Cacho vs. Balagtas, 855 SCRA 11, February 07, 2018

3/21/23, 7:29 PM SUPREME COURT REPORTS ANNOTATED 855

G.R. No. 202974. February 7, 2018.*

NORMA D. CACHO and NORTH STAR
INTERNATIONAL TRAVEL, INC., petitioners, vs.
VIRGINIA D. BALAGTAS, respondent.
Mercantile Law; Corporations; Intra-Corporate Controversies;

A two (2)-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.—At the
onset, We agree with the appellate court’s ruling that 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. This is
consistent with the Court’s rulings in Reyes v. Regional Trial
Court of Makati, Branch 142, 561 SCRA 593 (2008), Speed
Distributing Corporation v. Court of Appeals, 425 SCRA 691
(2004), and Real v. Sangu Philippines, Inc., 640 SCRA 67 (2011).
Same; Same; Same; Relationship 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.—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
members, or officers; (c) between the corporation, partnership, or
association and the State as far as its franchise, permit or license
https://www.central.com.ph/sfsreader/session/0000018703f3abca290e8048000d00d40059004a/t/?o=False 1/29
to operate is concerned; and (d) among the stockholders, partners,

or associates themselves.
_______________
* FIRST DIVISION.

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12 SUPREME COURT REPORTS ANNOTATED

Cacho vs. Balagtas
Same; Same; Corporate Officers; One shall be considered a

corporate officer only if two (2) conditions are met, viz.: (1) the
position occupied was created by charter/bylaws, and (2) the officer
was elected (or appointed) by the corporation’s board of directors to
occupy said position.—In Easycall Communications Phils., Inc. v.
King, 478 SCRA 102 (2005), the Court ruled that a corporate
office is created by the charter of the corporation and the officer
is elected thereto by the directors or stockholders. In other
words, one shall be considered a corporate officer only if two
conditions are met, viz.: (1) the position occupied was created by
charter/bylaws, and (2) the officer was elected (or appointed)
by the corporation’s board of directors to occupy said
position.
Same; Same; Corporate Office; The Supreme Court (SC) has
ruled that if the position is other than the corporate president,
treasurer, or secretary, it must be expressly mentioned in the
bylaws in order to be considered as a corporate office.—The rule is
that corporate officers are those officers of a corporation who are
given that character either by the Corporation Code or by the
corporation’s bylaws. Section 25 of the Corporation Code
explicitly provides for the election of the corporation’s president,
treasurer, secretary, and such other officers as may be
provided for in the bylaws. 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 in order to be considered as a
corporate office.
Same; Same; Corporate Officers; 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.—While a
corporate office is created by an express provision either in the
Corporation Code or the Bylaws, 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.
Same; Same; General Information Sheet; The General
Information Sheet (GIS) neither governs nor establishes whether
or not a position is an ordinary or corporate office.—The GIS
neither governs nor establishes whether or not a position
is an ordinary

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Cacho vs. Balagtas
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.
Same; Same; Intra-Corporate Controversies; Under the nature
of the controversy test, the disagreement 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.—The existence
of an intra-corporate controversy does not wholly rely on the
relationship of the parties. The incidents of their relationship
must also be considered. Thus, under the nature of the controversy
test, the disagreement 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. If the relationship and its
incidents are merely incidental to the controversy or if there will
still be conflict even if the relationship does not exist, then no
intra-corporate controversy exists. Verily, in a long line of cases,
the Court consistently ruled that a corporate officer’s dismissal is
always a corporate act, or an intra-corporate controversy which
arises between a stockholder and a corporation. However, a closer
look at these cases will reveal that the intra-corporate nature of
the disputes therein did not hinge solely on the fact that the
subject of the dismissal was a corporate officer.
Same; Same; Same; Dismissal of Corporate Officers; 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 dismissals in these cases were all
considered intra-corporate controversies not only because the
complainants were corporate officers, but also, and more
importantly, because they were not reelected to their respective
corporate offices and, thus, terminated from the corporation. “The
matter of whom to elect is a prerogative that belongs to the Board,
and involves the exercise of deliberate choice and the faculty of
discriminative selection. Generally speaking, the relationship of a
person to a corporation, whether as officer or as agent or
employee, is not determined by the nature of

14

Cacho vs. Balagtas
the services performed, but by the incidents of the

relationship as they actually exist.” In other words, the dismissal
must relate to any of the circumstances and incidents
surrounding the parties’ intra-corporate relationship. 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.
Remedial Law; Civil Procedure; Jurisdiction; Estoppel by
Laches; The Supreme Court (SC) has already held that the ruling
in Tijam v. Sibonghanoy, 23 SCRA 29 (1968), remains only as an
exception to the general rule. Estoppel by laches will only bar a
litigant from raising the issue of lack of jurisdiction in exceptional
cases similar to the factual milieu of Tijam v. Sibonghanoy.—
Respondent Balagtas insists that petitioners belatedly raised the
issue of the Labor Arbiter’s lack of jurisdiction before the NLRC.
Relying on Tijam v. Sibonghanoy, 23 SCRA 29 (1968), she avers
that petitioners, after actively participating in the proceedings
before the Labor Arbiter and obtaining an unfavorable judgment,
are barred by laches from attacking the latter’s jurisdiction. We
disagree with respondent Balagtas. The Court has already held
that the ruling in Tijam v. Sibonghanoy remains only as an
exception to the general rule. Estoppel by laches will only bar a
litigant from raising the issue of lack of jurisdiction in exceptional
cases similar to the factual milieu of Tijam v. Sibonghanoy. To
recall, the Court in Tijam v. Sibonghanoy ruled that the plea of
lack of jurisdiction may no longer be raised for being barred by

laches because it was raised for the first time in a motion to
dismiss filed almost 15 years after the questioned ruling
had been rendered. These exceptional circumstances are not
present in this case. Thus, the general rule must apply: that the
issue of jurisdiction may be raised at any stage of the
proceedings, even on appeal, and is not lost by waiver or
by estoppel.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Fortun, Narvasa & Salazar for petitioners.
NBS Law Office for respondent.

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Cacho vs. Balagtas
LEONARDO-DE CASTRO, J.:

Before the Court is a petition for review on certiorari
under Rule 45 of the Rules of Court, as amended, seeking
to reverse and set aside the Decision1 dated November 9,
2011 and Resolution2 dated August 6, 2012 of the Court of
Appeals in C.A.-G.R. S.P. No. 111637, which affirmed the
Labor Arbiter’s Decision3 dated March 28, 2005.
This case stemmed from a Complaint4 for constructive
dismissal filed by respondent Virginia D. Balagtas
(Balagtas) against petitioners North Star International
Travel, Inc. (North Star) and its President Norma D. Cacho
(Cacho) before the Labor Arbiter docketed as NLRC-NCR
Case No. 04-04736-04.
The facts as narrated by the Court of Appeals are as
follows:
In her Position Paper submitted before the Labor

Arbiter, petitioner [Balagtas] alleged that she was a former
employee of respondent TQ3 Travel Solutions/North Star
International Travel, Inc., a corporation duly registered
with the Securities and Exchange Commission (SEC) on
February 12, 1990. She also alleged that she was one of the
original incorporators-directors of the said corporation and,
when it started its operations in 1990, she was the General
Manager and later became the Executive Vice

President/Chief Executive Officer.
On March 19, 2004 or after 14 years of service in the said
corporation, petitioner was placed under 30 days preventive
suspension pursuant to a Board Resolution passed by the
Board of Directors of the respondent Cor-
_______________

1 Rollo, pp. 85-99; penned by Associate Justice Noel G. Tijam (now a
member of this Court), with Associate Justices Marlene Gonzales Sison
and Leoncia R. Dimagiba, concurring.
2 Id., at pp. 102-105.
3 Id., at pp. 264-273.
4 Id., at pp. 217-218.

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Cacho vs. Balagtas
poration due to her alleged questionable transactions. On

March 20, 2004, she was notified by private respondent
Norma Cacho of her suspension and ordered to explain in
writing to the Board of Directors her alleged fraudulent
transactions within 5 days from said notice. Petitioner
promptly heeded the order on March 29, 2004.
On April 5, 2004, while under preventive suspension,
petitioner wrote a letter to private respondent 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 reassuming
her position. Petitioner also wrote a letter dated April 12,
2004 to the Audit Manager inquiring about the status of the
examination of the financial statement of respondent
corporation for the year 2003, which request was, however,
ignored. Consequently, petitioner filed a complaint claiming
that she was constructively and illegally dismissed effective
on April 12, 2004.
In their defense, respondents averred that, on March 19,
2004, the majority of the Board of Directors of respondent
corporation decided to suspend petitioner for 30 days due to
the questionable documents and transactions she entered
into without authority. The preventive suspension was
meant to prevent petitioner 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.
Respondents alleged that petitioner violated her
suspension when, on several occasions, she went to the
respondent corporation’s office and insisted on working
despite respondent Norma Cacho’s protestation.
Respondents also alleged that the complaint for
constructive dismissal was groundless. They asserted that
petitioner was not illegally dismissed but was merely placed
under preventive suspension.5
_______________

5 Id., at pp. 86-88.

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Cacho vs. Balagtas
The Decision of the Labor Arbiter

In his Decision dated March 28, 2005, the Labor Arbiter
found that respondent Balagtas was illegally dismissed
from North Star, viz.:
WHEREFORE, judgment is hereby made finding the

complainant to have been illegally dismissed from
employment on July 15, 2004 and concomitantly ordering
the respondent North Star International Travel, Inc., to pay
her a separation pay computed at thirty (30) days pay for
every year of service with backwages, plus commissions and
such other benefits which she should have received had she
not been dismissed at all.
The respondent North Star International Travel, Inc. is
further ordered to pay complainant three (3) million pesos
as moral damages and two (2) million pesos as exemplary
damages plus ten (10%) percent attorney’s fees.6

Subsequently, petitioners appealed the case to the
National Labor Relations Commission (NLRC). In their
Notice of Appeal,7 they prayed that Balagtas’s Complaint

be dismissed for lack of jurisdiction. While they maintained
that Balagtas was never dismissed, they also alleged that
she was a corporate officer, incorporator, and member of
the North Star’s Board of Directors (The Board). 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.
_______________
6 Id., at p. 273.
7 Through a Notice of Appeal dated May 27, 2005. Id., at pp. 275-287.

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Cacho vs. Balagtas
The Ruling of the NLRC

In its Resolution8 dated September 30, 2008, the NLRC
ruled in favor of petitioners, viz.:

WHEREFORE, the questioned Decision of the Labor

Arbiter is REVERSED and SET ASIDE and the complaint
is DISMISSED for lack of jurisdiction.9

The NLRC’s findings are as follows: First, through a
Board resolution passed on March 31, 2003, Balagtas was
elected as North Star’s Executive Vice President and
Chief Executive Officer, as evidenced by a Secretary’s
Certificate dated April 22, 2003. Second, in her Counter
Affidavit executed sometime in 2004 in relation to the
criminal charges against her, respondent Balagtas had in
fact admitted occupying these positions, apart from being
one of North Star’s incorporators. And, third, the position
of “Vice President” is a corporate office provided in North
Star’s bylaws.10
Based on these findings, the NLRC ruled that
respondent Balagtas was a corporate officer of North
Star at the time of her dismissal and not a mere
employee. A corporate officer’s dismissal is always an
intra-corporate controversy,11 a subject matter falling

within the Regional Trial Court’s (RTC) jurisdiction.12
Thus, the Labor Arbiter and the NLRC do not have
jurisdiction over Balagtas’s Complaint.
The NLRC also held that petitioners North Star and
Cacho were not estopped from raising the issue of
lack of jurisdiction. Citing Dy v. National Labor
Relations Com-
_______________

8 Id., at pp. 294-315.
9 Id., at p. 314.
10 Id., at pp. 307-308.
11 Tabang v. National Labor Relations Commission, 334 Phil. 424,
430; 266 SCRA 462, 465 (1997).
12 Citing Republic Act No. 8799; Rollo, p. 307.

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Cacho vs. Balagtas
mission,13 the NLRC explained that the Labor Arbiter

heard and decided the case upon the theory that he had
jurisdiction over the Complaint. Thus, the Labor Arbiter’s
jurisdiction may be raised as an issue on appeal.
Aggrieved, respondent Balagtas moved for
reconsideration but was denied. Thus, she elevated the
case to the Court of Appeals via a petition for certiorari.

The Ruling of the Court of Appeals

In its assailed Decision, the Court of Appeals found
merit in Balagtas’s petition, viz.:
WHEREFORE, the petition is hereby GRANTED. The

assailed Resolution, dated September 30, 2008 of the
National Labor Relations Commission dismissing the
petitioner’s complaint for lack of jurisdiction, is hereby
REVERSED and SET ASIDE. The Decision, dated March
28, 2005 of the Labor Arbiter is AFFIRMED and this case is
ordered REMANDED to the NLRC for the recomputation of
petitioner’s backwages and attorney’s fees in accordance

with this Decision.14

In ruling that the present case does not involve an intra-
corporate controversy, the Court of Appeals applied a two-
tier test, viz.: (a) the relationship test, and (b) the
nature of controversy test.
Applying the relationship test, the Court of Appeals
explained that no intra-corporate relationship existed
between respondent Balagtas and North Star. While
respondent Balagtas was North Star’s Chief Executive
Officer and Executive Vice President, petitioners North Star
and Cacho failed to establish that occupying these positions
made her a corporate officer. First, respondent Balagtas
held the Chief Executive
_______________
13 229 Phil. 234; 145 SCRA 211 (1986).

14 Rollo, pp. 98-99.

20

Cacho vs. Balagtas
Officer position as a mere corporate title for the purpose

of enlarging North Star’s corporate image. According to
North Star’s bylaws, the company President shall assume
the position of Chief Executive Officer. Thus, respondent
Balagtas was not empowered to exercise the functions of a
corporate officer, which was lawfully delegated to North
Star’s President, petitioner Cacho.15 And, second, petitioner
North Star’s Bylaws only enumerate the position of Vice
President as one of its corporate officers. The NLRC should
not have assumed that the Vice President position is the
same as the Executive Vice President position that
respondent Balagtas admittedly occupied. Following
Matling Industrial and Commercial Corporation v. Coros,16
the appellate court reminded that “a position must be
expressly mentioned in the bylaws in order to be considered
a corporate office.”17
On the other hand, the Court of Appeals elucidated that
based on the allegations in herein respondent Balagtas’s
complaint filed before the Labor Arbiter, the present case

involved labor issues. Thus, even using the nature of
controversy test, it cannot be regarded as an intra-
corporate dispute.18
The subsequent motions for reconsideration were
denied.19
Hence, the present petition.
_______________

15 Id., at pp. 93-94.
16 647 Phil. 324; 633 SCRA 12 (2010).
17 Rollo, p. 95.
18 Id., at pp. 95-96.
19 In a Resolution dated August 6, 2012. Respondent Balagtas filed a
Motion for Partial Reconsideration dated November 28, 2011 to seek
clarification on the Decision’s dispositive portion, more specifically the
payment of her monetary award. On the other hand, petitioners Cacho
and North Star filed a Motion for Reconsideration dated November 29,
2011 and reiterated that the present case involved an intra-corporate
controversy.

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Cacho vs. Balagtas
The Issues

Petitioners North Star and Cacho come before this Court
raising the following issues:
A.
WHETHER RESPONDENT BALAGTAS IS A
CORPORATE OFFICER AS DEFINED BY THE
CORPORATION CODE, CASE LAW, AND NORTH STAR’S
BYLAWS.
B.
WHETHER THE APPELLATE COURT’S DECISION
REVERSING THE NLRC’S FINDING THAT BALAGTAS
WAS A CORPORATE OFFICER FOR WHICH HER
ACTION FOR ILLEGAL DISMISSAL WAS
INAPPROPRIATE FOR IT TO RESOLVE, WAS CORRECT
ESPECIALLY BECAUSE NO DISCUSSION OF THAT
CONCLUSION WAS MADE BY THE APPELLATE COURT

IN ITS DECISION.
C.
WHETHER THE AWARD BY THE APPELLATE COURT
OF SEPARATION PAY, BACKWAGES, DAMAGES, AND
LAWYER’S FEES TO BALAGTAS WAS APPROPRIATE.20

Petitioners Cacho and North Star insist that the present
case’s subject matter is an intra-corporate controversy.
They maintain that respondent Balagtas, as petitioner
North Star’s Executive Vice President and Chief Executive
Officer, was its corporate officer. Particularly, they argue
that: first, under petitioner North Star’s bylaws, vice
presidents are listed as corporate officers. Thus, the NLRC
erred when it differentiated between: (a) “vice president” as
a corporate office provided in petitioner North Star’s
bylaws, and (b) “Executive
_______________
20 Rollo, p. 49.

22

Cacho vs. Balagtas
Vice President,” the position occupied by respondent

Balagtas. Its interpretation unduly supplanted the Board’s
wisdom and authority in handling its corporate affairs. Her
appointment as one of petitioner North Star’s vice
presidents is evidenced by the Secretary’s Certificate
dated April 22, 2003. As held in Mailing, if the position or
office is created by the bylaws and the appointing
authority is the board of directors, then it is a
corporate office. Second, she had already been a corporate
officer of petitioner North Star for quite some time, having
been appointed as General Manager through a Board
Resolution in 1997 and, subsequently, as Executive Vice
President and General Manager in 2001, as evidenced by
the Secretary’s Certificate dated March 23, 2001. And
third, respondent Balagtas has openly admitted her
appointments to these positions. She even acknowledged
being a member of the Board and at the same time
petitioner North Star’s Executive Vice President and

General Manager.21
Considering all these in applying the relationship test,
petitioners Cacho and North Star assert that respondent
Balagtas is not petitioner North Star’s mere employee but a
corporate officer thereof whose dismissal is categorized as
an intra-corporate matter.22
Petitioners Cacho and North Star further cite Espino v.
National Labor Relations Commission23 where the Court
held that a corporate officer’s dismissal is always a
corporate act. It cannot be considered as a simple labor
case. Thus, under the nature of the controversy test,
the present case is an intra-corporate dispute because the
primary subject matter herein is the dismissal of a
corporate officer.
In refuting petitioners Cacho and North Star’s
allegations, respondent Balagtas avers that: first, she was
not a corporate officer of petitioner North Star. The Board
Resolution and
_______________
21 Id., at pp. 54-64.

22 Id., at p. 52.
23 310 Phil. 60, 73; 240 SCRA 52, 62-63 (1995).

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Cacho vs. Balagtas
Secretary’s Certificates that purportedly support

petitioners Cacho and North Star’s claims were falsified,
forged, and invalid. Petitioners Cacho and North Star
failed to show that the Executive Vice President position
she had occupied was a corporate office. Said position was a
mere nomenclature as she was never empowered to
exercise the functions of a corporate officer. In fact, in the
2003 General Information Sheet (GIS) of petitioner North
Star, the field “corporate position” opposite respondent
Balagtas’s name was filled out as “not applicable.” Second,
she was no longer a stockholder and director of petitioner
North Star. Third, she was merely an employee. Petitioner
Cacho was the one who hired her, determined her
compensation, directed and controlled the manner she
performed her work, and ultimately, dismissed her from

employment. Fourth, the issue of whether or not she was a
corporate officer is irrelevant because her claim for
backwages, commissions, and other monies is clearly
categorized as a labor dispute, not an intra-corporate
controversy.24 And fifth, petitioners Cacho and North Star
are already estopped from questioning the jurisdiction of
the Labor Arbiter. They actively participated in the
proceedings before the Labor Arbiter and cannot assail the
validity of such proceedings only after obtaining an
unfavorable judgment.25

The Ruling of the Court

The petition is meritorious.
The sole issue before the Court is 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.
_______________

24 Citing Mainland Construction Co., Inc. v. Movilla, 320 Phil. 353;
250 SCRA 290 (1995).
25 Rollo, pp. 627-642, citing Prudential Bank and Trust Company v.
Reyes, 404 Phil. 961; 352 SCRA 316 (2001).

24

Cacho vs. Balagtas
Respondent Balagtas’s
dismissal is an intra-
corporate controversy

At the onset, We agree with the appellate court’s ruling
that 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. This is consistent with
the Court’s rulings in Reyes v. Regional Trial Court of
Makati, Branch 142,26 Speed Distributing Corporation v.

Court of Appeals,27 and Real v. Sangu Philippines, Inc.28

A. Relationship 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
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.29
In the present case, petitioners Cacho and North Star
allege that respondent Balagtas, as petitioner North Star’s
Executive Vice President, was its corporate officer. On
the other hand, while respondent Balagtas admits to have
occu-
_______________

26 583 Phil. 591; 561 SCRA 593 (2008).
27 469 Phil. 739; 425 SCRA 691 (2004).
28 655 Phil. 68; 640 SCRA 67 (2011).
29 Reyes v. Regional Trial Court of Makati, Br. 142, supra at p. 607; p.
610, citing Union Glass & Container Corporation v. Securities and
Exchange Commission, 211 Phil. 222, 230-231; 126 SCRA 31, 38 (1983).

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Cacho vs. Balagtas
pied said position, she argues she was Executive Vice

President merely by name and she did not discharge any of
the responsibilities lodged in a corporate officer.
Given the parties’ conflicting views, 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.
In Easycall Communications Phils., Inc. v. King,30 the

Court ruled that a corporate office is created by the
charter of the corporation and the officer is elected thereto
by the directors or stockholders. In other words, one shall
be considered a corporate officer only if two conditions are
met, viz.: (1) the position occupied was created by
charter/bylaws, and (2) the officer was elected (or
appointed) by the corporation’s board of directors to
occupy said position.

1. The Executive Vice
President position is
one of the corporate
offices provided in pe-
titioner North Star’s
Bylaws

The rule is that corporate officers are those officers of a
corporation who are given that character either by the
Corporation Code or by the corporation’s bylaws.31
Section 25 of the Corporation Code32 explicitly provides
for the election of the corporation’s president, treasurer,
secre-
_______________
30 514 Phil. 296, 302-303; 478 SCRA 102, 110 (2005), citing Tabang v.
National Labor Relations Commission, supra note 11 at p. 429; p. 467;
Real v. Sangu Philippines, Inc., supra note 28 at pp. 85-86; p. 86.
31 Easycall Communications Phils., Inc. v. King, id., at p. 302; p. 109.
32 SECTION 25. Corporate Officers, Quorum.—Immediately after
their election, the directors of a corporation must formally

26

Cacho vs. Balagtas
tary, and such other officers as may be provided for

in the bylaws. 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 in order to be considered as a
corporate office.33
In this regard, petitioner North Star’s bylaws34 provides

the following:
ARTICLE IV

OFFICERS

Section 1. Election/Appointment.—Immediately after
their election, the Board of Directors shall formally organize
by electing the Chairman, the President, one or more
Vice-President (sic), the Treasurer, and the Secretary, at
said meeting.
The Board may, from time to time, appoint such other
officers as it may determine to be necessary or proper.
Any two (2) or more positions may be held concurrently
by the same person, except that no one shall act as
President and Treasurer or Secretary at the same time.
_______________
organize by the election of a president, who shall be a director, a

treasurer who may or may not be a director, a secretary who shall be a
resident and citizen of the Philippines, and such other officers as may
be provided for in the bylaws. Any two (2) or more positions may be
held concurrently by the same person, except that no one shall act as
president and secretary or as president and treasurer at the same time.
(Corporation Code of the Philippines, Batas Pambansa Blg. 68, [May 1,
1980])
33 Matling Industrial and Commercial Corporation v. Coros, supra
note 16 at pp. 342-34; p. 26.
34 Rollo, pp. 164-181.

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Cacho vs. Balagtas
Clearly, there may be one or more vice president

positions in petitioner North Star and, by virtue of its
bylaws, all such positions shall be corporate offices.
Consequently, the next question that begs to be asked is
whether or not the phrase “one or more vice
president” in the above cited provision of the bylaws
includes the Executive Vice President position held by
respondent Balagtas.
In ruling that respondent Balagtas was not a corporate

officer of petitioner North Star, the Court of Appeals
pointed out that the NLRC should not have assumed that
the “Vice President” position is the same as the “Executive
Vice President” position that Balagtas admittedly occupied.
In other words, that the exact and complete name of
the position must appear in the bylaws, otherwise it is an
ordinary office whose occupant shall be regarded as a
regular employee rather than a corporate officer.
The appellate court’s interpretation of the phrase “one or
more vice president” unduly restricts one of petitioner
North Star’s inherent corporate powers, viz.: to adopt its
own bylaws, provided that it is not contrary to law, morals,
or public policy35 for its internal affairs, to regulate the
conduct and prescribe the rights and duties of its members
towards itself and among themselves in reference to the
management of its affairs.36
The use of the phrase “one or more” in relation to the
establishment of vice president positions without particular
excep-
_______________

35 The Corporation Code provides, “SECTION 36. Corporate Powers
and Capacity.—Every corporation incorporated under this Code has the
power and capacity: x x x 5. To adopt bylaws, not contrary to law, morals,
or public policy, and to amend or repeal the same in accordance with this
Code[.]”
36 Gokongwei, Jr. v. Securities and Exchange Commission, 178 Phil.
266, 296; 89 SCRA 336, 365 (1979), citing Mckee & Company v. First
National Bank of San Diego, 265 F. Supp. 1 (1967).

28

Cacho vs. Balagtas
tion 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 bylaws’ 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. Whether the creation of
several vice president positions in a company is reasonable
is a question of policy that courts of law should not
interfere with. Where the reasonableness of a bylaw is a
mere matter of judgment, and one upon which reasonable
minds must necessarily differ, a court would not be
warranted in substituting its judgment instead of the
judgment of those who are authorized to make bylaws and
who have exercised their authority.37
Thus, by name, the Executive Vice President position is
embraced by the phrase “one or more vice president” in
North Star’s bylaws.

2. Respondent Balag-
tas was appointed by
the Board as peti-
tioner North Star’s
Executive Vice Presi-
dent

While a corporate office is created by an express
provision either in the Corporation Code or the Bylaws,
what makes one a corporate officer is his election or
appointment thereto by the board of directors. Thus,
there must be docu-
_______________
37 Gokongwei, Jr. v. Securities and Exchange Commission, id., at p.

293; pp. 361-362, citing People ex rel. Wildi v. Ittner, 165 III. App. 360, 367
(1911).

29
VOL. 855, FEBRUARY 7, 2018 29

Cacho vs. Balagtas
mentary evidence to prove that the person alleged to be a

corporate officer was appointed by action or with approval
of the board.38
In the present case, 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, which provides:

I, MOLINA A. CABA, of legal age, Filipino citizen,
x x x after being duly sworn to in accordance with
law, depose and state: That —
1. I am the duly appointed Corporate Secretary of
North Star International Travel, Inc. x x x
2. As such Corporate Secretary of the Corporation,
I hereby certify that at the Regular/Special
meeting of the Board of Directors and
Stockholders of the Corporation which was held
on March 31, 2003 during which meeting a
quorum was present and majority of the
stockholders were in attendance, the following
resolutions were unanimously passed and
adopted:
“RESOLVED, AS IT IS HEREBY RESOLVED,
that during a meeting of the Board of
Directors held last March 31, 2003, the
following members of the Board were
elected to the corporate position opposite
their names”:

_______________
38 See Real v. Sangu Philippines, Inc., supra note 28 at p. 87; pp. 85-
86.
39 Rollo, p. 162.

30

Cacho vs. Balagtas
On the other hand, respondent Balagtas assails the

validity of the above cited Secretary’s Certificate for being
forged and fabricated. However, aside from these bare
allegations, the NLRC observed that she did not present
other competent proof to support her claim. To the
contrary, respondent Balagtas even admitted that she was
elected by the Board as petitioner North Star’s Executive
Vice President and argued that she could not be removed as
such without another valid board resolution to that effect.
To support this claim, respondent Balagtas submitted the

very same Secretary’s Certificate as an attachment to her
Position Paper before the Labor Arbiter.40 That she is now
casting doubt over a document she herself has previously
relied on belies her own claim that the Secretary’s
Certificate is a fake.
Thus, 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 determined by
petitioner Cacho as petitioner North Star’s President.
In any case, that the Executive Vice President’s duties
and responsibilities are determined by the President
instead of the Board is irrelevant. In determining whether
a position is a corporate office, the board of directors’
appointment or election thereto is controlling. Article IV,
Section 4 of North Star’s Bylaws provides:
Section 4. The Vice President(s).—If one or more Vice

Presidents are appointed, he/they shall have such powers
and shall perform such duties as may from time to time be
assigned to him/them by the Board of Directors or by
the President. [Emphasis supplied]
_______________
40 Id., at pp. 307-308.

31
VOL. 855, FEBRUARY 7, 2018 31

Cacho vs. Balagtas
When Article IV, Section 4 is read together with Section

1 thereof, it is clear that while petitioner North Star may
have one or more vice presidents and the President is
authorized to determine each one’s scope of work, their
appointment or election still devolves upon the Board.
At this point, it is best to emphasize that the manner of
creation (i.e., under the express provisions of the
Corporation Code or bylaws) and the manner by which it
is filled (i.e., by election or appointment of the board of
directors) are sufficient in vesting a position the character

of a corporate office.
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).
This is of no moment.
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.41
Based on the above discussion, as Executive Vice
President, respondent Balagtas was one of petitioner North
Star’s corporate officers. Thus, there is an intra-corporate
relationship existing between the parties.

B. Nature of the Controversy Test

The existence of an intra-corporate controversy does not
wholly rely on the relationship of the parties. The incidents
of their relationship must also be considered. Thus, under
the
_______________
41 See Cosare v. Broadcom Asia, Inc., 726 Phil. 316; 715 SCRA 534
(2014).

32

Cacho vs. Balagtas
nature of the controversy test, the disagreement 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. If the relationship and
its incidents are merely incidental to the controversy or if
there will still be conflict even if the relationship does not
exist, then no intra-corporate controversy exists.42
Verily, in a long line of cases,43 the Court consistently

ruled that a corporate officer’s dismissal is always a
corporate act, or an intra-corporate controversy which
arises between a stockholder and a corporation. However, a
closer look at these cases will reveal that the intra-
corporate nature of the disputes therein did not hinge
solely on the fact that the subject of the dismissal was a
corporate officer.
In Philippine School of Business Administration v.
Leano,44 the complainant questioned the validity of his
dismissal after his position was declared vacant and he was
not re-elected thereto. The cases of Fortune Cement
Corporation v. National Labor Relations Commission45 and
Locsin v. Nissan Lease Phils., Inc.46 also share similar
factual milieu.
On the other hand, the complainant in Espino v.
National Labor Relations Commission47 also contested the
failure of the
_______________
42 Reyes v. Regional Trial Court of Makati, Br. 142, supra note 26 at p.

608; p. 611.
43 Locsin v. Nissan Lease Phils., Inc., 648 Phil. 596; 634 SCRA 392
(2010), citing Estrada v. National Labor Relations Commission, 331 Phil.
225; 262 SCRA 709 (1996); Lozon v. National Labor Relations
Commission, 310 Phil. 1; 240 SCRA 1 (1995); Espino v. National Labor
Relations Commission, supra note 23; Fortune Cement Corporation v.
NLRC, 271 Phil. 268; 193 SCRA 258 (1991).
44 212 Phil. 717; 127 SCRA 778 (1984).
45 Fortune Cement Corporation v. NLRC, supra.
46 Id.
47 Espino v. National Labor Relations Commission, supra note 23.

33
VOL. 855, FEBRUARY 7, 2018 33

Cacho vs. Balagtas
board of directors to reelect him as a corporate officer. The

Court found that the board of directors deferred his re-
election in light of previous administrative charges filed
against the complainant. Later on, the board of directors
deemed him resigned from service and his position was
subsequently abolished.
Finally, in Pearson and George, (S.E. Asia), Inc. v.

National Labor Relations Commission,48 the complainant
lost his corporate office primarily because he was not re-
elected as a member of the corporation’s board of directors.
The Court found that the corporate office in question
required the occupant to be at the same time a director.
Thus, he should lose his position as a corporate officer
because he ceased to be a director for any reason (e.g., he
was not re-elected as such), such loss is not dismissal but
failure to qualify or to maintain a prerequisite for that
position.
The dismissals in these cases were all considered intra-
corporate controversies not only because the complainants
were corporate officers, but also, and more importantly,
because they were not re-elected to their respective
corporate offices and, thus, terminated from the
corporation. “The matter of whom to elect is a prerogative
that belongs to the Board, and involves the exercise of
deliberate choice and the faculty of discriminative
selection. Generally speaking, the relationship of a person
to a corporation, whether as officer or as agent or employee,
is not determined by the nature of the services performed,
but by the incidents of the relationship as they actually
exist.”49
In other words, the dismissal must relate to any of the
circumstances and incidents surrounding the parties’ intra-
corporate relationship. To be considered an intra-corporate
controversy, the dismissal of a corporate officer must have
_______________
48 323 Phil. 166; 253 SCRA 136 (1996).

49 Phil. School of Business Administration v. Leano, supra note 44.

34

Cacho vs. Balagtas
something to do with the duties and responsibilities

attached to his/her corporate office or performed in his/her
official capacity.50
In respondent Balagtas’s Position Paper filed before the
Labor Arbiter she alleged as follows: (a) petitioner Cacho
informed her, through a letter, that she had been
preventively suspended by the Board; (b) she opposed the

suspension, was unduly prevented from reassuming her
position as Executive Vice President,51 and thereafter
constructively dismissed; (c) the Board did not
authorize either her suspension and removal from
office; and (d) as a result of her illegal dismissal, she is
entitled to separation pay in lieu of her
reinstatement to her previous positions, plus
backwages, allowances, and other benefits.52
The foregoing allegations mainly relate to incidents
involving her capacity as Executive Vice President, a
position above declared as a corporate office, viz.: first,
respondent Balagtas’s claim of dismissal without prior
authority from the Board reveals her understanding that
the appointment and removal of a corporate officer like the
Executive Vice President could only be had through an
official act by the Board. And, second, she sought
separation pay in lieu of reinstatement to her
_______________
50 In Real v. Sangu Philippines, Inc. (supra note 28), the Court ruled,
“As earlier stated, respondents terminated the services of petitioner for
the following reasons: (1) his continuous absences at his post at Ogino
Philippines, Inc.; (2) respondents’ loss of trust and confidence on
petitioner; and, (3) to cut down operational expenses to reduce further
losses being experienced by the corporation. Hence, petitioner filed a
complaint for illegal dismissal and sought reinstatement, backwages,
moral damages and attorney’s fees. From these, it is not difficult to see
that the reasons given by respondents for dismissing petitioner have
something to do with his being a Manager of respondent corporation and
nothing with his being a director or stockholder.”
51 Rollo, pp. 245-247.
52 Id., at pp. 256-257.

35
VOL. 855, FEBRUARY 7, 2018 35

Cacho vs. Balagtas
former positions, one of which was as Executive Vice

President. Even her prayer for full backwages, allowances,
commissions, and other monetary benefits all relate to her
corporate office.53
On the other hand, petitioners Cacho and North Star

terminated respondent Balagtas for the following reasons:
(a) for allegedly appropriating company funds for her
personal gain; (b) for abandonment of work; (c) violation of
a lawful order of the corporation; and (d) loss of trust and
confidence.54 In their Position Paper, petitioners Cacho and
North Star described in detail the latter’s fund
disbursement process,55 emphasizing respondent
Balagtas’s role as the one who approves payment
vouchers and the signatory on issued checks —
responsibilities specifically devolved upon her as the
vice president. And as the vice president, respondent
Balagtas actively participated in the whole process,
if not controlled it altogether. As a result, petitioners
Cacho and North Star accused respondent Balagtas of
gravely abusing the confidence the Board has
reposed in her as vice president and misappropriating
company funds for her own personal gain.
From these, it is clear that 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 in
respondent Balagtas as vice president.
_______________
53 See Espino v. National Labor Relations Commission, supra note 23.

54 Rollo, p. 267.
55 Id., at pp. 228-230.

36

Cacho vs. Balagtas
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.

Petitioners Cacho
and North Star not
estopped from ques-
tioning jurisdiction

Respondent Balagtas insists that petitioners belatedly
raised the issue of the Labor Arbiter’s lack of jurisdiction
before the NLRC. Relying on Tijam v. Sibonghanoy,56 she
avers that petitioners, after actively participating in the
proceedings before the Labor Arbiter and obtaining an
unfavorable judgment, are barred by laches from attacking
the latter’s jurisdiction.
We disagree with respondent Balagtas.
The Court has already held that the ruling in Tijam v.
Sibonghanoy remains only as an exception to the general
rule. Estoppel by laches will only bar a litigant from raising
the issue of lack of jurisdiction in exceptional cases similar
to the factual milieu of Tijam v. Sibonghanoy. To recall, the
Court in Tijam v. Sibonghanoy ruled that the plea of lack
of jurisdiction may no longer be raised for being barred by
laches because it was raised for the first time in a motion to
dismiss filed almost 15 years after the questioned
ruling had been rendered.57
These exceptional circumstances are not present in this
case. Thus, the general rule must apply: that the issue of
jurisdiction may be raised at any stage of the
proceedings, even on appeal, and is not lost by
waiver or by
_______________
56 131 Phil. 556; 23 SCRA 29 (1968).

57 Figueroa v. People, 580 Phil. 58; 558 SCRA 63 (2008).

37
VOL. 855, FEBRUARY 7, 2018 37

Cacho vs. Balagtas
estoppel. In Espino v. National Labor Relations

Commission,58 We ruled:
The principle of estoppel cannot be invoked to prevent this

Court from taking up the question, which has been
apparent on the face of the pleadings since the start of the
litigation before the Labor Arbiter. In the case of Dy v.

NLRC, supra, the Court, citing the case of Calimlim v.
Ramirez, reiterated that the decision of a tribunal not
vested with appropriate jurisdiction is null and void. Again,
the Court in Southeast Asian Fisheries Development Center-
Aquaculture Department v. NLRC restated the rule that
the invocation of estoppel with respect to the issue of
jurisdiction is unavailing because estoppel does not
apply to confer jurisdiction upon a tribunal that has
none over the cause of action. The instant case does not
provide an exception to the said rule.59 (Emphasis supplied)

All told, the issue in the present case is an intra-
corporate controversy, a matter outside the Labor Arbiter’s
jurisdiction.
WHEREFORE, the petition is hereby GRANTED. The
Decision dated November 9, 2011 and Resolution dated
August 6, 2012 of the Court of Appeals in C.A.-G.R. S.P.
No. 111637 are SET ASIDE. NLRC-NCR Case No. 04-
04736-04 is dismissed for lack of jurisdiction, without
prejudice to the filing of an appropriate case before the
proper tribunal.
SO ORDERED.
Sereno (CJ., Chairperson), Del Castillo and Jardeleza,

JJ., concur.
Martires,**J., On Official Leave.
_______________
58 See Espino v. National Labor Relations Commission, supra note 23.

59 Id., at pp. 75-76; pp. 64-65.
* * Designated additional member per Raffle dated January 31, 2018.

38

Cacho vs. Balagtas
Petition granted, judgment and resolution set aside.
By virtue of Republic Act (RA) No. 8799, jurisdiction

over cases enumerated in Section 5 of Presidential Decree
(PD) No. 902-A was transferred from the Securities and
Exchange Commission (SEC) to the Regional Trial Courts
(RTCs), being courts of general jurisdiction. (Gonzales vs.

GJH Land, Inc. [formerly known as S.J. Land, Inc.], 774
SCRA 242 [2015])

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3/21/23, 7:29 PM SUPREME COURT REPORTS ANNOTATED 855

G.R. No. 202974. February 7, 2018.*

Mercantile Law; Corporations; Intra-Corporate Controversies;

to operate is concerned; and (d) among the stockholders, partners,

12 SUPREME COURT REPORTS ANNOTATED

Same; Same; Corporate Officers; One shall be considered a

officer is his election or appointment thereto by the board of

VOL. 855, FEBRUARY 7, 2018 13

or corporate office. At best, if one is listed in the GIS as an

corporate officer must have something to do with the duties and

14 SUPREME COURT REPORTS ANNOTATED

the services performed, but by the incidents of the

lack of jurisdiction may no longer be raised for being barred by

PETITION for review on certiorari of the decision and

VOL. 855, FEBRUARY 7, 2018 15

LEONARDO-DE CASTRO, J.:

In her Position Paper submitted before the Labor

Manager and later became the Executive Vice

16 SUPREME COURT REPORTS ANNOTATED

poration due to her alleged questionable transactions. On

meant to prevent petitioner from influencing potential

VOL. 855, FEBRUARY 7, 2018 17

The Decision of the Labor Arbiter

WHEREFORE, judgment is hereby made finding the

Notice of Appeal,7 they prayed that Balagtas’s Complaint

18 SUPREME COURT REPORTS ANNOTATED

The Ruling of the NLRC

WHEREFORE, the questioned Decision of the Labor

intra-corporate controversy,11 a subject matter falling

VOL. 855, FEBRUARY 7, 2018 19

mission,13 the NLRC explained that the Labor Arbiter

WHEREFORE, the petition is hereby GRANTED. The

petitioner’s backwages and attorney’s fees in accordance

13 229 Phil. 234; 145 SCRA 211 (1986).

20 SUPREME COURT REPORTS ANNOTATED

Officer position as a mere corporate title for the purpose

complaint filed before the Labor Arbiter, the present case

VOL. 855, FEBRUARY 7, 2018 21

CONCLUSION WAS MADE BY THE APPELLATE COURT

22 SUPREME COURT REPORTS ANNOTATED

Vice President,” the position occupied by respondent

petitioner North Star’s Executive Vice President and

21 Id., at pp. 54-64.

VOL. 855, FEBRUARY 7, 2018 23

Secretary’s Certificates that purportedly support

performed her work, and ultimately, dismissed her from

24 SUPREME COURT REPORTS ANNOTATED

Makati, Branch 142,26 Speed Distributing Corporation v.

VOL. 855, FEBRUARY 7, 2018 25

pied said position, she argues she was Executive Vice

In Easycall Communications Phils., Inc. v. King,30 the

26 SUPREME COURT REPORTS ANNOTATED

tary, and such other officers as may be provided for

In this regard, petitioner North Star’s bylaws34 provides

organize by the election of a president, who shall be a director, a

VOL. 855, FEBRUARY 7, 2018 27

Clearly, there may be one or more vice president

In ruling that respondent Balagtas was not a corporate

28 SUPREME COURT REPORTS ANNOTATED