special meeting, discussed the
following matters: (1) the offer of one Alfredo Yao (Yao) to buy DRI; (2) the grant of
separation bene t of P2,500,000.00 to petitioner, P500,000.00 of which would be
personally shouldered by brothers George Tan Ty Beng, Tan Ti Giap, and Joshua Tan;
and (3) the assignment of petitioner, among others, to represent DRI in its negotiations
with Yao. 1 3
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 In January 2009, the group of Evelyn Tan, Pablo Tan, David Tan, and Edward Lim
(Tan group), representing the line of Tan Yu Sam, acquired 50% of DRI's shareholdings
and became the dominant group within the company. 1 4 In the annual stockholders'
meeting held on January 6, 2009, Edward Lim replaced Tan Yu Tit as President. A new
set of directors, sans petitioner, were also elected for the year 2009. 1 5
In a letter 1 6 dated February 2, 2009, Edward Lim informed petitioner that, as
President, he was taking over petitioner's functions as "General Manager." This was
followed by the di cult turnover of the operation and properties of DRI due to
petitioner's refusal to cooperate with the newly elected o cers in the turnover of the
following: (1) the certi cates of title, corporate papers, receipts, and other documents;
and (2) the lease payments in the form of petty cash. 1 7
On July 22, 2009, 1 8 petitioner led a complaint for illegal dismissal, non-
payment of 13th month pay, separation pay, moral and exemplary damages, and
attorney's fees with the LA against DRI and the Tan group. 1 9 aTHCSE

On August 1, 2009, or two weeks after the complaint's ling, Yao acquired full
ownership of DRI, including petitioner's shareholdings. Consequently, the Tan group,
among others, vacated the seats of the Board of Directors and O cers and turned over
the operations of the company to its new owner. 2 0
On November 9, 2009, DRI and the Tan group led with the LA their position
paper with motion to dismiss. 2 1 They averred that: (1) the individuals impleaded in the
complaint are not the real parties in interest; and (2) the LA had no jurisdiction over the
case because petitioner was not a regular employee but a corporate o cer, director,
and shareholder of DRI. 2 2
On March 30, 2010, the LA dismissed the case for lack of jurisdiction over the
subject matter. 2 3 He ruled that petitioner was considered as an o cer of DRI. 2 4 The
NLRC adopted the ndings of the LA, adding that since petitioner is a stockholder of
DRI, the case is an intra-corporate controversy covered by Presidential Decree No. 902-
A 2 5 (PD 902-A), properly cognizable by the Regional Trial Court (RTC) acting as a
special commercial court. 2 6
The CA denied petitioner's petition for certiorari under Rule 65. 2 7 It found no
grave abuse of discretion on the NLRC's part in holding that the subject of the
controversy involves an intra-corporate dispute cognizable by RTCs. Petitioner held the
position of "Manager" who is speci cally tasked with the overall management of the
company. As "Manager," he held a signi cant role in the running of the affairs of the
corporation and performed the functions of the General Manager under DRI's by-laws.
2 8 His appointment as "Manager" was not just made by the sitting Presidents but by the
Board of Directors. 2 9 The various General Information Sheets (GIS) submitted by DRI
to the Securities and Exchange Commission (SEC) also declared petitioner as a
shareholder, director, and officer of the corporation. 3 0
Here, petitioner maintains that: (1) he is not the General Manager but merely a
regular employee of DRI; (2) he was initially hired as Building Administrator and
eventually promoted to "Manager" in charge of the over-all administration of the
building without the need of concurrence, election, or appointment from the Board; (3)
he never occupied the position of General Manager; (4) the General Manager is not a
corporate o cer; 3 1 (5) his status as director and stockholder did not convert his
dismissal into an intra-corporate dispute; 3 2 and (6) the Tan group acted in bad faith in
terminating his services through a letter dated February 2, 2009 without just or
authorized cause, thus entitling him to the award of damages. 3 3 cAaDHT

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 In their comment, 3 4 respondents counter that the CA Decision is in accord with
law: (1) petitioner is the General Manager, a corporate o cer, of DRI; (2) the by-laws
explicitly provide for the position of General Manager; 3 5 (3) petitioner is deemed a
corporate o cer because his appointment to the position was approved by the Board
of Directors; (4) petitioner failed to present proof that DRI exercised the power of
control over him; 3 6 and (5) the CA already declared in CA-G.R. SP No. 117801, decided
on December 19, 2011, that petitioner is a stockholder, director, and officer of DRI. 3 7
In his reply, 3 8 petitioner reiterates that while it was undisputed that he is a
stockholder and director of DRI, his removal as "Manager" or as "Building Administrator"
involves his tenure as an employee of the company.
The issue for resolution here is whether petitioner is a corporate o cer or a
regular employee of DRI. This is necessary to determine which tribunal has jurisdiction
over the case.
We deny the petition.

At the outset, we stress that in reviewing labor cases brought to this Court via a
Rule 45 petition from a Rule 65 petition before the CA, we do not re-examine the
correctness of the NLRC decision. Our power of review is limited to the determination
of whether the CA correctly resolved the presence or absence of grave abuse of
discretion on the part of the NLRC. We said in Montoya v. Transmed Manila
Corporation: 3 9
x x x In a Rule 45 review, we consider the correctness of the assailed
CA decision , in contrast with the review for jurisdictional error that we
undertake under Rule 65. Furthermore, Rule 45 limits us to the review of
questions of law raised against the assailed CA decision. In ruling for legal
correctness, we have to view the CA decision in the same context that the
petition for certiorari it ruled upon was presented to it; we have to examine
the CA decision from the prism of whether it correctly determined the
presence or absence of grave abuse of discretion in the NLRC decision
before it, not on the basis of whether the NLRC decision on the merits
of the case was correct . In other words, we have to be keenly aware that the
CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it. This is the approach that should be basic in a Rule 45
review of a CA ruling in a labor case. In question form, the question to ask
is: Did the CA correctly determine whether the NLRC committed grave
abuse of discretion in ruling on the case? 4 0 (Emphasis in the original;
citations omitted.) HCaDIS

In resolving this issue, we go back to the basic precepts governing a Rule 65

petition. A special civil action for certiorari under Rule 65 does not concern itself with
errors of judgment; its province is con ned to issues of jurisdiction or grave abuse of
discretion. "Grave abuse of discretion connotes judgment exercised in a capricious and
whimsical manner that is tantamount to lack of jurisdiction. To be considered 'grave,'
discretion must be exercised in a despotic manner by reason of passion or personal
hostility, and must be so patent and gross as to amount to an evasion of positive duty
or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of
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 law." 4 1
In labor disputes, grave abuse of discretion may be ascribed to the NLRC: (1)
when its ndings and conclusions are not supported by substantial evidence or are in
total disregard of evidence material to, or even decisive of, the controversy; (2) when it
is necessary to prevent a substantial wrong or to do substantial justice; (3) when the
ndings of the NLRC contradict those of the LA; and (4) when necessary to arrive at a
just decision of the case. 4 2
Bearing these in mind, we now proceed to determine whether there is grave
abuse of discretion on the part of the NLRC in affirming the LA's decision.

II

Jurisdiction over the subject matter is conferred by law. 4 3 Section 5.2 of

Republic Act No. 8799 4 4 (RA 8799), in relation to PD 902-A, conferred jurisdiction over
intra-corporate controversies on RTCs to be designated by this Court (special
commercial courts). 4 5 These controversies, as identi ed in Section 5 of PD 902-A, are
as follows:
a) Devices or schemes employed by or any acts, of the board of directors,
business associates, its o cers or partnership, amounting to fraud and
misrepresentation which may be detrimental to the interest of the public
and/or of the stockholder, partners, members of associations or
organizations registered with the Commission;
b) Controversies arising out of intra-corporate 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;
AHCETa

c) Controversies in the election or appointments of directors,

trustees, o cers or managers of such corporations, partnerships
or associations. (Emphasis supplied.)
Generally, the determination of whether a dispute falls within the ambit of an
intra-corporate controversy depends upon the satisfaction of two tests: (1) the
relationship test; and (2) the nature of the controversy test. 4 6 Under the relationship
test, there is an intra-corporate controversy when the dispute is: (a) between the
corporation, partnership, or association and the public; (b) between the corporation,
partnership, or association and its stockholders, partners, members, or o cers; (c)
between the corporation, partnership, or association and the State as far as its
franchise, permit, or license to operate is concerned; and (d) among stockholders,
partners, or associates themselves. 4 7 On the other hand, the nature of the controversy
test requires us to look beyond the relationship of the parties and examine the nature of
the dispute. An intra-corporate controversy arises when the controversy is also rooted
"in the enforcement of the parties' correlative rights and obligations under the
Corporation Code and the internal and intra-corporate regulatory rules of the
corporation." 4 8
When the controversy, however, involves the dismissal of a corporate o cer, it
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 "is always regarded as a corporate act and/or an intra-corporate controversy:" 4 9
A corporate o cer's dismissal is always a corporate act, or an intra-
corporate controversy which arises between a stockholder and a corporation,
and the nature is not altered by the reason or wisdom with which the Board of
Directors may have in taking such action. The issue of the alleged termination
involving a corporate officer, not a mere employee, is not a simple labor problem
but a matter that comes within the area of corporate affairs and management
and is a corporate controversy in contemplation of the Corporation Code. 5 0
(Citations omitted.)
Thus, courts of general jurisdiction have original and exclusive jurisdiction over
cases involving the removal of corporate o cers. 5 1 This dispute is beyond the
jurisdiction of the LA or the NLRC since their authority to decide cases only
encompasses employer-employee relations. 5 2
In cases involving a complaint for illegal dismissal, a distinction must be made
between a "regular employee" and a "corporate o cer" for purposes of establishing the
dispute's true nature and determining which body has jurisdiction over it. 5 3 In Cosare v.
Broadcom Asia, Inc., 5 4 we explained that two circumstances "must concur in order for
an individual to be considered a corporate o cer, as against an ordinary employee or
o cer, namely: (1) the creation of the position is under the corporation's charter or by-
laws; and (2) the election of the officer is by the directors or stockholders." 5 5 ScHADI

The con ict here does not concern petitioner's status as a stockholder or
director but his removal by the Board of Directors from what he claims to be an
employment position. Applying the foregoing rules, as well as the parameters by which
we resolve this case, we nd that the CA correctly ruled that no grave abuse of
discretion attended the NLRC's Decision. The LA and NLRC's conclusion that petitioner
was a corporate officer is supported by substantial evidence.
Contrary to petitioner's claims, DRI's By-Laws 5 6 explicitly create the position and
o ce of the General Manager without the need of an enabling clause. 5 7 The By-Laws
detail the General Manager's o ce as having the "power to supervise, direct and
control the management of the business and operation of the corporation to its best
interests, advantage and pro t, subject to such policies, regulations or limitations as
the Board of Directors may lay down." 5 8 While the By-Laws state that the President, by
default, shall concurrently hold the same position, they also allow for an exception
where the Board of Directors may provide otherwise. 5 9 A person other than the
President may, if the Board of Directors so provides, occupy the o ce of the General
Manager, as what petitioner did. Thus, we agree with respondents that the General
Manager is a corporate officer of DRI.
While we have ruled before that the General Manager is not a corporate officer, 6 0
it was for the reason that there was no express mention in the By-Laws for the position
of the General Manager. We emphasized that a general enabling clause allowing the
Board of Directors to create an additional o ce is insu cient to give the o ce created
a corporate character. 6 1 This is not the case here. 6 2
At this juncture, the conclusion that petitioner occupied the position of General
Manager is also supported by substantial evidence. Petitioner's appointment to the
position is supported by the minutes of the meeting of the Board of Directors held on
January 28, 2008. 6 3 The GIS, submitted by DRI to the SEC, listed petitioner as an
o cer under the nomenclature of "Manager." 6 4 More, petitioner cannot downplay his
position by claiming that he was a mere "Manager" of the building. Petitioner himself
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 admits that the building is the only asset of the corporation. 6 5 Even as DRI was about
to be sold, he was authorized to represent DRI in its negotiations with Yao. 6 6 What is
apparent is that petitioner actively participated in the running of DRI's affairs pursuant
to the functions of a General Manager. The imprecise nomenclature of his position
cannot detract from the fact that petitioner exercised the functions of General Manager
under the By-Laws and was treated as such by DRI.
Noteworthy also is the observation of the CA that petitioner failed to prove that
he was still an employee at the time of the termination. 6 7 Petitioner failed to
substantiate his claim of employment, particularly, the control test. As ruled by the LA:
aICcHA

In the case at bench, to show that respondent [DRI] is his employer,

complainant showed his Income Tax Returns (ITR). If at all, this document only
establishes payment of wages and is insu cient to establish employer-
employee relationship. Complainant discussed the elements of
employee-employer relationship, however there is no su cient
narration as to the exact nature of his work or that the same is under
the control of respondent [DRI]. This being the case, this o ce has no
basis to determine whether complainant's position and how he
performs the same can sufficiently pass the control test.
On the other hand, the records are replete with evidence that complainant
is a corporate o cer. Among them is the General Information Sheet (G.I.S.) of
respondent [DRI], showing and naming complainant as either "Corporate
Secretary/Manager" or "Manager." The purpose of the G.I.S. is to name and
identify the corporate o cers of a corporation. Normally, an employment
position is not, in the rst place stated in the G.I.S. Under this premise, while
complainant is merely referred to as "Manager," in the G.I.S. it is obvious that the
intention of the corporate o cers is to treat him as among the o cers, in the
same category as the President, Secretary and the Treasurer.
Too, the records show that complainant has a vital role not only as
"Manager" of the corporation, but also as part of the policy making body.
Complainant is referred in communications as an o cer of the corporation and
was even part of the delegation who represented the corporation when the same
was sold. 6 8 (Emphasis and underscoring supplied.)
In sum, the validity of petitioner's removal from a corporate o ce is an intra-
corporate controversy which falls under the jurisdiction of the regional trial courts. We
thus sustain the CA's nding that no grave abuse of discretion attended the NLRC and
LA's decisions in dismissing the case for lack of jurisdiction over the subject matter.
WHEREFORE , the petition is DENIED . The Court of Appeals' Decision dated
April 12, 2012 in CA-G.R. SP No. 118626 is AFFIRMED . No costs. EHaASD

SO ORDERED." Bersamin, J. , on official travel.

Very truly yours,

(SGD.) LIBRADA C. BUENA

Division Clerk of Court

Footnotes

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 1. Rollo, pp. 447-479.

2. Id. at 482-499; penned by Associate Justice Manuel M. Barrios, with the concurrence of
Associate Justices Juan Q. Enriquez, Jr. and Apolinario D. Bruselas, Jr.

3. Id. at 346-377.
4. Id. at 504-512.
5. Id. at 501-502.
6. Id. at 703-717.
7. Id. at 512. The dispositive portion of the NLRC Decision reads:

   WHEREFORE , premises considered, the appeal is hereby DENIED for lack of merit. The
Decision below is hereby AFFIRMED, in toto.

   SO ORDERED.
8. Id. at 482-483.
9. Also referred to as Tan Poe Liong in other parts of the record.
10. Rollo, pp. 866-867.
11. Id. at 483.

12. Id.
13. Rollo, pp. 540-541.
14. Id. at 539, 486.
15. Id. at 596.
16. Id. at 603.

17. Id. at 908-911.

18. Id. at 576, 706.
19. Id. at 452-453.
20. Id. at 488.

21. Id. at 581-595.

22. Id. at 488-489.
23. Id. at 716-717. The dispositive portion of the LA's Decision reads:
   WHEREFORE , foregoing premises considered, the instant case is hereby DISMISSED
for lack of jurisdiction.
   SO ORDERED.
24. Id. at 711-716.

25. Reorganization of the Securities and Exchange Commission with Additional Powers and
Placing the Said Agency under the Administrative Supervision of the Office of the
President (1976).
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 26. Rollo, pp. 510-511.
27. Id. at 498-499. The dispositive portion of the CA Decision reads:

   WHEREFORE , the petition is DENIED . The Decision dated 12 November 2010 and the
Resolution dated 11 January 2011 of the National Labor Relations Commission are
SUSTAINED .
   SO ORDERED.
28. Id. at 493-494.

29. Id. at 490-491.

30. Id. at 493.
31. Id. at 459-460.
32. Id. at 466-467.

33. Id. at 470.

34. Id. at 865-885.
35. Id. at 874-876.
36. Id. at 878.
37. Id. at 881-882.

38. Id. at 938-943.

39. G.R. No. 183329, August 27, 2009, 597 SCRA 334.
40. Id. at 342-343.
41. E. Ganzon, Inc. (EGI) v. Ando, Jr., G.R. No. 214183, February 20, 2017, 818 SCRA 165, 173-
174. Citation omitted.
42. Id. at 174.
43. Aguirre II v. FQB+7, Inc., G.R. No. 170770, January 9, 2013, 688 SCRA 242, 257.

44. THE SECURITIES REGULATION CODE.

45. Aguirre II v. FQB+7, Inc., supra; Republic Act No. 8799, Sec. 5.2. The Commission's
jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A
is hereby transferred to the Courts of general jurisdiction or the appropriate Regional
Trial Court: Provided, That the Supreme Court in the exercise of its authority may
designate the Regional Trial Court branches that shall exercise jurisdiction over these
cases. x x x

46. See San Jose v. Ozamiz, G.R. No. 190590, July 12, 2017; and Marc II Marketing, Inc. v.
Joson, G.R. No. 171993, December 12, 2011, 662 SCRA 35, 51.
47. Real v. Sangu Philippines, Inc., G.R. No. 168757, January 19, 2011, 640 SCRA 67, 80-81,
citing Reyes v. Regional Trial Court of Makati, Br. 142, G.R. No. 165744, August 11, 2008,
561 SCRA 593, 609-610.
48. San Jose v. Ozamiz, G.R. No. 190590, July 12, 2017.

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 49. Marc II Marketing, Inc. v. Joson, G.R. No. 171993, December 12, 2011, 662 SCRA 35, 50.
50. Wesleyan University-Philippines v. Maglaya, Sr., G.R. No. 212774, January 23, 2017, 815
SCRA 171, 189.
51. Id. at 189-190.
52. See Cosare v. Broadcom Asia, Inc., G.R. No. 201298, February 5, 2014, 715 SCRA 534, 547-
548.
53. Id. at 548, citing Matling Industrial and Commercial Corporation v. Coros, G.R. No. 157802,
October 13, 2010, 633 SCRA 12.
54. Supra note 52.
55. Id. at 549.

56. Rollo, pp. 604-613.

57. Id. at 607.
58. Id. at 610.
59. Id. at 607.
60. See Marc II Marketing, Inc. v. Joson, supra note 49 at 58.

61. Id. at 52-54.

62. See Easycall Communications Phils., Inc. v. King, G.R. No. 145901, December 15, 2005, 478
SCRA 102, 110.
63. Rollo, p. 921. The pertinent portion of the resolution states:
   RESOLVED, to elect and/or appoint as it does elect and/or appoint the following
officers of the company for the year 2008-2009:
   1. MR. TAN YU TIT — President

xxx xxx xxx

   5. MR. JOHN TAN — Manager (Emphasis supplied.)

64. Id. at 493.

65. Id. at 451.
66. Id. at 541.
67. Id. at 493-494.

68. Id. at 712-713.

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