FIRST DIVISION

[G.R. No. 144767. March 21, 2002.]

DILY DANY NACPIL , petitioner, vs . INTERNATIONAL BROADCASTING

CORPORATION , respondent.

Cruz Enverga & Lucero for petitioner.

The Government Corporate Counsel for respondent.

SYNOPSIS

Petitioner was the Assistant General Manager for Finance/Administration and

Comptroller of private respondent Intercontinental Broadcasting Corporation (IBC). Upon
his assumption of the IBC Presidency, Emiliano Templo allegedly harassed and pressured
petitioner into resigning until the latter was forced to retire. However, Templo refused to
pay him his retirement bene ts and refused to recognize petitioner's employment. Hence,
petitioner led with the Labor Arbiter a complaint for illegal dismissal and non-payment of
bene ts. The Labor Arbiter ruled in favor of petitioner. IBC appealed to the NLRC, but the
same was dismissed. IBC then led with the Court of Appeals a petition for certiorari
under Rule 65, which petition was granted by the appellate court and the decisions of the
Labor Arbiter and the NLRC were reversed and set aside. Petitioner then led this instant
petition.
In a rming the decision of the Court of Appeals, the Supreme Court ruled that the
Labor Arbiter had no jurisdiction over the case for illegal dismissal and non-payment of
bene ts led by petitioner. As petitioner's appointment as comptroller required the
approval and formal action of the IBC's Board of Directors to become valid, it is clear,
therefore, that petitioner is a corporate o cer whose dismissal may be the subject of a
controversy cognizable by the SEC under Section 5(c) of P.D. 902-A which includes
controversies involving both election and appointment of corporate directors, trustees,
o cers, and managers. Had petitioner been an ordinary employee, such board action
would not have been required. The Court has consistently held that where there is a nding
that any decision was rendered without jurisdiction, the action shall be dismissed. Such
defense can be interposed at any time, during appeal or even after final judgment.
It must be noted that under Section 5.2 of the Securities Regulation Code (Republic
Act No. 8799) which was signed into law on July 19, 2002, the SEC's jurisdiction over all
cases enumerated in Section 5 of P.D. 902-A has been transferred to the Regional Trial
Courts.

SYLLABUS

1. COMMERCIAL LAW; CORPORATION LAW; SECURITIES AND EXCHANGE

COMMISSION; JURISDICTION; HOW DETERMINED. — The Court has consistently held that
there are two elements to be considered in determining whether the SEC has jurisdiction
over the controversy, to wit: (1) the status or relationship of the parties; and (2) the nature
of the question that is the subject of their controversy. CHcETA

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 2. ID.; ID.; PRIVATE CORPORATIONS; BY-LAWS; MAY AUTHORIZE THE BOARD
OF DIRECTORS TO APPOINT SUCH OTHER OFFICERS AS MAY BE NECESSARY. — The
Court has held that in most cases the "by-laws may and usually do provide for such other
o cers," and that where a corporate o ce is not speci cally indicated in the roster of
corporate o ces in the by-laws of a corporation, the board of directors may also be
empowered under the by-laws to create additional officers as may be necessary.
3. ID.; ID.; SECURITIES AND EXCHANGE COMMISSION; HAS JURISDICTION
OVER CONTROVERSIES INVOLVING BOTH THE ELECTION AND APPOINTMENT OF
CORPORATE DIRECTORS, TRUSTEES, OFFICERS, AND MANAGERS; CASE AT BAR. — As
petitioner's appointment as comptroller required the approval and formal action of the
IBC's Board of Directors to become valid, it is clear therefore holds that petitioner is a
corporate o cer whose dismissal may be the subject of a controversy cognizable by the
SEC under Section 5(c) of P.D. 902-A which includes controversies involving both election
and appointment of corporate directors, trustees, o cers, and managers. Had petitioner
been an ordinary employee, such board action would not have been required.
4. REMEDIAL LAW; COURTS; JURISDICTION; CONFERRED ONLY BY THE
CONSTITUTION OR BY LAW. — The Court has consistently held that where there is a
nding that any decision was rendered without jurisdiction, the action shall be dismissed.
Such defense can be interposed at any time, during appeal or even after nal judgment. It
is a well-settled rule that jurisdiction is conferred only by the Constitution or by law. It
cannot be xed by the will of the parties; it cannot be acquired through, enlarged or
diminished by, any act or omission of the parties.

DECISION

KAPUNAN , J : p

This is a petition for review on certiorari under Rule 45, assailing the Decision of the
Court of Appeals dated November 23, 1999 in CA-G.R. SP No. 52755 1 and the Resolution
dated August 31, 2000 denying petitioner Dily Dany Nacpil's motion for reconsideration.
The Court of Appeals reversed the decisions promulgated by the Labor Arbiter and the
National Labor Relations Commission (NLRC), which consistently ruled in favor of
petitioner.
Petitioner states that he was Assistant General Manager for Finance/Administration
and Comptroller of private respondent Intercontinental Broadcasting Corporation (IBC)
from 1996 until April 1997. According to petitioner, when Emiliano Templo was appointed
to replace IBC President Tomas Gomez III sometime in March 1997, the former told the
Board of Directors that as soon as he assumes the IBC presidency, he would terminate the
services of petitioner. Apparently, Templo blamed petitioner, along with a certain Mr.
Basilio and Mr. Gomez, for the prior mismanagement of IBC. Upon his assumption of the
IBC presidency, Templo allegedly harassed, insulted, humiliated and pressured petitioner
into resigning until the latter was forced to retire. However, Templo refused to pay him his
retirement bene ts, allegedly because he had not yet secured the clearances from the
Presidential Commission on Good Government and the Commission on Audit.
Furthermore, Templo allegedly refused to recognize petitioner's employment, claiming that
petitioner was not the Assistant General Manager/Comptroller of IBC but merely usurped
the powers of the Comptroller. Hence, in 1997, petitioner led with the Labor Arbiter a
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 complaint for illegal dismissal and non-payment of benefits.
Instead of ling its position paper, IBC led a motion to dismiss alleging that the
Labor Arbiter had no jurisdiction over the case. IBC contended that petitioner was a
corporate o cer who was duly elected by the Board of Directors of IBC; hence, the case
qualities as an intra-corporate dispute falling within the jurisdiction of the Securities and
Exchange Commission (SEC). However, the motion was denied by the Labor Arbiter in an
Order dated April 22, 1998. 2
On August 21, 1998, the Labor Arbiter rendered a Decision stating that petitioner
had been illegally dismissed. The dispositive portion thereof reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in
favor of the complainant and against all the respondents, jointly and severally,
ordering the latter:

1. To reinstate complainant to his former position without diminution of

salary or loss of seniority rights, and with full backwages computed from
the time of his illegal dismissal on May 16, 1997 up to the time of his
actual reinstatement which is tentatively computed as of the date of this
decision on August 21, 1998 in the amount of P1,231,750.00 (i.e.,
P75,000.00 a month x 15.16 months = P1,137,000.00 plus 13th month pay
equivalent to 1/12 of P1,137,000.00 = P94,750.00 or the total amount of
P1,231,750.00). Should complainant be not reinstated within ten (10) days
from receipt of this decision, he shall be entitled to additional backwages
until actually reinstated.
2. Likewise, to pay complainant the following:

a) P2 Million as and for moral damages;

b) P500,000.00 as and for exemplary damages; plus and (sic)

c) Ten (10%) percent thereof as and for attorney's fees.

SO ORDERED. 3

IBC appealed to the NLRC, but the same was dismissed in a Resolution dated March
2, 1999, for its failure to le the required appeal bond in accordance with Article 223 of the
Labor Code. 4 IBC then led a motion for reconsideration that was likewise denied in a
Resolution dated April 26, 1999. 5
IBC then led with the Court of Appeals a petition for certiorari under Rule 65, which
petition was granted by the appellate court in its Decision dated November 23, 1999. The
dispositive portion of said decision states:
WHEREFORE, premises considered, the petition for Certiorari is GRANTED.
The assailed decisions of the Labor Arbiter and the NLRC are REVERSED and SET
ASIDE and the complaint is DISMISSED without prejudice.

SO ORDERED. 6

Petitioner then led a motion for reconsideration, which was denied by the appellate
court in a Resolution dated August 31, 2000.
Hence, this petition.

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 Petitioner Nacpil submits that:
I.
THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER WAS
APPOINTED BY RESPONDENT'S BOARD OF DIRECTORS AS COMPTROLLER.
THIS FINDING IS CONTRARY TO THE COMMON, CONSISTENT POSITION AND
ADMISSION OF BOTH PARTIES. FURTHER, RESPONDENT'S BY-LAWS DOES NOT
INCLUDE COMPTROLLER AS ONE OF ITS CORPORATE OFFICERS.

II.
THE COURT OF APPEALS WENT BEYOND THE ISSUE OF THE CASE WHEN
IT SUBSTITUTED THE NATIONAL LABOR RELATIONS COMMISSION'S DECISION
TO APPLY THE APPEAL BOND REQUIREMENT STRICTLY IN THE INSTANT CASE.
THE ONLY ISSUE FOR ITS DETERMINATION IS WHETHER NLRC COMMITTED
GRAVE ABUSE OF DISCRETION IN DOING THE SAME. 7

The issue to be resolved is whether the Labor Arbiter had jurisdiction over the case
for illegal dismissal and non-payment of bene ts led by petitioner. The Court nds that
the Labor Arbiter had no jurisdiction over the same.
Under Presidential Decree No. 902-A (the Revised Securities Act), the law in force
when the complaint for illegal dismissal was instituted by petitioner in 1997, the following
cases fall under the exclusive of the SEC:
a) Devices or schemes employed by or any acts of the board of directors,
business associates, its o cers or partners, amounting to fraud and
misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, members of associations or
organizations registered with the Commission;
b) Controversies arising out of intra-corporate or partnership relations,
between and among stockholders, members or associates; between any or
all of them and the corporation, partnership or association of which they
are stockholders, members or associates, respectively; and between such
corporation, partnership or association and the State insofar as it concerns
their individual franchise or right to exist as such entity;

c) Controversies in the election or appointment of directors, trustees, o cers,

or managers of such corporations, partnerships or associations;
d) Petitions of corporations, partnerships, or associations to be declared in
the state of suspension of payments in cases where the corporation,
partnership or association possesses property to cover all of its debts but
foresees the impossibility of meeting them when they respectively fall due
or in cases where the corporation, partnership or association has no
su cient assets to cover its liabilities, but is under the Management
Committee created pursuant to this decree. (Emphasis supplied.)

The Court has consistently held that there are two elements to be considered in
determining whether the SEC has jurisdiction over the controversy, to wit: (1) the status or
relationship of the parties; and (2) the nature of the question that is the subject of their
controversy. 8
Petitioner argues that he is not a corporate o cer of the IBC but an employee
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 thereof since he had not been elected nor appointed as Comptroller and Assistant
Manager by the IBC's Board of Directors. He points out that he had actually been
appointed as such on January 11, 1995 by the IBC's General Manager, Ceferino Basilio. In
support of his argument, petitioner underscores the fact that the IBC's By-Laws does not
even include the position of comptroller in its roster of corporate o cers. 9 He therefore
contends that his dismissal is a controversy falling within the jurisdiction of the labor
courts. 10
Petitioner's argument is untenable. Even assuming that he was in fact appointed by
the General Manager, such appointment was subsequently approved by the Board of
Directors of the IBC. 11 That the position of Comptroller is not expressly mentioned among
the o cers of the IBC in the By-Laws is of no moment, because the IBC's Board of
Directors is empowered under Section 25 of the Corporation Code 12 and under the
corporation's By-Laws to appoint such other o cers as it may deem necessary. The By-
Laws of the IBC categorically provides:
XII. OFFICERS
The o cers of the corporation shall consist of a President, a Vice-
President, a Secretary-Treasurer, a General Manager, and such other o cers as
the Board of Directors may from time to time does t to provide for. Said o cers
shall be elected by majority vote of the Board of Directors and shall have such
powers and duties as shall hereinafter provide (Emphasis supplied). 13

The Court has held that in most cases the "by-laws may and usually do provide for
such other officers," 14 and that where a corporate o ce is not speci cally indicated in the
roster of corporate o ces in the by-laws of a corporation, the board of directors may also
be empowered under the by-laws to create additional officers as may be necessary. 15
An "o ce" has been de ned as a creation of the charter of a corporation, while an
"o cer" as a person elected by the directors or stockholders. On the other hand, an
"employee" occupies no o ce and is generally employed not by action of the directors and
stockholders but by the managing o cer of the corporation who also determines the
compensation to be paid to such employee. 16
As petitioner's appointment as comptroller required the approval and formal action
of the IBC's Board of Directors to become valid, 17 it is clear therefore holds that petitioner
is a corporate o cer whose dismissal may be the subject of a controversy cognizable by
the SEC under Section 5(c) of P.D. 902-A which includes controversies involving both
election and appointment of corporate directors, trustees, o cers, and managers. 18 Had
petitioner been an ordinary employee, such board action would not have been required.
Thus, the Court of Appeals correctly held that:
Since complainant's appointment was approved unanimously by the
Board of Directors of the corporation, he is therefore considered a corporate
o cer and his claim of illegal dismissal is a controversy that falls under the
jurisdiction of the SEC as contemplated by Section 5 of P.D. 902-A. The rule is
that dismissal or non-appointment of a corporate o cer is clearly an intra-
corporate matter and jurisdiction over the case properly belongs to the SEC, not to
the NLRC. 19

As to petitioner's argument that the nature of his functions is recommendatory

thereby making him a mere managerial o cer, the Court has previously held that the
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 relationship of a person to a corporation, whether as o cer or agent or employee is not
determined by the nature of the services performed, but instead by the incidents of the
relationship as they actually exist. 20
It is likewise of no consequence that petitioner's complaint for illegal dismissal
includes money claims, for such claims are actually part of the perquisites of his position
in, and therefore linked with his relations with, the corporation. The inclusion of such
money claims does not convert the issue into a simple labor problem. Clearly, the issues
raised by petitioner against the IBC are matters that come within the area of corporate
affairs and management, and constitute a corporate controversy in contemplation of the
Corporation Code. 21
Petitioner further argues that the IBC failed to perfect its appeal from the Labor
Arbiter's Decision for its non-payment of the appeal bond as required under Article 223 of
the Labor Code, since compliance with the requirement of posting of a cash or surety bond
in an amount equivalent to the monetary award in the judgment appealed from has been
held to be both mandatory and jurisdictional. 22 Hence, the Decision of the Labor Arbiter
had long become nal and executory and thus, the Court of Appeals acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in giving due course to the
IBC's petition for certiorari, and in deciding the case on the merits.
The IBC's failure to post an appeal bond within the period mandated under Article
223 of the Labor Code has been rendered immaterial by the fact that the Labor Arbiter did
not have jurisdiction over the case since as stated earlier, the same is in the nature of an
intra-corporate controversy. The Court has consistently held that where there is a nding
that any decision was rendered without jurisdiction, the action shall be dismissed. Such
defense can be interposed at any time, during appeal or even after nal judgment. 23 It is a
well-settled rule that jurisdiction is conferred only by the Constitution or by law. It cannot
be xed by the will of the parties; it cannot be acquired through, enlarged or diminished by,
any act or omission of the parties. 24
Considering the foregoing, the Court holds that no error was committed by the
Court of Appeals in dismissing the case led before the Labor Arbiter, without prejudice to
the filing of an appropriate action in the proper court.
It must be noted that under Section 5.2 of the Securities Regulation Code (Republic
Act No. 8799) which was signed into law by then President Joseph Ejercito Estrada on
July 19, 2000, the SEC's jurisdiction over all cases enumerated in Section 5 of P.D. 902-A
has been transferred to the Regional Trial Courts. 25
WHEREFORE, the petition is hereby DISMISSED and the Decision of the Court of
Appeals in CA-G.R. SP No. 52755 is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J. and Ynares-Santiago, JJ., concur.
Puno, J., is on official leave.

Footnotes
1. Intercontinental Broadcasting Corporation, Petitioner, vs . National Labor Relations
Commission and Dily Daly Nacpil, Respondents.
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 2. Rollo, p. 28.
3. Decision of the Labor Arbiter in Case No. NLRC-NCR 00-05-03798-97, Id., at 56-57.
4. Resolution of the National Labor Relations Commission, Second Division, dated March 2,
1999, Id., at 64-69.
5. Id., at 29.
6. Id., at 32.
7. Id., at 14.
8. Saura vs. Saura, Jr., 313 SCRA 465 (1999); Lozano vs. De los Santos, 274 SCRA 452
(1997).
9. Petition, Rollo, p. 14.

10. Id., at 14-17.

11. See Minutes of the Annual Stockholders' Meeting of the IBC on January 17, 1997, Id., at
108.

12. Section 25 of the Corporation Code explicitly states:

SECTION 25. Corporate o cers, quorum. — Immediately after their election, the
directors of a corporation must formally 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 o cers as may be provided for
in the by-laws . . .
13. Rollo, p. 117.
14. Union Motors vs. NLRC, 314 SCRA 531, 539 (1999).
15. Tabang vs. NLRC, 266 SCRA 462 (1997).
16. Ibid.
17. See Article XII of the By-laws of IBC, supra Note 13.
18. Ongkingco vs. NLRC, 270 SCRA 613 (1997).
19. Rollo, p. 31.
20. Fortune Cement Corporation vs. NLRC, 193 SCRA 258 (1991).
21 Cagayan de Oro Coliseum, Inc. vs. Office of the MOLE, 192 SCRA 315 (1990).
22. Petition, Rollo, pp. 18-22.
23. Union Motors Corporation vs. NLRC, supra.
24. Tolentino vs. Court of Appeals, 280 SCRA 226 (1997).
25. Section 5.2 of the Securities Regulation Code provides:
The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential
Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the
appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its
authority may designate the Regional Trial Court branches that shall exercise jurisdiction
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 over the cases. The Commission shall retain jurisdiction over pending cases involving
intra-corporate disputes submitted for nal resolution which should be resolved within
one (1) year from the enactment of this Code. The Commission shall retain jurisdiction
over pending suspension of payments/rehabilitation cases led as of 30 June 2000
until finally disposed. (Emphasis supplied.)

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