#21

PNOC-Energy Development Corporation vs National Labor Relations

Commission
201 SCRA 487
In June 1985, Danilo Mercado was dismissed by PNOC-Energy Development
Corporation (PNOC-EDC) due to serious acts of dishonesty allegedly committed by
Mercado. Mercado then filed a complaint for illegal dismissal against PNOC-EDC.
PNOC-EDC filed a motion to dismiss on the ground that the Labor arbiter and/or
the National Labor Relations Commission (NLRC) has no jurisdiction over PNOC-
EDC because it is a subsidiary of the Philippine National Oil Company (PNOC), a
government owned or controlled corporation, and as a subsidiary, it is also a
GOCC and as such, the proper forum for Mercados suit is the Civil Service
Commission.
ISSUE: Whether or not PBOC-EDC is correct.
HELD: No. The issue in this case has been decided already in the case of PNOC-
EDC vs Leogardo. It is true that PNOC is a GOCC and that PNOC-EDC, being a
subsidiary of PNOC, is likewise a GOCC. It is also true that under the 1973
Constitution, all GOCCs are under the jurisdiction of the CSC. However, the 1987
Constitution change all this as it now provides:
The Civil Service embraces all branches, subdivisions, instrumentalities and
agencies of the Government, including government-owned or controlled
corporations with original charters. (Article IX-B, Section 2 [1]) [emphasis
supplied]
Hence, the above provision sets the rule that the mere fact that a corporation is a
GOCC does not automatically place it under the CSC. Under this provision, the test
in determining whether a GOCC is subject to the Civil Service Law is the manner
of its creation such that government corporations created by special charter are
subject to its provisions while those incorporated under the general Corporation
Law are not within its coverage.
In the case at bar, PNOC-EDC, even though it is a GOCC, was incorporated under
the general Corporation Law it does not have its own charter, hence, it is under
the jurisdiction of the MOLE.
Even though the facts of this case occurred while the 1973 Constitution was still in
force, the provisions of the 1987 Constitution regarding the legal matters
[procedural aspect] are applicable because it is the law in force at the time of the
decision.
#22

Baltazar Camporedondo vs National Labor Relations Commission

312 SCRA 47
Baltazar Camporedondo was the administrator of the Surigao del Norte chapter of
the Philippine National Red Cross (PNRC). In 1995, a PNRC auditor found out that
Baltazar had unremitted collections amounting to P109,000.00. Baltazar, unable
to restitute said missing amount, then filed for early retirement. He later filed a
complaint for illegal dismissal against PNRC. He filed the case with the National
Labor Relations Commission (NLRC). He averred that he was forced to retire
because of the erroneous audit. The Labor Arbiter, affirmed by the NLRC, ruled
that it has no jurisdiction over the case because PNRC is a government owned and
controlled corporation (GOCC). Baltazar however argues that PNRC impliedly
became a private corporation when its charter was amended to give it authority
to secure loans, etc.
ISSUE: Whether or not the Philippine National Red Cross is a private corporation.
HELD: No. The simple test is to find out whether or not a corporation is public or
private is to determine if it has its own charter for the exercise of a public function
or was it incorporated under the general corporation law. PNRC has its own
charter (R.A. 95). Its subsequent amendment did not convert it into a private
corporation. As a GOCC, it is subject to its own charter and its employees are
under the jurisdiction of the Civil Service Commission, and are compulsory
members of the Government Service Insurance System.

#51

GR. No. L-48928 February 25, 1982

MITA PARDO DE TAVERA, plaintiff-appellant,
vs.
PHILIPPINE TUBERCULOSIS SOCIETY, INC., FRANCISCO ORTIGAS, JR.,
MIGUEL CAIZARES, BERNARDO P. PARDO, RALPH NUBLA, MIDPANTAO
ADIL, ENRIQUE GARCIA, ALBERTO G. ROMULO and THE PRESENT BOARD
OF DIRECTORS, PHILIPPINE TUBERCULOSIS SOCIETY, INC., defendants-
appellees.
On March 23, 1976, plaintiff-appellant Mita Pardo de Tavera filed with the Court of
First Instance of Rizal a complaint against the Philippine Tuberculosis Society, Inc.
(hereinafter referred to as the Society), Miguel Canizares, Ralph Nubla, Bernardo
Pardo, Enrique Garcia, Midpantao Adil, Alberto Romulo, and the present Board of
Directors of the Philippine Tuberculosis Society, Inc.
On April 12, 1976, plaintiff-appellant filed an amended complaint impleading
Francisco Ortigas, Jr. as party defendant.
In substance, the complaint alleged that plaintiff is a doctor of Medicine by
profession and a recognized specialist in the treatment of tuberculosis, having
been in the continuous practice of her profession since 1945; that she is a
member of the Board of Directors of the defendant Society, in representation of
the Philippine Charity Sweepstakes Office; that she was duly appointed on April
27, 1973 as Executive Secretary of the Society; that on May 29, 1974, the past
Board of Directors removed her summarily from her position, the lawful cause of
which she was not informed, through the simple expedient of declaring her
position vacant; that immediately thereafter, defendant Alberto Romulo was
appointed to the position by an affirmative vote of seven directors, with two
abstentions and one objection; and that defendants Pardo, Nubla, Garcia and Adil,
not being members of defendant Society when they were elevated to the position
of members of the Board of Directors, are not qualified to be elected as such and
hence, all their acts in said meeting of May 29, 1974 are null and void.
The coturt a quo rendered a decision holding that plaintiff was not illegally
rendered or used from her position as Executive Secretary in The Society since
plaintiff as holding an appointment all the pleasure of the appointing power and
hence her appointment in essence was temporary in nature, terminable at a
moment's notice without need to show that the termination was for cause; and
Chat plaintiff's ouster from office may not be challenged on the ground that the
acts of defendants Pardo, Adil, Nubla and Garcia are null and void, they being not
qualified to be elected members of the Board of Directors because the
qualifications of the members of the Board of Directors which removed plaintiff
from office may not be the subject of a collateral attack in the present suit for quo
warranto affecting title to the office of Executive Secretary.

Issue:
Whether or not the lower court erred in not upholding the Society's By-Laws, the
applicable laws, and the pertinent provisions of the Constitution.
Ruling:
Petitioner cannot seek relief from the general provisions of the New Civil Code on
Human Relations nor from the fundamental principles of the New Constitution on
preservation of human dignity. While these provisions present some basic
principles that are to be observed for the rightful relationship between human
beings and the stability of social order, these are merely guides for human
conduct in the absence of specific legal provisions and definite contractual
stipulations. In the case at bar, the Code of By-Laws of the Society contains a
specific provision governing the term of office of petitioner. The same necessarily
limits her rights under the New Civil Code and the New Constitution upon
acceptance of the appointment.
Moreover, the act of the Board in declaring her position as vacant is not only in
accordance with the Code of By-Laws of the Society but also meets the exacting
standards of honesty and good faith. The meeting of May 29, 1974, at which
petitioner ,petitioner's position was declared vacant, was caged specifically to
take up the unfinished business of the Reorganizational Meeting of the Board of
April 30, 1974. Hence, and act cannot be said to impart a dishonest purpose or
some moral obliquity and conscious doing to wrong but rather emanates from the
desire of the Board to reorganize itself.

#74
Enrique Salafranca vs Philamlife (Pamplona) Village Homeowners
Association, Inc.
300 SCRA 469
In 1981, Enrique Salafranca was hired as an administrative officer by the
Philamlife Village Homeowners Associaiton, Inc. (PVHAI). Salafranca was tasked to
manage the villages day to day activities. His employment was originally for 6
months only but his contract was renewed multiple times until 1983. But even
after 1983, he was still allowed to continue work even without a renewed
contract. In 1987, PVHAI amended its by-laws. Among the amendment was a
provision that the administrative officer (Salafranca) shall have a tenure which is
co-terminus with the Board of Directors which appointed him. In 1992, the tenure
of said Board of Directors expired and so Salafranca was terminated.
ISSUE: Whether or not Salafranca was illegally dismissed.
HELD: Yes. At that time, Salafranca already enjoys security of tenure because he
is already a regular employee. It is true that PVHAI has the right to amend its by-
laws but such amendment must not impair existing contracts or rights. In this
case, the provision that Salafrancas position shall be co-terminus with the
appointing Board impairs his right to security of tenure which has already vested
even prior to the amendment of the by-laws in 1987.

#95

Philippine Long Distance Telephone Company (PLDT) vs. National

Telecommunications Commission (NTC),
G.R. 152685, December 4, 2007

Facts: This case pertains to Section 40 (e) of the Public Service Act (PSA), as
amended on March 15, 1984, pursuant to Batas Pambansa Blg. 325, which
authorized the NTC to collect from publictelecommunications companies
Supervision and Regulation Fees (SRF) of PhP 0.50 for every PhP 100 or a fraction
of the capital andstock subscribed or paid for of a stock corporation, partnership
or single proprietorship of the capital invested, or of the property and equipment,
whichever is higher.

PLDT wanted the July 28, 1999 Decision in G.R. No. 127937 clarified. It posited
that the SRF should be based on the par value in consonance with our holding in
Philippine Long Distance Telephone Company v. Public Service Commission, and
that the premiums on issued shares should not be included in the valuation of the
outstanding capital stock. Through the November 15, 1999 Resolution in G.R. No.
127937, we elucidated that the July 28, 1999 decision was not in conflict with the
ruling in Philippine Long Distance Telephone Company since it never enunciated in
the said case that the phrase capital stock subscribed or paid must be
determined at par value. It is reiterated that the term capital stocksubscribed or
paid is the amount that the corporation receives, inclusive of the premiums, if
any, in consideration of the originalissuance of the shares.

PLDT now contends that the disposition in G.R. No. 127937

excluded stock dividends from the SRF coverage, while the NTC asserts the
contrary. Also, PLDT questions the assessments for violating the disposition in G.R.
No. 127937 since theseassessments were identical to the
previous assessments from 1988 which were questioned by PLDT in G.R. No.
127937 for being based on the market value of its outstanding capital stock.

Issue: Whether or not the appellate court erred in holding that theassessments of
the NTC were contrary to our Decision in G.R. No. 127937 entitled NTC v.
Honorable Court of Appeals
Held: No. The term capital and other terms used to describe thecapital
structure of a corporation are of universal acceptance and their usages have long
been established in jurisprudence. The capital subscribed is the total amount of
the capital that subscribers or shareholders have agreed to take and pay for,
which need not necessarily by, and can be more than, the par value of the shares.
In fine, it is the amount that the corporation receives, inclusive of the premiums if
any, in consideration of the original issuance of the shares. In the case
of stock dividends, it is the amount that the corporation transfers from its surplus
profit account to its capital account. It is the same amount that can be loosely
termed as the trust fund of the corporation. The Trust Fund doctrine considers
this subscribed capital as a trust fund for the payment of the debts of the
corporation, to which the creditors may look for satisfaction. Until the liquidation
of the corporation, no part of the subscribed capital may be returned or released
to the stockholder without violating this principle. Thus, dividends must never
impair the subscribed capital; subscription commitments cannot be condoned or
remitted; nor can the corporation buy its own shares using the subscribed capital
as the considerations therefore.