15. CACHO v. BALAGTAS
The Decision
[G.R. No.202974; February 7, 2018]
Petitioners: Norma D. Cacho and North Star
International Travel, Inc.
Respondents: Virginia D. Balagtas
FACTS:
Respondent Virginia D. Balagtas filed a complaint of
constructive dismissal against petitioners North Star
International Travel, Inc. (North Star) and its President
Norma D. Cacho (Cacho) before the Labor Arbiter.
Balagtas after 14 years of service in the said
corporation, was placed under 30 days preventive
suspension pursuant to a Board Resolution passed by
the Board of Directors of the respondent Corporation
due to her alleged questionable transactions.
While under preventive suspension, she wrote a letter
to Norma Cacho informing the latter that she was
assuming her position as Executive Vice-President/Chief
Executive Officer effective on that date; however, she
was prevented from re-assuming her position.
Consequently, she filed a complaint claiming that she
was constructively and illegally dismissed effective on
April 12, 2004. In their defense, Cacho and North Star
averred that preventive suspension was meant to
prevent Balagtas from influencing potential witnesses
and to protect the respondent corporation's property.
Subsequently, the Board of Directors constituted an
investigation committee tasked with the duty to
impartially assess the charges against petitioner. Cacho,
et al. alleged that Balagtas violated her suspension
when, on several occasions, she went to the
corporation's office and insisted on working despite
respondent Norma Cacho's protestation. They asserted
that petitioner was not illegally dismissed but was
merely placed under preventive suspension.
The Labor Arbiter found that Balagtas was illegally
dismissed from North Star but the latter appealed to the
NLRC for lack of jurisdiction. They contend that Balagtas
was never dismissed and alleged that she was a
corporate officer, incorporator, and member of the
North Star's Board of Directors. Thus, the NLRC cannot
take cognizance of her illegal dismissal case, the same
being an intra-corporate controversy, which properly
falls within the original and exclusive jurisdiction of the
ordinary courts.
The NLRC ruled in favor of the petitioners.
of the Labor Arbiter is REVERSED and SET ASIDE and the
complaint is DISMISSED for lack of jurisdiction.
However, the CA affirmed the Labor Arbiter’s Decision
and set aside the Decision of the NLRC.
ISSUE:
Whether or not the present case is an intra-corporate
controversy within the jurisdiction of the regular courts
or an ordinary labor dispute that the Labor Arbiter may
properly take cognizance of.
HELD:
1. Respondent Balagtas's dismissal is an intra-
corporate controversy.
A two-tier test must be employed to determine
whether an intra-corporate controversy exists in the
present case, viz.: (a) the relationship test, and (b) the
nature of the controversy test.
A dispute is considered an intra-corporate controversy
under the relationship test when the relationship
between or among the disagreeing parties is any one of
the following: (a) between the corporation, partnership,
or association and the public; (b) between the
corporation, partnership, or association and its
stockholders, partners, members, or officers; ( 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 the stockholders,
partners, or associates themselves. We must now
determine whether or not the Executive Vice President
position is a corporate office so as to establish the intra-
corporate relationship between the parties.
One shall be considered a corporate officer only if two
conditions are met, viz.: ( 1) the position occupied was
created by charter/by-laws, and (2) the officer was
elected (or appointed) by the corporation's board of
directors to occupy said position.
The Executive Vice President position is one of the
corporate offices provided in petitioner North Star's By-
laws. Section 25 of the Corporation Code32 explicitly
provides for the election of the corporation's president,
treasurer, secretary, and such other officers as may be
provided for in the by-laws. In interpreting this
provision, the Court has ruled that if the position is
other than the corporate president, treasurer, or
secretary, it must be expressly mentioned in the bylaws determined by petitioner Cacho as petitioner North
in order to be considered as a corporate office. Star's President.

North Star’s by-laws provides that there may be one or
more vice president positions in petitioner North Star
and, by virtue of its by-laws, all such positions shall be
corporate offices. The next question is whether or not
the phrase "one or more vice president" in the above-
cited provision of the by-laws includes the Executive
Vice President position held by respondent Balagtas.
The use of the phrase "one or more" in relation to the
establishment of vice president positions without
particular exception indicates an intention to give
petitioner North Star's Board ample freedom to make
several vice president positions available as it may
deem fit and in consonance with sound business
practice. To require that particular
designation/variation of each vice-president (i.e.,
executive vice president) be specified and enumerated
is to invalidate the by-laws' true intention and to
encroach upon petitioner North Star's inherent right
and authority to adopt its own set of rules and
regulations to govern its internal affairs. By name, the
Executive Vice President position is embraced by the
phrase "one or more vice president" in North Star's by-
laws.
2. Respondent Balagtas was appointed by the
Board as petitioner North Star's Executive Vice
President
While a corporate office is created by an express
provision either in the Corporation Code or the By-laws,
what makes one a corporate officer is his election or
appointment thereto by the board of directors. Thus,
there must be documentary evidence to prove that the
person alleged to be a corporate officer was appointed
by action or with approval of the board. Petitioners
Cacho and North Star assert that respondent Balagtas
was elected as Executive Vice President by the Board as
evidenced by the Secretary's Certificate dated April 22,
2003.
Respondent Balagtas also denies her status as one of
petitioner North Star's corporate officers because she
was not listed as such in petitioner North Star's 2003
General Information Sheet (GIS). But the GIS neither
governs nor establishes whether or not a position is an
ordinary or corporate office. At best, if one is listed in
the GIS as an officer of a corporation, his/her position as
indicated therein could only be deemed a regular office,
and not a corporate office as it is defined under the
Corporation Code.
To be considered an intra-corporate controversy, the
dismissal of a corporate officer must have something to
do with the duties and responsibilities attached to
his/her corporate office or performed in his/her official
capacity.
The termination complained of is intimately and
inevitably linked to respondent Balagtas's role as
petitioner North Star's Executive Vice President: first,
the alleged misappropriations were committed by
respondent Balagtas in her capacity as vice president,
one of the officers responsible for approving the
disbursements and signing the checks. And, second,
these alleged misappropriations breached petitioners
Cacho's and North Star's trust and confidence
specifically reposed m respondent Balagtas as vice
president. That all these incidents are adjuncts of her
corporate office lead the Court to conclude that
respondent Balagtas's dismissal is an intra-corporate
controversy, not a mere labor dispute.
All told, the issue in the present case is an intra-
corporate controversy, a matter outside the Labor
Arbiter's jurisdiction.

The above-cited Secretary's Certificate overcomes

respondent Balagtas's contention that she was merely
the Executive Vice President by name and was never
empowered to exercise the functions of a corporate
officer. Notably, she did not offer any proof to show
that her duties, functions, and compensation were all
ROLANDO DE ROCA, Petitioner, vs. EDUARDO hand, and Oceanic and Ewayan on the other, is
C. DABUY AN, JENNIFER A. BRANZUELA, effective only between them; it does not extend to
JENNYL YN A. RI CARTE, and HERMINIGILDO petitioner, who is not a party thereto. His only role
F. SABANATE, Respondents is as lessor of the premises which Oceanic leased
to operate as a hotel; he cannot be deemed as
respondent’s employer — not even under the
[G.R. No. 215281, March 5, 2018] pretext that he took over as the “new management”
of the hotel operated by Oceanic. There simply is
FIRST DIVISION, DEL CASTILLO, J. no truth to such claim. To allow respondents to
Nature of the Action: Complaint for Illegal recover their monetary claims from petitioner would
Dismissal necessarily result in their unjust enrichment. There
is unjust enrichment ‘when a person unjustly retains
a benefit to the loss of another, or when a person
retains money or property of another against the
FACTS: Private respondents filed a complaint for
fundamental principles of justice, equity and good
illegal dismissal against "RAF Mansion Hotel Old
conscience.’ The principle of unjust enrichment
Management and New Management and Victoriano
requires two conditions: (1) that a person is
Ewayan." Later, private respondents amended the
benefited without a valid basis or justification, and
complaint and included petitioner Rolando De Roca
(2) that such benefit is derived at the expense of
as [co]-respondent. The labor arbiter rendered a
another. The main objective of the principle against
decision directing petitioner De Roca, among
unjust enrichment is to prevent one from enriching
others, to pay backwages and other monetary
himself at the expense of another without just
award to private respondents. De Roca argues that
cause or consideration.
the Labor Arbiter's decision is null and void as there
was no determination of facts and evidence relative
to his supposed liability to respondents; that he was
not at any time the respondents' employer, but
merely the owner-lessor of the premises where
Ewayan and his Oceanic Travel and Tours Agency
operated the RAF Mansion Hotel where
respondents were employed as hotel staff; that the
labor tribunals did not acquire jurisdiction over him
since the element of employer-employee
relationship was lacking; that he was impleaded in
the case only because respondents could no longer
trace the whereabouts of their true employer,
Ewayan, who appears to have absconded - for
which reason respondents aim to unduly recover
their claims from him.

ISSUE: Whether or not petitioner De Roca is

solidarily liable with Ewayan/Oceanic Travel And
Tour Agency to private respondents.

HELD: No. Contracts take effect only between the

parties, their assigns and heirs, except in case
where the tights and obligations arising from the
contract are not transmissible by their nature, or by
stipulation or by provision of law.” The contract of
employment between respondents, on the one
G.R. No. 181416               November 11, 2013
MEDICAL PLAZA MAKATI CONDOMINIUM
CORPORATION vs. ROBERT H. CULLEN
Facts:
>Respondent Robert H. Cullen purchased from MLHI
condominium Unit No. 1201 of the Medical Plaza
Makati.
>On September 19, 2002, petitioner, through its
corporate secretary, Dr. Jose Giovanni E. Dimayuga,
demanded from respondent payment for alleged
unpaid association dues and assessments amounting to
₱145,567.42.
Defense of Respondent: claiming that he had been
religiously paying his dues shown by the fact that he
was previously elected president and director of
petitioner.
Petitioners Argument: claimed that respondent’s
obligation was a carry-over of that of MLHI.
Consequence: respondent was prevented from
exercising his right to vote and be voted for during the
2002 election of petitioner’s Board of Directors.
>Respondent thus clarified from MLHI the veracity of
petitioner’s claim, but MLHI allegedly claimed that the
same had already been settled. This prompted
respondent to demand from petitioner an explanation
why he was considered a delinquent payer despite the
settlement of the obligation. Petitioner failed to make
such explanation. Hence, the Complaint for Damages8
filed by respondent against petitioner and MLHI.
RTC
>Petitioner and MLHI filed their separate motions to
dismiss the complaint on the ground of lack of
jurisdiction.
>MLHI contention: MLHI claims that it is the Housing
and Land Use Regulatory Board (HLURB) which is vested
with the exclusive jurisdiction to hear and decide the
case.
>Petitioners Contention: Petitioner, on the other hand,
raises the following specific grounds for the dismissal of
the complaint: (1) estoppel as respondent himself
approved the assessment when he was the president;
(2) lack of jurisdiction as the case involves an intra-
corporate controversy; (3) prematurity for failure of
respondent to exhaust all intra-corporate remedies; and
(4) the case is already moot and academic, the
obligation having been settled between petitioner and
MLHI.
RTC DECISION: RTC rendered a Decision granting
petitioner’s and MLHI’s motions to dismiss and,
consequently, dismissing respondent’s complaint. The
trial court agreed with MLHI that the action for specific
performance filed by respondent clearly falls within the
exclusive jurisdiction of the HLURB. As to petitioner, the
court held that the complaint states no cause of action,
considering that respondent’s obligation had already
been settled by MLHI. It, likewise, ruled that the issues
raised are intra-corporate between the corporation and
member.
CA DECISION: the CA reversed and set aside the trial
court’s decision and remanded the case to the RTC for
further proceedings. Contrary to the RTC conclusion,
the CA held that the controversy is an ordinary civil
action for damages which falls within the jurisdiction of
regular courts. It explained that the case hinged on
petitioner’s refusal to confirm MLHI’s claim that the
subject obligation had already been settled as early as
1998 causing damage to respondent.
Issue: does the controversy involve intra-corporate
issues as would fall within the jurisdiction of the RTC
sitting as a special commercial court or an ordinary
action for damages within the jurisdiction of regular
courts?
Held: An intra-corporate controversy is one which
pertains to any of the following relationships: (1)
between the corporation, partnership or association
and the public; (2) between the corporation,
partnership or association and the State insofar as its
franchise, permit or license to operate is concerned; (3)
between the corporation, partnership or association
and its stockholders, partners, members or officers; and
(4) among the stockholders, partners or associates
themselves.
Relationship Test: the existence of any of the above
intra-corporate relations makes the case intra-
corporate.
Nature of the controversy test: "the controversy must
not only be rooted in the existence of an intra-
corporate relationship, but must as well pertain to the
enforcement of the parties’ correlative rights and
obligations under the Corporation Code and the internal
and intra-corporate regulatory rules of the
corporation." In other words, jurisdiction should be
determined by considering both the relationship of the
parties as well as the nature of the question involved.
>Admittedly, petitioner is a condominium corporation
duly organized and existing under Philippine laws,
charged with the management of the Medical Plaza
Makati. Respondent, on the other hand, is the
registered owner of Unit No. 1201 and is thus a
stockholder/member of the condominium corporation.
Clearly, there is an intra-corporate relationship between
the corporation and a stockholder/member.
Applicability of RA 9904: Republic Act (RA) No. 9904, or
the Magna Carta for Homeowners and Homeowners’
Associations, approved on January 7, 2010 and became
effective on July 10, 2010, empowers the HLURB to hear
and decide inter-association and/or intra-association
controversies or conflicts concerning homeowners’
associations. However, we cannot apply the same in
the present case as it involves a controversy between a
condominium unit owner and a condominium
corporation. While the term association as defined in
the law covers homeowners’ associations of other
residential real property which is broad enough to cover
a condominium corporation, it does not seem to be the
legislative intent. A thorough review of the
deliberations of the bicameral conference committee
would show that the lawmakers did not intend to
extend the coverage of the law to such kind of
association.
Dispositive Portion: Thus, the intra-corporate dispute
between petitioner and respondent is still within the
jurisdiction of the RTC sitting as a special commercial
court and not the HLURB. The Complaint before the
Regional Trial Court of Makati City, Branch 58, which is
not a special commercial court, docketed as Civil Case
No. 03-1018 is ordered DISMISSED for lack of
jurisdiction. Let the case be REMANDED to the
Executive Judge of the Regional Trial Court of Makati
City for re-raffle purposes among the designated special
commercial courts.
Wesleyan University-Philippines v. Maglaya, Sr.
815 SCRA 171 January 23, 2017
Petitioner: Wesleyan University-Philippines (WUP)
Respondent: Guillermo Maglaya, Sr.
Topic: Corporate Officer; Court jurisdiction over intra-
corporate controversy; Power of Board to appoint and
terminate corporate officer
Doctrine: An office is created by the charter of the
corporation and the officer is elected by the directors or
stockholders, while an employee usually occupies no
office and generally is employed not by action of the
directors or stockholders but by the managing officer of
the corporation who also determines the compensation
to be paid to such employee.
Facts:
Petitioner is a non-stock, non-profit,
nonsectarian educational corporation duly organized
and existing under Philippine law on April 28, 1948.
Respondent, on the other hand, was an
appointed corporate member since January 1. 2004. He
was elected President of the University for a five-year
term on 2005 and was re-elected as a trustee on 2007.
In a Memorandum dated November 28, 2008,
the incumbent Bishops of the United Methodist Church
(Bishops) apprised all the corporate members of the
expiration of their terms on December 31, 2008, unless
renewed by the former. The said members, including
Maglaya, sought the renewal of their membership in
the WUP’s Board, and signified their willingness to serve
the corporation.
On January 10, 2009, Dr. Dominador Cabasal,
Chairman of the Board, informed the Bishops of the
cessation of corporate terms of some of the trustees
since the by-laws provided that vacancy shall only be
filed by the Bishops upon the recommendation by the
Board. Thereafter, the Bishops appointed the incoming
corporate members and trustees who were formally
introduced on April 24, 2009., the new President
informed Maglaya of the termination of his service and
authority as President of the University on April 27,
2009.
Maglaya and other former member of the
Board filed a complaint for injunction and damages
before the trial court. The RTC dismissed the complaint
declaring the same as nuisance or harassment suit
prohibited by Sec. 1(b) Rule 1 of the Interim Rules for
Intra-Corporate Controversies. Upon appeal, the CA and
the SC both dismissed the complaint and affirmed
decision of RTC.
 Thereafter, Maglaya filed on the present illegal determines the compensation to be paid to such
dismissal case against WUP with the Labor Arbiter. He employee.
claimed that he was a mere employee of the University
and was unceremoniously dismissed in a wanton, From the foregoing, that the creation of the
reckless, oppressive, and malevolent manner. position is under the corporation’s charter or bylaws,
and that the election of the officer is by the directors or
WUP asseverated that the dismissal or removal stockholders must concur in order for an individual to
of Maglaya being a corporate officer and not a regular be considered a corporate officer, as against an ordinary
employee is a corporate act or intra-corporate employee or officer. It is only when the officer claiming
controversy under the jurisdiction of the RTC. to have been illegally dismissed is classified as such
corporate officer that the issue is deemed an intra-
LA: In favour of WUP; Since Maglaya was appointed as corporate dispute which falls within the jurisdiction of
President of the University by the Board, he was a the trial courts.
corporate officer and not a mere employee. The instant It is apparent from the bylaws of WUP that the
case involves intra- corporate dispute, which was president was one of the officers of the corporation,
definitely beyond the jurisdiction of the labor tribunal. and was an honorary member of the Board. He was
appointed by the Board and not by a managing officer
NLRC: In favor of Maglaya; The illegal dismissal falls of the corporation.
within the jurisdiction of the labor tribunals since the
Board did not elect Maglaya but merely appointed him. The alleged appointment of
Maglaya instead of
election as provided by the bylaws neither convert the
Issue: Whether Maglaya is a corporate officer whose
president of university as a mere employee, nor amend
complaint for dismissal should be filed with the trial
its nature as a corporate officer. A corporate officer’s
courts or is he a mere employee under the jurisdiction
dismissal is always a corporate act, or an intra
of the labor tribunals
-corporate controversy which arises between a
stockholder and a corporation, and the nature is not
Held: Corporate officer- RTC jurisdiction
altered by the reason or wisdom with which the Board
of Directors may have in taking such action.
The Court ruled that NLRC erred in assuming
jurisdiction over Maglaya’s complaint for illegal
The issue of the alleged termination involving a
dismissal against WUP since the subject matter of the
corporate officer, not a mere employee, is not a simple
instant case is an intra-corporate controversy which the
labor problem but a matter that comes within the area
NLRC has no jurisdiction.
of corporate affairs and management and is a corporate
controversy in contemplation of the Corporation Code.
Corporate officer in the context of Presidential
Decree No. 902-A are those officers of the corporation
Moreover, it is long established rule that
who are given that character by the Corporation Code
jurisdiction over a subject matter is conferred by law.
or by the corporation’s bylaws.
According to Sec.5 (c) of PD 902-A as amended by
Subsection 5.2, Section 5 of Republic Act No. 8799, the
The president, vice president, secretary and
regional trial courts exercise exclusive jurisdiction over
treasurer are commonly regarded as the principal or
all controversies in the election or appointment of
executive officers of a corporation, and they are usually
directors, trustees, officers or managers of
designated as the officers of the corporation. However,
corporations, partnerships or associations.
other officers are sometimes created by the charter or
bylaws of a corporation, or the board of directors may
be empowered under the bylaws of a corporation to
create additional offices as may be necessary. The Court
expounded that an office is created by the charter of
the corporation and the officer is elected by the
directors or stockholders, while an employee usually
occupies no office and generally is employed not by
action of the directors or stockholders but by the
managing officer of the corporation who also