G.R. No. 89070 May 18, 1992
BENGUET ELECTRIC COOPERATIVE, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PETER COSALAN and BOARD OF DIRECTORS OF BENGUET ELECTRIC COOPERATIVE, INC., respondents.

FACTS

Private respondent Peter Cosalan was the General Manager of petitioner Benguet Electric Cooperative, Inc. (Beneco), elected by its Board of Directors with the approval of the National Electrification Administrator. In November 1982, Cosalan received Audit Memoranda from the Commission on Audit (COA) noting irregularities, including unapproved write-offs of cash advances and inconsistencies in per diems and allowances of board members, and recommending remedial measures. An Audit Report dated May 19, 1983, further noted irregularities in the use of NEA funds. Cosalan initiated implementation of the COA’s recommended measures. In response, the respondent Board members adopted resolutions from June to July 1984 abolishing Cosalan’s housing allowance, reducing his salary and allowances, directing him to hold personnel disciplinary actions in abeyance, and removing him as a principal signatory. From July to September 1984, the Board adopted further resolutions terminating Cosalan’s services subject to NEA approval, suspending him indefinitely, withholding his monies, and confirming his preventive suspension. Cosalan continued to work, believing only NEA could suspend or remove him, and requested his compensation, which was denied. He filed a complaint with the NLRC challenging the legality of his suspension and termination and demanding payment of salaries and allowances. The Labor Arbiter ordered his reinstatement and awarded backwages, allowances, moral damages, and attorney’s fees, holding Beneco and the Board members jointly and severally liable. The Board members appealed to the NLRC. Beneco, under a new set of directors, did not appeal but moved to dismiss the Board’s appeal and for execution. The NLRC modified the decision, holding Beneco alone liable for backwages and allowances and removing the award for moral damages and attorney’s fees. Beneco filed the present Petition for Certiorari.

ISSUE

1. Whether the NLRC acted with grave abuse of discretion in giving due course to the respondent Board members’ appeal filed out of time.
2. Whether the NLRC acted with grave abuse of discretion in holding petitioner Beneco alone liable for payment of backwages and allowances and releasing the respondent Board members from liability.

RULING

1. Yes, the NLRC acted with grave abuse of discretion in giving due course to the appeal. The respondent Board members received the Labor Arbiter’s decision on April 21, 1988, and had until May 2, 1988 (May 1 being a holiday) to perfect their appeal. Their memorandum on appeal was posted by registered mail on May 3, 1988, and received by the NLRC the next day, thus filed out of time. Their contention that it was delivered to a private letter carrier on May 1, 1988, is unavailing, as transmission through a private carrier is not a recognized mode of filing pleadings; the date of actual receipt by the court is deemed the date of filing. The ten-day reglementary period for appeal is mandatory and jurisdictional; failure to comply renders the decision final and executory. The NLRC should have dismissed the appeal. Moreover, the appeal was bereft of merit, as Cosalan’s suspension and termination were illegal: his preventive suspension exceeded the 30-day maximum, he was denied procedural due process, no lawful cause for dismissal was shown, and the Board failed to secure prior NEA approval as required.
2. Yes, the NLRC acted with grave abuse of discretion in releasing the respondent Board members from liability. The NLRC erred in holding that the Board members acted only in their official capacity and thus only Beneco should bear responsibility. Under Section 31 of the Corporation Code, directors or officers who willfully and knowingly vote for or assent to patently unlawful acts are liable jointly and severally for damages. The respondent Board members, by adopting resolutions that illegally suspended and terminated Cosalan without due process and without NEA approval, acted in a manner contrary to law, morals, and public policy. Their actions were not in the exercise of corporate functions but were patently unlawful. Therefore, they should be held solidarily liable with Beneco for the backwages and allowances awarded to Cosalan. The Labor Arbiter’s decision imposing joint and several liability on Beneco and the Board members is reinstated.