Case Summary (G.R. No. 113032)
Criminal Proceedings
On March 13, 1991 petitioners filed charges of falsification of a public document (Art. 171, RPC) and estafa (Art. 315(1)(b), RPC) against the Salas respondents, alleging false recitation of the resolution date in the 1985–1986 income statement submitted to the SEC and unauthorized disbursement of corporate funds.
Trial and Civil Aspect Ruling
The RTC consolidated both charges, acquitting the respondents on September 6, 1993. The court found no civil liability and denied petitioners’ motion for reconsideration on November 23, 1993. Petitioners then elevated the civil aspect by certiorari to the Supreme Court.
Issues on Appeal
- Whether the granting of compensation violated Corporation Code Sec. 30.
- Whether petitioners’ appeal can be treated as a derivative suit to annul the resolution.
- Whether the Supreme Court may impose civil liability after acquittal.
Corporation Code Sec. 30 and Compensation Capacity
Section 30 prohibits director compensation “as such directors” absent a by-law provision or majority stockholder vote, capped at 10% of net income. The Court held that Section 30’s proscription applies only to services rendered in the capacity of director/trustee. Compensation for corporate officers performing administrative functions is distinct and authorized by the articles of incorporation and by-laws, thus not barred.
Nature of the Action and Appropriate Forum
A derivative suit under P.D. 902-A Sec. 5(b) must be filed with the SEC, not in a regular court, and must allege a derivative cause for and on behalf of the corporation. Petitioners’ appeal on the civil aspect of a criminal case is no substitute for a derivative suit and improperly short-circuits the exclusive SEC jurisdiction over intra-corporate disputes.
Trial Court’s Factual Findings
The RTC found the complete March 30, 1986 minutes included the resolution, refuting claims of falsification. It also noted that both the articles and by-laws authorized the board to fix officer compensation. There was
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Facts
- Western Institute of Technology, Inc. (WIT) is a stock corporation operating an educational institution, with private respondents as majority and controlling members of its Board of Trustees.
- On May 24, 1986, notices were distributed calling a Special Board meeting on June 1, 1986, including Agenda Item No. 6: “Possible implementation of Art. III, Sec. 6 of the Amended By-Laws of WIT on compensation of all officers of the corporation.”
- At that meeting, the Board unanimously passed Resolution No. 48, s. 1986, granting monthly compensation retroactive to June 1, 1985: P9,000 for the Chairman; P3,500 each for the Vice-Chairman, Treasurer, and Secretary; plus ten percent of net profits equally among the ten trustees.
- The minutes certified by Corporate Secretary Antonio S. Salas erroneously referred to a “regular meeting of March 30, 1986” as the date of passage.
Procedural History
- On March 13, 1991, minority stockholders (petitioners) filed an affidavit-complaint before the City Prosecutor of Iloilo, resulting in two informations:
- Falsification of a public document (Art. 171, RPC) allegedly for submitting an SEC income statement showing Resolution No. 48 passed on March 30, 1986 instead of June 1, 1986.
- Estafa (Art. 315(1)(b), RPC) for disbursing P186,470.70 as retroactive salaries and P19,500 monthly thereafter, over P1,453,970.79 in total, despite objec