Mr. Benigno C. de Goitia

January 13, 1988 Mr. Benigno C. de Goitia Boy Scouts of the Philippines Aurora Blvd.,Nichols Road Pasay, Metro Manila Sir : This refers to your letter dated January 4, 1988, inquiring on the definition of a relief organization and/or social welfare organization and as to whether a social welfare organization, particularly the Boy Scouts of the Philippines, is or could act as a relief organization by means of rendering services during calamities such as typhoons and earthquakes and other assistance to indigents in cooperation with other civic organizations such as free distribution of books, clothings, vitamins and food to members and deserving members of indigent families. LibLex In connection therewith, please be advised that the Boy Scouts of the Philippines was created by a special law, the Commonwealth Act 111 , as amended by P.D. 460 and as such, is covered by Section 4 of the corporation code which reads as follows: SECTION 4. Corporations created by special laws or charter . Corporations created by special laws or charter shall be governed primarily by the provisions of the special law or charter creating them or applicable to them , supplemented by the provisions of this code, insofar as they are applicable." (Emphasis supplied) Thus, in line with the SEC ruling in Alfredo C. Gray, Sr. et al. vs. Agustin Marketing, et al (SEC Case No. 2102), wherein it was held that the Commission has no jurisdiction over corporations created by special law, we regret to inform you that this Commission refrains from giving appropriate comments on the query. However, for purposes of information only the following may be imparted. There is no specific definition of a "relief organization and/or social welfare organization". The Corporation Code only defines a "non-stock corporation" in general as follows: "SECTION 87. Definition . For purposes of this Code, a non-stock corporation is one where no part of its income is distributable as dividends to its members, trustees or officers, subject to the provisions of this Code on dissolution Provided, That any profit which a non-stock corporation may obtain as an incident to its operations shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized, subject to the provisions of this Title. xxx xxx xxx." "SECTION 88. Purposes . Non-stock corporation may be formed or organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service or similar purposes like trade industry, agricultural and like chambers or any combination thereof, subject to the special provisions of this Title governing particular classes or non-stock corporations." Likewise, the following definitions in relation thereto, may be of help: "Social Work Agency" is a person, corporation or organization, private or governmental, that engages mainly and generally, or represents itself to engage in social welfare work, whether case work, group work, or community work, and obtains its finances, either totally or in part, from any agency or instrumentality of the government and/or from the community by direct or indirect solicitations and/or fund drives, and/or private endowment. (Sec. 1 (c),RA 4378, as amended by R.A. 5175) "Charitable organization" are organizations for the relief of poverty, distress, or other conditions of similar public concern. (Jose Araas Annotations and Jurisprudence of the National Internal Revenue Code of 1977 as amended, citing Reg. 118, Sec. 39,101 (6)-1, Law of Federal Income Taxation Mertens, Vol. VI, par. 34.09) As to whether the Boy Scouts of the Philippines is considered a social welfare/relief organization reference should be made on the purposes/objectives enumerated in its charter. It is well settled that a corporation has only such powers as are expressly granted in its charter or in the statutes under which it is created or such powers as are necessary for the purpose or carrying out its express powers. (13 Am. Jur.,sec. 739).Thus, the Court ruled: "In the determination of what business may be carried on by a corporation, reference must be had to its charter, and unless the power to carry on a particular business is either expressly or impliedly conferred thereby, it does not exist." (Chewacla Lime v. Disnukes, 87 Ala. 344, 650. 122, 5 LRA 100, cited in Am. Jur.,sec. 743). The corporate business is limited by the corporation's charter, and "it is illegal for a corporation to apply either its capital or its profit to objects not contemplated by its charter." (Am. Jur.,Supra.,sec. 739, citing Dodge v. Voolsey, 18 How. (US) 331, 15L. ed. 401). Likewise, only such powers as are reasonably necessary to enable corporations to carry out the express powers granted and the purposes of the creation are to be implied as are to be deemed incidental. (Am. Jur. sec. 740).Powers merely convenient or useful are not implied if they are not essential, having in view the nature and object of incorporation. (Ibid, citing Planters Bank v. Sharp, 6 How. (US) 301, 12L. ed. 447). Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman