Civil Aeronautics Board

October 5, 1999 Civil Aeronautics Board Old MIA Road, Pasay City Attention : Atty . Guia C . Martinez Executive Director Gentlemen: This refers to your letter dated September 8, 1999 requesting opinion on whether ASIAN AEROSPACE CORPORATION which has applied with your office for an authority to operate, is authorized to engage in "air transportation" business or " air commerce " on the basis of the purpose clause of its articles of incorporation which states: llcd "To assemble, manufacture, remanufacture, retrofit, repair overhaul, service, complete, customize, import distribute or engage in any commerce relating to, airplanes, helicopters, and other aircrafts of every kind, type and description, and other types of conveyances for transportation by air; and to build, construct, erect install, buy lease and otherwise hold or own plants, hangars, shops and other facilities, buildings, constructions and structures of whatever kind and character, necessary, convenient or suitable thereto: and in connection therewith, to act as agent, and or marketing representative, commissioned merchants, commercial broker, factor except as insurance agent, of any person, partnership, corporation, agency, association, or established engaged in any lawful business whether domestic or foreign, and to acquire or obtain from governmental authority, national or municipal, local or otherwise, or from any company, person, or corporation such charters, franchises, licenses, rights, privilege, and concessions which may be conducive to the attainment of the objectives of the corporation and to perform all acts and things necessary and proper to acquire title to and ownership of any class of product or merchandise and to dispose of the same in the general conduct of business of the corporation; and in general to do and perform any and all acts of work which may be necessary or advisable for, or related incidentally or directly with the above business or object of this corporation." (Emphasis supplied) You mentioned in your letter that while the above-quoted purpose clause does not expressly include the business of " air commerce " or " air transportation ",there is a catch-all phrase: " engage in any commerce " which gives rise to a legal question on whether or not the business would fall within the scope of said phrase. It is well-settled that a corporation only has the 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 of carrying out its express powers. Thus, the Commission, in a letter dated September 10, 1992 addressed to Chemical Industries of the Philippines, Inc. ,previously opined: "The rules governing the construction of charters of corporations are, for the most part, the same as those which govern the construction and interpretation of statutes, contracts and other written instruments, (7A Fletcher, Sec. 3640) It is a general rule that when the charter of a corporation confer certain enumerated powers on the corporation, it is to be construed as including incidental powers reasonably necessary to the proper exercise of the enumerated powers and as excluding all other non-enumerated powers. Thus, if the powers are expressly enumerated in detail, "such specification by implication excludes all other powers or rights, except such incidental or subordinate rights and powers as may be necessary to an exercise of the powers and rights expressly given. In other words, an enumeration of corporate powers implies the exclusion of all other powers, except those essential to the corporate existence and to the enjoyment and exercise of powers expressly conferred. The specification of certain powers as a limitation on such objects as are embodied therein and is an implied prohibition of the exercise of other distinct powers. Furthermore, express powers cannot be enlarged by implication. (6 Fletcher Cyclopedia Corporations, sec. 2483, citing several authorities) Thus, it was held that the general language of a charter following a recitation of specific power is construed and confined within the limitation of the specific power named. (William v. United Most Worship St.,John's Grand Lodge, 140 So 2d 206 (La App.,cited in 7A Fletcher, sec. 3650) This conforms with the generally accepted principle of statutory construction: "Expressio Unius Est Exclusio Alterius" which means, the express mention of one thing will, as a general rule, mean the exclusion of others not expressly mentioned. By familiar rule every public grant of property or privileges or franchises, if ambiguous, to be construed against the grantee and in favor of the public ,because an intention on the part of the government to grant to private persons, or to a particular corporation, property or rights in which the whole public is interested, cannot be presumed unless unquestionably expressed or necessarily to be implied in the terms of the grant ...(Central Transp. Co. v. Pullman's Car Co.,139 US 24, 35 L Ed 55, 11 ( illegible portion in SEC files ),cited in 6 Fletcher Sec. 2483) Thus, in determining a corporation's powers, if any ambiguity exists in the corporate charter, the charter must be strictly construed." Applying the above SEC opinion, it is necessary that a corporation must specify its intended purposes with sufficient clarity and elucidation in the articles of incorporation to define with certainty the scope of its business. Accordingly, inasmuch as " air transportation " business is not expressly included in the purpose clause of its articles of incorporation, the above-named corporation cannot engage in said line of business. The phrase " or engage in any commerce relating to " in the above cited purpose clause is construed to refer only to other activities related to the manufacture, repair, importation or distribution/sale of any type of aircrafts or conveyances for transportation by air, and should not impliedly include the business of "air transportation" or "air commerce". Should it be the intention of the corporation to engage in said line of business, it should amend its articles of incorporation in accordance with Section 16 of the Corporation Code to include such business activity in its purpose clause. prcd Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner