Facts:

The case involves Ernesto M. Apodaca as the petitioner against the National Labor Relations Commission (NLRC), Jose M. Mirasol, and Intrans Phils., Inc. as the respondents. The decision in question was handed down by the Supreme Court on April 18, 1989, following a series of events that began on August 28, 1985. On this date, Jose M. Mirasol convinced Apodaca to subscribe to 1,500 shares of the respondent corporation at P100.00 per share, totaling P150,000.00, of which Apodaca made an initial payment of P37,500.00. Apodaca was subsequently appointed as the President and General Manager of Intrans Phils., Inc. on September 1, 1975, but he resigned on January 2, 1986.

Following his resignation, Apodaca filed a complaint with the NLRC on December 19, 1986, asserting his entitlement to unpaid wages, a cost of living allowance, reimbursement for gasoline and representation expenses, and his bonus for 1986. During the proceedings, the private respondents admitted that P17,060.07 was

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Facts:

Employment and Subscription Arrangement

• Petitioner was an employee of the respondent corporation.
• On August 28, 1985, respondent Jose M. Mirasol persuaded petitioner to subscribe to 1,500 shares of the corporation at P100.00 per share, amounting to a total subscription of P150,000.00.
• Petitioner made an initial payment of P37,500.00 toward the subscription.

Appointment, Resignation, and Corporate Position

• On September 1, 1975, petitioner was appointed as President and General Manager of the respondent corporation.
• Petitioner resigned from his position on January 2, 1986.

The Labor Dispute and Alleged Wage Claims

• On December 19, 1986, petitioner initiated a complaint with the National Labor Relations Commission (NLRC) alleging non-payment for:
• Unpaid wages.
• Cost of living allowance.
• Balance of gasoline and representation expenses.
• Bonus compensation for the year 1986.
• In their respective position papers, private respondents acknowledged that petitioner was due P17,060.07.
• The private respondents applied the amount due against the unpaid balance of petitioner’s stock subscription, which amounted to P95,439.93.

Proceedings before the Labor Arbiter and NLRC

• The labor arbiter, in a decision dated April 28, 1987, ruled in favor of petitioner, stating that wages already earned under Article 103 of the Labor Code should not be withheld by the employer.
• Private respondents appealed the decision, and the NLRC reversed the labor arbiter’s ruling in its decision dated September 18, 1987.

NLRC’s Rationale on the Set-Off

• The NLRC held that:
• A stockholder who fails to pay his subscription on call effectively becomes a debtor of the corporation.
• The set-off of the unpaid stock subscription obligation against the wages and other benefits due to petitioner was not contrary to law, morals, or public policy.

Petitioner’s Contentions

• Jurisdiction:
• Petitioner argued that the NLRC lacked jurisdiction over an intra-corporate dispute involving unpaid stock subscriptions, which are within the exclusive purview of the Securities and Exchange Commission (SEC).
• Payment of Subscriptions:
• Petitioner contended that the unpaid subscription amounts were not yet due and payable because there had been no formal call for payment or board resolution authorizing such call.
• Legality of the Set-Off:
• Even if a call for payment had been made, petitioner asserted that applying the set-off against his earned wages was impermissible under Article 113 of the Labor Code, which strictly regulates deductions from wages.

Legal References and Evidentiary Considerations

• The NLRC decision and petitioner’s arguments referred to:
• Section 5 of Presidential Decree No. 902-A regarding the jurisdiction of the NLRC.
• Section 67 of the Corporation Code of the Philippines concerning the enforceability of unpaid stock subscriptions.
• Article 113 of the Labor Code, which delineates the permissible instances for deductions from wages.
• There was no evidence of a proper notice or formal board resolution calling for the payment of the unpaid stock subscriptions.

Issue:

Jurisdiction of the NLRC

• Does the NLRC have jurisdiction to resolve a claim arising from non-payment of stock subscriptions, given that such issues fall within the intra-corporate sphere normally governed by the SEC?

Legality of the Set-Off Against Wages

• Assuming the NLRC had jurisdiction, can an obligation arising from unpaid stock subscriptions be validly offset against money claims of an employee (i.e., wages and other benefits)?
• Is the set-off proper in the absence of a formal call or board resolution mandating payment of the unpaid subscription?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)