G.R. No. L-27972 - Central Cooperative Exchange, Inc. vs. Tibe Sr.

Central Cooperative Exchange, Inc. (CCE) is the petitioner, a national federation of farmers' cooperative marketing associations (FACOMAS) in which the former ACCFA (now ACA) is its single majority stockholder.
Concordio Tibe, Sr. is the respondent, a former member of the board of directors of CCE, representing FACOMAS in Eastern Visayas.

During his tenure as director (May 23, 1958 to May 26, 1960), respondent Tibe drew and collected cash advances totaling P5,668.00 from CCE.
Out of the total cash advances, Tibe had liquidated P3,317.25, leaving an unliquidated balance of P2,350.75, which was later partially reduced to P2,133.45 as of January 31, 1963 due to subsequent partial payments.
In addition to the cash advances, Tibe also drew sums amounting to P14,436.95 representing commutable per diems, transportation expenses, representation expenses, and discretionary funds. All such disbursements were made with the approval of CCE's general manager, treasurer, and auditor.

CCE’s board of directors passed several resolutions that authorized various compensations and allowances:

Authorized official visitation of FACOMAS subject to board approval, except in cases of urgency.
Provided for a per diem of P10.00 for visitations outside the director’s place of residence.
Approved actual transportation expenses for all board-sanctioned visitations.

Resolution No. 52 (July 8, 1958): Appropriated P10,000.00 as a discretionary fund for the board of directors, disbursable upon authorization by the board chairman without the need for supporting receipts.
Resolution No. 49 (July 10, 1958): Granted a monthly commutable allowance of P200.00 to each director in lieu of the regular transportation expenses and waiting time per diems for meetings held in Manila.
Resolution No. 57 (July 24, 1958): Amended Resolution No. 49 by increasing the commutable transportation allowance by an additional P20.00.
Resolution No. 35 (June 11, 1959): Increased the monthly commutable allowance from P300.00 to P500.00, effective June 1, 1959.
Resolution No. 87 (October 9, 1959): Appropriated an additional P10,000.00 as a commutable discretionary fund for the board.

Section 8 of the By-Laws of the petitioner expressly provided that the determination of compensation and per diems for board members shall be determined by the stockholders at any annual or special meeting called for that purpose.
In the annual stockholders’ meeting held on January 31, 1956, it was resolved that directors were entitled only to “actual transportation expenses plus the per diems of P30.00 and actual expenses while waiting.”
There was a clear conflict between the stockholders’ resolution as set in the By-Laws and the subsequent board resolutions which provided for additional allowances and discretionary funds.

The petitioner filed a complaint seeking the refund of the sums collected by Tibe pursuant to the board resolutions, arguing that such resolutions were beyond the board’s authority as per the By-Laws.
The Court of First Instance of Manila dismissed the complaint after trial, a decision which was later affirmed by the Court of Appeals.
One of the legal defenses raised by the respondent was the doctrine of laches, claiming that delay in filing the suit barred the recovery of the advance funds.

Authority of the Board of Directors versus Reserved Powers of the Stockholders

Whether the board of directors of CCE had the power to adopt the resolutions that appropriated corporate funds for allowances and discretionary payments to its members.
Whether the determination and alteration of director compensation is exclusively a stockholders' prerogative as mandated by Section 8 of the By-Laws.

Whether the various resolutions (Nos. 55, 52, 49, 57, 35, and 87) that provided for additional allowances and discretionary funds violate the constitutional provisions of the By-Laws.
The legitimacy of substituting the explicitly mandated compensation (actual transportation expenses plus per diems of P30.00 and actual waiting expenses) with monthly commutable allowances and discretionary funds.

Whether the claim by the petitioner is barred by the doctrine of laches, given the time lapse between the termination of Tibe’s directorship (May 1960) and the filing of the suit (October 1960).
Whether the inactivity of the corporation in suing its directors contributed to a claim of laches.