WUP vs. MAGLAYA, SR.

WESLEYAN UNIVERSITY-PHILIPPINES vs. GUILLERMO T. MAGLAYA, SR.

G.R. No. 212774

January 23, 2017

“For this Court's resolution is a petition for review on certiorari filed by petitioner Wesleyan University-Philippines (WUP) assailing the Resolution1 dated January 20, 2014 of the Court of Appeals (CA) which denied its petition for certiorari.”

FACTS:

WUP is a non-stock, non-profit, non-sectarian educational corporation duly organized and existing under the Philippine laws. Respondent Atty. Guillermo T. Maglaya, Sr. was appointed as a corporate member and was elected as a member of the Board of Trustees, both for a period of five (5) years. He was elected as President of the University for a five-year term. He was re-elected as a trustee. 

In a Memorandum, the incumbent Bishops of the United Methodist Church apprised all the corporate members of the expiration of their tenns 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.

Dr. Dominador Cabasal, Chairman of the Board, informed the Bishops of the cessation of corporate terms of some of the members and/or trustees since the by-laws provided that the vacancy shall only be filled by the Bishops upon the recommendation of the Board. Maglaya learned that the Bishops created an Ad Hoc Committee to plan the efficient and orderly turnover of the administration of the WUP in view of the alleged "gentleman's agreement", and that the Bishops have appointed the incoming corporate members and trustees. He clarified that there was no agreement and any discussion of the turnover because the corporate members still have valid and existing corporate terms. 

In this case, the Bishops, through a formal notice to all the officers, deans, staff, and employees of WUP, introduced the new corporate members, trustees, and officers. In the said notice, it was indicated that the new Board met, organized, and elected the new set of officers. Manuel Palomo, the new Chairman of the Board, informed Maglaya of the termination of his services and authority as the President of the University.

Thereafter, Maglaya and other fonner members of the Board filed a Complaint for Injunction and Damages before the Regional Trial Court of Cabanatuan City.The RTC dismissed the case declaring the same as a nuisance or harassment suit prohibited under Section l(b), Rule 1 of the Interim Rules for Intra-Corporate Controversies. The RTC observed that it is clear from the by-laws of WUP that insofar as membership in the corporation is concerned, which can only be given by the College of Bishops of the United Methodist Church, it is a precondition to a seat in the WUP Board. Consequently, the expiration of the terms of the plaintiffs, including Maglaya, as corporate members carried with it their termination as members of the Board. Moreover, their continued stay in their office beyond their terms was only in hold-over capacities, which ceased when the Bishops appointed new members of the corporation and the Board. 

The CA affirmed the decision of the RTC, and dismissed the petition for certiorari filed by the plaintiffs for being the improper remedy. 

Thereafter, Maglaya filed the present illegal dismissal case against WUP, Palomo, Bishop Lito C. Tangonan and Bishop Leo A. Soriano. He claimed that he was unceremoniously dismissed in a wanton, reckless, oppressive and malevolent manner.

The Labor Arbiter ruled in favor of WUP. The LA held that the action between employers and employees where the employer-employee relationship is merely incidental is within the exclusive and original jurisdiction of the regular courts. 

The National Labor Relations Commission reversed and set aside the Decision of the LA ruling that the illegal dismissal case falls within the jurisdiction of the labor tribunals. Since the reasons for his termination cited by WUP were not among the just causes provided under Article 282 (now Article 297) of the Labor Code, Maglaya was illegally dismissed.

Thereafter, the NLRC denied the motion for reconsideration filed by WUP and the CA dismissed the petition for certiorari filed by WUP. The CA noted that the decision and resolution of the NLRC became final and executor.

ISSUE:

The Court of Appeals committed an error of law when it summarily dismissed the special civil action for certiorari raising lack of jurisdiction of the NLRC filed by [WUP] where it was very clear that the NLRC had no jurisdiction over the case involving a corporate officer and where the nature of the controversy is an intra-corporate dispute.

RULING:

The Court find the instant petition impressed with merit.

WUP alleges that while the NLRC decision became final and executory, it did not mean that the said decision had become immutable and unalterable as the CA ruled. WUP maintains that the remedy of the aggrieved party against a final and executory decision of the NLRC is the filing of the petition for certiorari under Rule 65 of the Rules of Court. As such, it was able to meet the conditions set forth in filing the said remedy before the CA.

"Corporate officers" in the context of Presidential Decree No. 902- A are those officers of the corporation who are given that character by the Corporation Code or by the corporation's by-laws. There are three specific officers whom a corporation must have under Section 25 of the Corporation Code. These are the president, secretary and the treasurer. The number of officers is not limited to these three. A corporation may have such other officers as may be provided for by its by-laws like, but not limited to, the vice-president, cashier, auditor or general manager. The number of corporate officers is thus limited by law and by the corporation's by-laws. 

Since this Court is now reversing the challenged decision of the CA and affirming the decision of the LA in dismissing the case for want of jurisdiction, Maglaya is not entitled to collect the amount of ₱2,505,208.75 awarded from the time the NLRC decision became final and executory up to the time the CA dismissed WUP's petition for certiorari.

In sum, this Court finds that the NLRC erred in assuming jurisdiction over, and thereafter in failing to dismiss, Maglaya's complaint for illegal dismissal against WUP, since the subject matter of the instant case is an intra-corporate controversy which the NLRC has no jurisdiction.