G.R. No.

168008, August 17, 2011

PETRONILO J. BARAYUGA vs. ADVENTIST UNIVERSITY OF THE PHILIPPINES,

THROUGH ITS BOARD OF TRUSTEES, REPRESENTED BY ITS CHAIRMAN, NESTOR D.
DAYSON

FACTS:

AUP, a non-stock and non-profit domestic educational institution incorporated under Philippine laws,
was directly under the North Philippine Union Mission (NPUM) of the Southern Asia Pacific
Division of the Seventh Day Adventists. During the 3rd Quinquennial Session of the General Conference
of Seventh Day Adventists, the NPUM Executive Committee elected the members of the Board of
Trustees of AUP, including the Chairman and the Secretary. Respondent Nestor D. Dayson was elected
Chairman while the petitioner was chosen Secretary.

Almost two months following the conclusion of the 3rd Quinquennial Session, the Board of Trustees
appointed the petitioner President of AUP.

During his tenure, a group from the NPUM conducted an external performance audit which revealed
the petitioner’s autocratic management style, like making major decisions without the approval or
recommendation of the proper committees, including the Finance Committee; and that he had
himself done the canvassing and purchasing of materials and made withdrawals and
reimbursements for expenses without valid supporting receipts and without the approval of the
Finance Committee. The audit concluded that he had committed serious violations of fundamental
rules and procedure in the disbursement and use of funds.

In a special meeting, the members, by secret ballot, voted to remove him as President because of his
serious violations of fundamental rules and procedures in the disbursement and use of funds as
revealed by the special audit; to appoint an interim committee consisting of three members to
assume the powers and functions of the President; and to recommend him to the NPUM for
consideration as Associate Director for Secondary Education. The Board of Trustees denied the
petitioner’s request for reconsideration because his reasons were not meritorious.

The petitioner brought his suit for injunction and damages in the RTC, with prayer for the issuance of
a TRO alleging that the Board of Trustees had relieved him as President without valid grounds
despite his five-year term; that the Board of Trustees had thereby acted in bad faith; and that his being
denied ample and reasonable time to present his evidence deprived him of his right to due process.

RTC granted the petitioner’s application for a writ of preliminary injunction. CA nullified the
RTC’s writ of preliminary injunction ruling that the petitioner’s term of office had expired two
years from his appointment, based on AUP’s amended By-Laws; that, consequently, he had been a
mere de facto officer appointed by the members of the Board of Trustees; and that he held no legal
right warranting the issuance of the writ of preliminary injunction.

ISSUE:

Whether the CA correctly ruled that the petitioner had no legal right to the position of President of
AUP that could be protected by the injunctive writ issued by the RTC.
RULING: We deny the petition for review for lack of merit.

The petitioner’s assertion of a five-year duration for his term of office lacked legal basis.

Section 108 of the Corporation Code determines the membership and number of trustees in an
educational corporation, viz:

Section 108. Board of trustees. – Trustees of educational institutions organized as educational

corporations shall not be less than five (5) nor more than fifteen (15): Provided, however, That the
number of trustees shall be in multiples of five (5).

Unless otherwise provided in the articles of incorporation or the by-laws, the board of trustees
of incorporated schools, colleges, or other institutions of learning shall, as soon as organized, so
classify themselves that the term of office of one-fifth (1/5) of their number shall expire every
year. Trustees thereafter elected to fill vacancies, occurring before the expiration of a
particular term, shall hold office only for the unexpired period. Trustees elected thereafter to
fill vacancies caused by expiration of term shall hold office for five (5) years. A majority of the
trustees shall constitute a quorum for the transaction of business. The powers and authority of
trustees shall be defined in the by-laws.

For institutions organized as stock corporations, the number and term of directors shall be governed by the
provisions on stock corporations.

The second paragraph of the provision, although setting the term of the members of the Board of
Trustees at five years, contains a proviso expressly subjecting the duration to what is otherwise
provided in the articles of incorporation or by-laws of the educational corporation. That contrary
provision controls on the term of office.

In AUP’s case, its amended By-Laws provided that the members of the Board of Trustees were to
serve a term of office of only two years; and the officers, who included the President, were to be
elected from among the members of the Board of Trustees during their organizational meeting,
which was held during the election of the Board of Trustees every two years. Naturally, the officers,
including the President, were to exercise the powers vested by Section 2 of the amended By-Laws for a
term of only two years, not five years.

Ineluctably, the petitioner, having assumed as President of AUP on January 23, 2001, could serve for
only two years, or until January 22, 2003. By the time of his removal for cause as President on
January 27, 2003, he was already occupying the office in a hold-over capacity, and could be
removed at any time, without cause, upon the election or appointment of his successor. His insistence
on holding on to the office was untenable, therefore, and with more reason when one considers that his
removal was due to the loss of confidence on the part of the Board of Trustees. The removal of the
petitioner as President of AUP, being made in accordance with the AUP Amended By-Laws, was
valid.
G.R. No. 171905, June 20, 2012

UNITED CHURCH OF CHRIST IN THE PHILIPPINES, INC. vs. BRADFORD UNITED

CHURCH OF CHRIST, INC., PATRIZIO EZRA, GERONIMO V. NAZARETH, RUPERTO
MAYUGA, SR., ROBERT SCHAARE, HENRY CARIAT, REYNALDO FERRENAL AND JOHN
DOES

FACTS:

United Church of Christ in the Philippines, Inc. (UCCP) is a religious corporation duly organized and
existing under the laws of the Philippines. It is a national confederation of incorporated and unincorporated
self-governing Evangelical churches of different denominations, devised for fellowship, mutual counsel
and cooperation. Bradford United Church of Christ, Inc. (BUCCI), is likewise a religious corporation
with a personality separate and distinct from UCCP.

UCCP has 3 governing bodies: the General Assembly, the Conference and the Local Churches.
BUCCI belonged to the Cebu Conference Inc. and enjoyed a peaceful co-existence until late 1989 when
the BUCCI constructed a fence that encroached upon the right of way allocated by the UCCP for
CCI.

The General Assembly attempted to settle the dispute and rendered a decision in favor of CCI. This
triggered a series of events, which further increased enmity and led to the formal break-up of BUCCI
from UCCP. Consequently, BUCCI filed its amended Articles of Incorporation and By-Laws, which
provided for and affected its disaffiliation from UCCP. SEC approved the same. UCCP filed a complaint
before SEC to reject the same but SEC dismissed UCCP's petition.

ISSUE: Whether or not, SEC has the jurisdiction over matters involving UCCP and BUCCI.

RULING: YES.

Being corporate entities and grantees of primary franchises, they are subject to the jurisdiction of the SEC.
Section 3 of Presidential Decree No. 902-A provides that SEC shall have absolute jurisdiction,
supervision and control over all corporations. Even with their religious nature, SEC may exercise
jurisdiction over them in matters that are legal and corporate. Well-settled is the judicial dictum that
factual findings of quasi-judicial agencies, such as SEC, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not only respect but even finality. They
are binding upon this Court which is not a trier of facts. Only upon clear showing of grave abuse of
discretion, or that such factual findings were arrived at arbitrarily or in disregard of the evidence on record
will this Court step in and proceed to make its own independent evaluation of the facts. No cogent reason
exists in the instant cases to deviate from this settled rule.
G.R. No. L-8451, December 20, 1957

THE ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO, INC. vs.

THE LAND REGISTRATION COMMISSION and THE REGISTER OF DEEDS OF DAVAO CITY

Facts:

On October 4, 1954, Mateo L. Rodis, a Filipino citizen and resident of the City of Davao, executed a deed
of sale of a parcel of land located in the same city covered by Transfer Certificate No. 2263, in favor of
the Roman Catholic Apostolic Administrator of Davao Inc.,(RCADI) is corporation sole organized
and existing in accordance with Philippine Laws, with Msgr. Clovis Thibault, a Canadian citizen, as
actual incumbent. Registry of Deeds Davao (RD) required RCADI to submit affidavit declaring that
60% of its members were Filipino Citizens. As the RD entertained some doubts as to the
registerability of the deed of sale, the matter was referred to the Land Registration
Commissioner (LRC) en consulta for resolution. LRC held that pursuant to provisions of sections 1 and
5 of Article XII of the Philippine Constitution, RCADI is not qualified to acquire land in the
Philippines in the absence of proof that at least 60% of the capital, properties or assets of the RCADI
is actually owned or controlled by Filipino citizens. LRC also denied the registration of the Deed of
Sale in the absence of proof of compliance with such requisite. RCADI’s Motion for Reconsideration
was denied. Aggrieved, the latter filed a petition for mandamus.

Issue:

Whether Roman is qualified to acquire private agricultural lands in the Philippines pursuant to the
provisions of Article XIII of the Constitution

Held: YES. Register of Deeds of the City of Davao is ordered to register the deed of sale.

RCADI is qualified.

While it is true and We have to concede that in the profession of their faith, the Roman Pontiff is the
supreme head; that in the religious matters, in the exercise of their belief, the Catholic congregation of the
faithful throughout the world seeks the guidance and direction of their Spiritual Father in the Vatican, yet
it cannot be said that there is a merger of personalities resultant therein. Neither can it be said that the
political and civil rights of the faithful, inherent or acquired under the laws of their country, are affected by
that relationship with the Pope. The fact that the Roman Catholic Church in almost every country springs
from that society that saw its beginning in Europe and the fact that the clergy of this faith derive their
authorities and receive orders from the Holy See do not give or bestow the citizenship of the Pope upon
these branches.

Citizenship is a political right which cannot be acquired by a sort of “radiation”. We have to realize that
although there is a fraternity among all the catholic countries and the dioceses therein all over the globe,
the universality that the word “catholic” implies, merely characterize their faith, a uniformity in the
practice and the interpretation of their dogma and in the exercise of their belief, but certainly they
are separate and independent from one another in jurisdiction, governed by different laws under
which they are incorporated, and entirely independent on the others in the management and ownership of
their temporalities. To allow theory that the Roman Catholic Churches all over the world follow the
citizenship of their Supreme Head, the Pontifical Father, would lead to the absurdity of finding the citizens
of a country who embrace the Catholic faith and become members of that religious society, likewise
citizens of the Vatican or of Italy. And this is more so if We consider that the Pope himself may be an
Italian or national of any other country of the world. The same thing is said with regard to the nationality
or citizenship of the corporation sole created under the laws of the Philippines, which is not altered by the
change of citizenship of the incumbent bishops or head of said corporation sole.

We must therefore, declare that although a branch of the Universal Roman Catholic Apostolic
Church, every Roman Catholic Church in different countries, if it exercises its mission and is
lawfully incorporated in accordance with the laws of the country where it is located, is considered an
entity or person with all the rights and privileges granted to such artificial being under the laws of
that country, separate and distinct from the personality of the Roman Pontiff or the Holy See,
without prejudice to its religious relations with the latter which are governed by the Canon Law or
their rules and regulations.

It has been shown before that: (1) the corporation sole, unlike the ordinary corporations which are formed
by no less than 5 incorporators, is composed of only one persons, usually the head or bishop of the
diocese, a unit which is not subject to expansion for the purpose of determining any percentage
whatsoever; (2) the corporation sole is only the administrator and not the owner of the temporalities
located in the territory comprised by said corporation sole; (3) such temporalities are administered for and
on behalf of the faithful residing in the diocese or territory of the corporation sole; and (4) the latter, as
such, has no nationality and the citizenship of the incumbent Ordinary has nothing to do with the
operation, management or administration of the corporation sole, nor effects the citizenship of the faithful
connected with their respective dioceses or corporation sole.

In view of these peculiarities of the corporation sole, it would seem obvious that when the specific
provision of the Constitution invoked by respondent Commissioner (section 1, Art. XIII), was under
consideration, the framers of the same did not have in mind or overlooked this particular form of
corporation. If this were so, as the facts and circumstances already indicated tend to prove it to be so, then
the inescapable conclusion would be that this requirement of at least 60 per cent of Filipino capital
was never intended to apply to corporations sole, and the existence or not a vested right becomes
unquestionably immaterial.
 G.R. No. 184088, July 6, 2010

IGLESIA EVANGELICA METODISTA EN LAS ISLAS FILIPINAS (IEMELIF) (Corporation

Sole), INC., REV. NESTOR PINEDA, REV. ROBERTO BACANI, BENJAMIN BORLONGAN, JR.,
DANILO SAUR, RICHARD PONTI, ALFREDO MATABANG and all the other members of the
IEMELIF TONDO CONGREGATION of the IEMELIF CORPORATION SOLE vs. BISHOP
NATHANAEL LAZARO, REVERENDS HONORIO RIVERA, DANIEL MADUCDOC, FERDINAND
MERCADO, ARCADIO CABILDO, DOMINGO GONZALES, ARTURO LAPUZ, ADORABLE
MANGALINDAN, DANIEL VICTORIA and DAKILA CRUZ, and LAY LEADER LINGKOD
MADUCDOC and CESAR DOMINGO, acting individually and as members of the Supreme Consistory of
Elders and those claiming under the Corporation Aggregate

Facts:

 In 1909, Bishop Nicolas Zamora established the petitioner Iglesia Evangelica Metodista En Las Islas
Filipinas, Inc. (IEMELIF) as a corporation sole with Bishop Zamora acting as its "General
Superintendent." Thirty-nine years later in 1948, the IEMELIF enacted and registered a by-laws that
established a Supreme Consistory of Elders (the Consistory), made up of church ministers, who were to
serve for four years. For all intents and purposes, the Consistory served as the IEMELIF’s board of
directors.

 Apparently, although the IEMELIF remained a corporation sole on paper (with all corporate powers
theoretically lodged in the hands of one member, the General Superintendent), it had always acted like a
corporation aggregate. The Consistory exercised IEMELIF’s decision-making powers without ever being
challenged. Subsequently, during its 1973 General Conference, the general membership voted to put things
right by changing IEEMMELIF’s organizational structure from a corporation sole to a
corporation aggregate. On May 7, 1973 the SEC approved the vote. For some reasons, however, the
corporate papers of the IEMELIF remained unaltered as a corporation sole. 28 years later, in answer
to a query from IEMELIF the SEC said that the IEMELIF needed to amend its articles of incorporation
for that purpose. Subsequently, the general membership approved the conversion, prompting the
IEMELIF to file amended articles of incorporation with the SEC.

 Petitioner, Rev. Pineda which belonged to a faction that did not support the conversion, filed a civil case.
Petitioners claim that a complete shift from IEMELIF’s status as a corporation sole to a corporation
aggregate required, not just an amendment of the IEMELIF’s articles of incorporation, but a complete
dissolution of the existing corporation sole followed by a re-incorporation. RTC dismissed the petition.
CA affirmed RTC’s decision.

 PINEDA’s CONTENTION: the Corporation Code does not have any provision that allows a corporation
sole to convert into a corporation aggregate by mere amendment of its articles of incorporation; the
 conversion can take place only by first dissolving IEMELIF, the corporation sole, and afterwards by
creating a new corporation in its place.

 RTC’s RULING: while the Corporation Code on Religious Corporations (Chapter II, Title XIII) has no
provision governing the amendment of the articles of incorporation of a corporation sole, its Section 109
provides that religious corporations shall be governed additionally "by the provisions on non-stock
corporations insofar as they may be applicable." The RTC thus held that Section 16 of the Code that
governed amendments of the articles of incorporation of non-stock corporations applied to
corporations sole as well. What IEMELIF needed to authorize the amendment was merely the vote or
written assent of at least two-thirds of the IEMELIF membership.

 Issues:

Whether the corporation may change its character as a corporation sole into a corporation aggregate by
mere amendment of its articles of incorporation without first going through the process of dissolution.

Held: NO.

True, the Corporation Code provides no specific mechanism for amending the articles of
incorporation of a corporation sole. But, as the RTC correctly held, Section 109 of the Corporation
Code allows the application to religious corporations of the general provisions governing non-stock
corporations.

For non-stock corporations, the power to amend its articles of incorporation lies in its members. The
code requires two-thirds of their votes for the approval of such an amendment. So how will this
requirement apply to a corporation sole that has technically but one member (the head of the religious
organization) who holds in his hands its broad corporate powers over the properties, rights, and interests of
his religious organization?

Although a non-stock corporation has a personality that is distinct from those of its members who
established it, its articles of incorporation cannot be amended solely through the action of its board of
trustees. The amendment needs the concurrence of at least two-thirds of its membership. If such
approval mechanism is made to operate in a corporation sole, its one member in whom all the powers of
the corporation technically belongs, needs to get the concurrence of two-thirds of its membership.
The one member, here the General Superintendent, is but a trustee, according to Section 110 of the
Corporation Code, of its membership.

Here, the evidence shows that the IEMELIF’s General Superintendent, respondent Bishop Lazaro,
who embodied the corporation sole, had obtained, not only the approval of the Consistory that drew
up corporate policies, but also that of the required two-thirds vote of its membership.

The amendment of the articles of incorporation, as correctly put by the CA, requires merely that a) the
amendment is not contrary to any provision or requirement under the Corporation Code, and that b)
it is for a legitimate purpose. Section 17 of the Corporation Code provides that amendment shall be
disapproved if, among others, the prescribed form of the articles of incorporation or amendment to it is not
observed, or if the purpose or purposes of the corporation are patently unconstitutional, illegal, immoral, or
contrary to government rules and regulations, or if the required percentage of ownership is not complied
with. These impediments do not appear in the case of IEMELIF.