254 MAM realty vs NLRC or by the security guard.

On 23 May 1990, prior to the filing of the

complaint, MAM executed a Deed of Transfer, 1 effective 01 July
Doctrine: Corporate directors and officers solidarily liable with the
1990, in favor of the Rancho Estates Phase III Homeowners
corporation for the termination of employment of employees done
Association, Inc., conveying to the latter all its rights and interests
with malice or in bad fait
over the water system in the subdivision.
Facts:
Issue:
The case originated from a complaint filed with the Labor Arbiter by
Whether to hold a director or officer of a corporation solidarily
private respondent Celso B. Balbastro against herein petitioners,
obligated with the latter for a corporate liability.
MAM Realty Development Corporation ("MAM") and its Vice
President Manuel P. Centeno, for wage differentials, "ECOLA," Ruling:
overtime pay, incentive leave pay, 13th month pay (for the years
We agree with petitioners, however, that the NLRC erred in holding
1988 and 1989), holiday pay and rest day pay. Balbastro alleged that
Centeno jointly and severally liable with MAM. A corporation, being
he was employed by MAM as a pump operator in 1982 and had since
a juridical entity, may act only through its directors, officers and
performed such work at its Rancho Estate, Marikina, Metro Manila.
employees. Obligations incurred by them, acting as such corporate
He earned a basic monthly salary of P1,590.00 for seven days of work
agents, are not theirs but the direct accountabilities of the
a week that started from 6:00 a.m. to up until 6:00 p.m. daily.
corporation they represent. True, solidary liabilities may at times be
MAM countered that Balbastro had previously been employed by incurred but only when exceptional circumstances warrant such as,
Francisco Cacho and Co., Inc., the developer of Rancho Estates. generally, in the following cases:
Sometime in May 1982, his services were contracted by MAM for the
1. When directors and trustees or, in appropriate cases, the
operation of the Rancho Estates' water pump. He was engaged,
officers of a corporation —
however, not as an employee, but as a service contractor, at an
agreed fee of P1,590.00 a month. Similar arrangements were likewise (a) vote for or assent to patently unlawful acts of the
entered into by MAM with one Rodolfo Mercado and with a security corporation;
guard of Rancho Estates III Homeowners' Association. Under the
agreement, Balbastro was merely made to open and close on a daily (b) act in bad faith or with gross negligence in directing the
basis the water supply system of the different phases of the corporate affairs;
subdivision in accordance with its water rationing scheme. He (c) are guilty of conflict of interest to the prejudice of the
worked for only a maximum period of three hours a day, and he made corporation, its stockholders or members, and other persons.
use of his free time by offering plumbing services to the residents of
the subdivision. He was not at all subject to the control or supervision
of MAM for, in fact, his work could so also be done either by Mercado
2. When a director or officer has consented to the issuance of
watered stocks or who, having knowledge thereof, did not forthwith
file with the corporate secretary his written objection thereto.
3. When a director, trustee or officer has contractually agreed
or stipulated to hold himself personally and solidarily liable with the
Corporation. 12
4 When a director, trustee or officer is made, by specific
provision of law, personally liable for his corporate action. 13
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. 14
In the case at Bench, there is nothing substantial on record that can
justify, prescinding from the foregoing, petitioner Centeno's solidary
liability with the corporation.
255 VIRGILIO CALLANTA VS. CARNATION PHILIPPINES, INC. AND
NATIONAL LABOR RELATIONS COMMISSION
Doctrine: The right is considered to be property within the protection
of a constitutional guaranty of due process of law. 12 Clearly then,
when one is arbitrarily and unjustly deprived of his job or means of
livelihood, the action instituted to contest the legality of one's
dismissal from employment constitutes, in essence, an action
predicated "upon an injury to the rights of the plaintiff," as
contemplated under Art. 1146 of the New Civil Code, which must be
brought within four [4] years.
FACTS:
Virgilio Callanta is employed by Carnation Philippines, Inc. as a
salesman. Carnation filed an application for clearance to terminate
the employment of Virgilio Callanta for serious misconduct and
misappropriation of company funds amounting to 12,000.
On June 26, 1979 the Ministry of Labor and Employment approved
the said clearance so Virgilio Callanta was terminated effective June
1, 1979.
On July 5, 1982, Callanta filed with MOLE, a complaint for illegal
dismissal with clains for reinstatement, back wages and damages
against respondent Carnation.
Carnation alleged that the complaint is barred by prescription for
having been filed more than 3 years after the date of Callanta’s
dismissal.
Labor Arbiter rendered a decision finding the termination of
Callanta’s employment to be without valid cause and ordered
reinstatement.
 Carnation appealed to NLRC. NLRC set aside the decision of the In said case, this Court had occasion to hold that an action for
Labor Arbiter and it declared that the complaint for illegal damages involving a plaintiff seperated from his employment for
dismissal filed by Virgilio Callanta to have already prescribed. alleged unjustifiable causes is one for " injury to the rights of the
plaintiff, and must be brought within four [4] years under Art. 1146.
Labor Code provides that:
Furthermore, it is a principle in American jurisprudence which,
Art. 291. Offenses. — Offenses penalized under this Code
undoubtedly, is well-recognized in this jurisdiction that one's
and the rules and regulations issued pursuant
employment, profession, trade or calling is a "property right," and
thereto shall prescribe in three [3] years.
the wrongful interference therewith is an actionable wrong. The
Art. 292. Money claims. — All money claims arising from right is considered to be property within the protection of a
employer- employee relations accruing during the constitutional guaranty of due process of law. Clearly then, when
effectivity of this Code shall be filed within three [3] years from the one is arbitrarily and unjustly deprived of his job or means of
time the cause of action accrued; otherwise, they shall be livelihood, the action instituted to contest the legality of one's
forever barred. dismissal from employment constitutes, in essence, an action
predicated "upon an injury to the rights of the plaintiff," as
Callanta appealed to the supreme court and alleged that the period contemplated under Art. 1146 of the New Civil Code, which must be
has not yet prescribed because the applicable provision is Art. 1146 brought within four [4] years.
of the civil code which gives 4 years.

ISSUE/S: WON an action for illegal dismissal prescribes in three years

pursuant to Articles 291 and 292 of the Labor Code?

RULING/ RATIO: NO. The said action will prescribe in four years based
on Article 1146 of the civil code. In the case of illegal dismissal, no
penalty of fine nor imprisonment is imposed on the employer upon a
finding of illegality in the dismissal. By the very nature of the reliefs
sought, therefore, an action for illegal dismissal cannot be generally
categorized as an "offense" as used under Article 291 of the Labor
Code, which must be brought within the period of three [3] years
from the time the cause of action accrued.

The case of Valencia vs. Cebu Portland Cement, et al., 106 Phil. 732,
a 1959 case cited by petitioner, is applicable in the instant case
insofar as it concerns the issue of prescription of actions.