Baclaran-Sucat Drivers Association Inc.

September 29, 1987 Baclaran-Sucat Drivers Association Inc. Sucat Rd. cor. South Superhighway Paraaque, Metro Manila Gentlemen : This refers to your letter, dated July 30, 1987, requesting the opinion of this Commission on the attached resolution of the general membership of that association, adopted on June 8, 1987. It appears therein that Mr. Casiano Cereno was removed as an officer of the Association, and likewise expelled as a member thereof, by the vote of the majority of the members. Anent thereto, please be advised that the power to remove an officer for cause inheres in every corporation as part of its existence. (2 Fletcher, Cyc. Corp.,1982 rev. vol.,sec. 351 at 151).Irrespective of any provision in the statute, charter or by-laws, members have authority to remove officers during their term if substantial grounds can be shown. The power to remove a Corporate officer from office for reasonable and just cause is one of the common law incidents of all corporations. (Ibid.).In instances, however, where the term of an officer is not fixed by contract, charter or general statute, he may be removed at anytime with or without cause at the pleasure of the appointing body, and no specific cause need be assigned therefor. (Fletcher, sec. 353 at 155).The removal must ordinarily be by the body or officer authorized to elect or appoint. (Fletcher, sec. 357). A perusal of the by-laws of that association reveals that the officers therein are elected by secret ballot by all the active members in a general meeting, who shall hold office for one (1) year and/or until their successors are duly elected and qualified. Consequently, the general right of removal of officers in that Association resides with the active members, and action by the majority of them would suffice to constitute removal of officer. Apropos the disenfranchisement or expulsion of members, Section 91 of the Corporation Code of the Philippines reads thus: "Termination of membership. Membership shall be terminated in the manner and for the causes provided in the articles of incorporation or the by-laws. Termination of membership shall have the effect of extinguishing all rights of a member in the corporation or in its property, unless otherwise provided in the articles of incorporation or by-laws." Neither the articles of incorporation nor the by-laws of that association provide for the manner and causes for the termination of its membership. In the absence thereof, the decided weight of authority is to the effect that the power to expel a member may be exercised under certain situations, namely: (1) when an offense is committed which, although it has no immediate relation to a member's duty as such is of so infamous a nature as to render him unfit for the society of honest men, and which is indictable at common law; (2) when the offense is a violation of his duty as a member of the corporation; and (3) when the offense is of a mixed nature, being both against his duty as a member of the corporation and also indictable at common law. (Fletcher, sec. 5697 at 781-782). Many cases come before the courts for determination of the sufficiency of particular acts to justify expulsion. (Fletcher, sec. 5699).Referring to some of them specifically, a non-stock corporation may disenfranchise, expel or suspend a member for acts of disloyalty, or for making or reporting any false or fictitious purchases or sales, or acting in any way in bad faith, dishonestly or dishonorably. (Fairchild v. Tillotson, 118 Misc. 639, 195 NYS 39; Grace v. Grace Inst.,19NY2d 307, 279 NYS2d, 721, 226, NE2d; Pitcher v. Board of Trade of Chicago, 121 Ill. 412, 13 NE 187; Gottlieb v. Economy Stores, Inc.,199 Va. 848, 102 SE 2d 345, cited in Fletcher, Supra.). Please be advised further that when the offense committed by a member is against his duty to the corporation, he may be expelled on trial and conviction by the corporation, and the power to expel such member is primarily lodged in the whole body of members as constituting or representing the corporation. (Fletcher, sec. 5702).However, in order that the action of a corporation in expelling a member for cause may be valid, it is essential, in the absence of a waiver, that there shall be a hearing or trial of the charge against him, with reasonable notice to him and a fair opportunity to be heard in his defense. (Fletcher, Supra.).If the method of trial is not regulated by the laws of the association, it should at least permit substantial justice. The hearing must be conducted fairly and openly, and the body or person before whom it is had or who are to decide the case must be unprejudiced. (Ibid.). LibLex Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman