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[G.R. No. 88943. May 21, 1990.]


Augusto S. Sanchez & Associates, for Petitioners.

Angara, Abello, Concepcion, Regala & Cruz for respondent Procter & Gamble Philippines Manufacturing Corporation.


1. SECURITIES AND EXCHANGE COMMISSION (P.D. 902-A); VESTED WITH POWER TO ISSUE PRELIMINARY OR PERMANENT INJUNCTION; REASON THEREFOR. — The dispute between petitioner Vicmar Development Corporation and Vicente Angliongto on the one hand and private respondent Rufino Nasser on the other, for the exclusive control and management of petitioner Corporation, triggered off the filing of SEC Case No. 2490, an intracorporate controversy over which the Securities and Exchange Commission has original and exclusive jurisdiction under Presidential Decree No. 902-A. In order to effectively exercise such jurisdiction, the SEC possesses, inter alia, the power to issue preliminary or permanent injunction, whether prohibitory or mandatory in accordance with the pertinent provisions of the Rules of Court (Section 6-a, P.D. 902-A). At times referred to as the "Strong Arm of Equity", the writ of preliminary injunction whether prohibitory or mandatory, is sought for the protection of the rights of a party before the final determination of his rights vis-a-vis others’ in a pending case before the court. It will issue only upon a showing that there exists a clear and present right to be protected and that the facts upon which the writ is to be directed are violative of said right (Roxas, Inc., Et. Al. v. Intermediate Appellate Court, G.R. No. 67195; Roxas, Inc. v. Gonzales, G.R. No. 78618; Roxas, Inc. v. Bautista, G.R. No. 78619-20, May 20, 1989).

2. ID.; ID.; RECALL OF ORDER; JUSTIFIED IN CASE AT BAR. — The facts reveal that the writ of preliminary injunction issued on September 19, 1983 enjoined private respondent Nasser from acting as, and/or representing himself to be, the Executive Vice-President and/or General Manager and/or officer in any capacity of petitioner Corporation. Upon presentment of the Agreement dated November 10, 1983 showing a transfer of ownership, control and management of Vicmar Corporation by Vicente Angliongto unto Nasser, the SEC correctly recalled the order of March 5, 1986 directing the implementation of the aforesaid writ, pending hearing on the motion dated March 17, 1986. To allow execution of the writ of preliminary injunction in favor of the petitioners despite having transferred their rights of ownership, control and management over said corporation to respondent Nasser would be baseless, the contract having shown prima facie that the latter is entitled to remain as Vice-President and General Manager of petitioner Corporation. Thus, no grave abuse of discretion can be attributed to the SEC in recalling the order to enforce a writ of preliminary injunction in this wise. After all, the issuance or recall of preliminary writ of injunction is an interlocutory matter that remains at all times within the control of the court (Alvaro v. Zapata, 118 SCRA 728 [1982]). The grant or denial of an injunction rests upon the sound discretion of the lower tribunal, in the exercise of which the Supreme Court will not interfere except in a clear case of abuse (Sales v. Securities and Exchange Commission, G.R. No. 54330, January 13, 1989).

3. REMEDIAL LAW; CERTIORARI; ABUSE OF DISCRETION AS A GROUND TO WARRANT ISSUANCE THEREOF; CONSTRUED. — The only question involved in certiorari is jurisdiction, either the want or excess thereof Abuse of discretion warrants the issuance of the extraordinary remedy of certiorari only when the same is so grave, as when the power is exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal hostility, and it must be so patent and so gross as to amount to an evasion of positive duty, or to a virtual refusal to perform a duty enjoined, or to act at all, in contemplation of law, as to be equivalent to having acted without jurisdiction (Pure Foods Corporation v. National Labor Relations Commission, G.R. No. 78591, March 21, 1989).

4. COMMERCIAL LAW; CORPORATION; DETERMINATION OF RIGHT OF OWNERSHIP, CONTROL AND MANAGEMENT THEREOF; CONSIDERED INTRA-CORPORATE CONTROVERSY; PROPER FORUM. — The determination as to who between the parties has the exclusive right of ownership, control and management of petitioner corporation under the Agreement of November 10, 1983 vests with the SEC, as the issue involves an intracorporate controversy which calls for the jurisdiction of the Securities and Exchange Commission, that is, "one which arises between the stockholder and the corporation." "There is no distinction, qualification, or any exemption whatsoever" (Sales v. Securities and Exchange Commission, supra).

5. CIVIL LAW; ESTOPPEL BY LACHES; APPLICABLE IN CASE AT BAR. — The fact that the petitioners only filed their petition for certiorari to annul the order of March 18, 1986 on December 3, 1986, that is, after the lapse of almost nine (9) months and after having formally offered their evidence before the SEC. Indeed, petitioners are estopped from contesting said orders. Estoppel by laches arises from negligence or omission to assert a right within a reasonable time (Cimfranca v. Intermediate Appellate Court, 147 SCRA 611 [1987]) and after having submitted to the jurisdiction of the tribunal (Meram v. Edralin, 154 SCRA 238 [1987]).



The issue raised by the petition in this case is whether, in view of the employer’s failure to file a supersedeas bond, the petitioners-workers are entitled to execution pending appeal of the Labor Arbiter’s decision ordering their reinstatement in the company.

The petitioners were regular and permanent employees of Procter and Gamble Philippines, which is engaged in the manufacture of soap, toothpaste, and other household products.chanrobles.com.ph : virtual law library

In 1982, Procter & Gamble-PMC formulated a Special Early Retirement Program (SERP) and a Special Separation Package (SSP), for its employees, as an economic recessionary measure to trim its existing organization, maintain the company’s business viability, and ensure its competitiveness through increased productivity (p. 63, Rollo).

On October 7, 1982, the Union President, Ricardo Q. Estonilo, wrote a letter to the company, requesting management to dialogue with the Union concerning the company’s move to implement the SSP and SERP programs. In the later part of 1982 through 1984, on the ground of redundancy, the company terminated the services of many employees, including the ten original complainants, giving them SSP and SERP benefits which they accepted.

However, problems arose because after dismissing the petitioners, the company allegedly later hired new employees at lower rates of pay, in violation of the petitioners’ right to security of tenure. On September 22, 1986, four years after they had received their special retirement benefits, petitioners filed a complaint for illegal dismissal and asked for reinstatement with backwages and other benefits, as well as damages and attorney’s fees (NLRC Case No. 9-3763-86).

On October 27, 1986, one hundred forty (140) "retired" workers joined as additional complainants. On July 11, 1988, these additional complainants filed a Special Power of Attorney dated September 17, 1986, authorizing the ten (10) above-named petitioners to represent them in the case. The company questioned such authorization.

In its answer, respondent contended that complainants have no cause of action against it considering that the redundancy program was justified under the facts and the law; that the claim or demand set forth in the complaint has been paid, waived, abandoned or otherwise extinguished; and that the respondent exercised due diligence and care and acted with due regard for all circumstances.

On December 15, 1988, Labor Arbiter Felipe Pati rendered judgment for the complainants and against the respondent company —

"1. Declaring respondent Procter & Gamble-PMC to have terminated the employment of complainants without just and valid cause and, consequently it is hereby directed to reinstate complainants to their former positions, without loss of seniority rights and other privileges appertaining thereto, as well as to pay them full backwages and other benefits computed and adjusted at applicable rates of pay, from the dates they were retrenched up to the date of actual reinstatement. From the total backwages and accompanying benefits, however, shall be deducted the separation benefits received by complainants proportionately;"

2. Ordering respondents to pay attorney’s fees in the sum equivalent to ten per cent (10%) of the total amount due the complainants; and"

3. Dismissing complainants’ claim for damages for insufficiency of evidence." (pp. 43-44, Rollo.).

On January 6, 1989, the company appealed to the NLRC.

On January 26, 1989, petitioners asked for immediate execution of the decision pending appeal because the company had not filed an appeal bond. On January 30, 1989, the petitioners also filed a motion for computation of the amounts due them under the Labor Arbiter’s decision. The motion was opposed by the company.

On April 11, 1989, they filed a motion for execution, and on April 17, 1989, a supplementary motion for execution.chanroblesvirtualawlibrary

On June 7, 1989, the NLRC denied the motion for execution. Petitioners’ motion for reconsideration was also denied.

Hence this petition for certiorari.

Book V, Rule XVI, Section 11, Omnibus Rules Implementing the Labor Code, provides:jgc:chanrobles.com.ph

"Sec. 11. Appeal fee and bond — The interested party appealing any decision, order or award of the lower body or agency shall pay a filing fee of twenty-five pesos (P25.00) with the body or agency of origin except deadlock in negotiation cases wherein the minimum appeal fee shall be P50.00.

To stay the execution of the decision, order or award, the appealing party shall post an appeal bond to be determined and approved by the Commissioner or Labor Arbiter, Med-Arbiter, Regional Director, or Director of the Bureau of origin, as the case may be." (Emphasis supplied)

The petitioners’ interpretation of the second paragraph of Section 11 is that unless the appealing party posts an appeal bond, the execution of the appealed decision shall follow as a matter of course.

The NLRC, on the other hand, contends that since it denied petitioners’ motion for execution pending appeal, the appellant need not file an appeal bond to stay execution of the appealed decision for the simple reason that there is no order of execution to be stayed.

"There appears to be a wrong notion on the applicability of the 2nd paragraph, supra [of Section 11]. We cannot share the movant’s posture that under the quoted 2nd paragraph herein appellants are required to file an appeal bond to be determined by the Commission to perfect their appeal and 60 for failure to comply, the decision of the Labor Arbiter of December 15, 1988 became final and executory. The arguments of the movants appear misplaced. The cited paragraph indubitably refers to stay of execution of an order, decision or award not to perfection of an appeal.

"Rule VIII of the Revised Rules of the NLRC speaks of the payment of an appeal fee not an appeal bond. Rule XI, execution, of the NLRC Revised Rules directs the filing of a supersedeas bond to stay execution in specified cases. One is not to be confounded with the other." (pp 20-21, Rollo.)

The NLRC’S interpretation of paragraph 2, Section 11 of the Omnibus Rules is correct. It accords with Art. 223 of the Labor Code which provides:jgc:chanrobles.com.ph

"Art. 223. Appeal — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:jgc:chanrobles.com.ph

"(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

"(b) If the decision, order or award was secured through fraud or coercion, including graft and corruption;

"(c) If made purely on questions of law; and

"(d) If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant."cralaw virtua1aw library

A sensu contrario, decisions, awards, or orders of the labor arbiter that have been appealed to the Commission on time are not yet final and executory.

The decision of the Labor Arbiter in this case was rendered on December 18, 1988, or three (3) months before Article 223 of the Labor Code was amended by Republic Act 6715 (which became law on March 21, 1989), providing that a decision of the Labor Arbiter ordering the reinstatement of a dismissed or separated employee shall be immediately executory insofar as the reinstatement aspect is concerned, and the posting of an appeal bond by the employer shall not stay such execution. Since this new law contains no provision giving it retroactive effect (Art. 4, Civil Code), the amendment may not be applied to this case.chanrobles.com:cralaw:red

WHEREFORE, finding no grave abuse of discretion in the resolution of the NLRC denying the petitioners’ motion for immediate execution of the appealed decision of the Labor Arbiter in NLRC Case No. 9-3763-86, the petition for certiorari is dismissed, with costs against the petitioners.


Narvasa, Cruz and Medialdea, JJ., concur.

Gancayco, J., is on leave.

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