Sylvia T. Velasco vs. Philippine Academy of Rehabilitation Medicine, Inc., et al.

[SEC-SICD * CASE NO. 12-97-5837. September 9, 1998.] SYLVIA T. VELASCO , petitioner , vs . PHILIPPINE ACADEMY OF REHABILITATION MEDICINE, INC., ET AL. , respondents . D E C I S I O N Submitted for resolution is a complaint seeking the annulment of defendant Philippine Academy of Rehabilitation Medicine's (PARM) August 25, 1997 resolution and of defendant Philippine Board of Medicine's (PBRM) Resolution No. 97-3, both of which, respectively suspended plaintiff as a member of said organizations and the permanent enjoinment thereof. Plaintiff likewise seeks a ruling finding both the corporate and individual defendants jointly and solidarily liable to her for moral damages and attorney's fees. The complaint provisionally also prayed for the issuance of a temporary restraining order/preliminary injunction enjoining the defendants from implementing the resolutions and disseminating the same pending resolution of the case which this Hearing Officer granted. In support of her complaint, plaintiff alleged that the August 25, 1997 resolution of defendant PARM (which suspended her as a Fellow/Member for two (2) years and Resolution No. 97-3 of defendant PBRM (which likewise suspended her as a member for three (3) years violated her constitutionally granted right to due process, as the procedure provided in the By-laws of the two corporate defendants (with respect to suspension/revocation of membership) was not followed with respect to her. Specifically, plaintiff alleged that in the case of PARM, she was not given an adequate opportunity to defend herself as she was not even informed of the purpose of the August 25, 1997 meeting of PARM's Executive Counsel which resulted in her suspension; and that PARM's resolution did not mention the reasons for her suspension. In the case of PBRM, plaintiff alleged that she was not given a copy of the charges against her, she was not given ten (10) days to prepare for defense; and there was no hearing held wherein she was afforded a full opportunity to be heard in her defense, as required by PBRM's by-laws. She likewise alleged that the penalty of suspension imposed upon her by the two corporate defendants, which was unappealable, was too harsh as it practically expelled her from the two organizations. In the case of her suspension by PARM, plaintiff alleged that she is even in a worse position than an expelled member since under PARM's By-laws, an expelled member may apply for re-admission after only one (1) year. Plaintiff further alleged that her suspension (without due process) prejudiced her professional standing and employment with other institutions. This was aggravated by the individual defendants' acts of furnishing copies of said resolutions to the different medical institutions (without any legal obligation to do so). The same controverted acts besmirched her reputation and caused her social humiliation, mental anguish, serious anxiety, wounded feelings and similar injury entitling her to moral damages. Finally, plaintiff alleged that the acts of the individual and corporate defendants constrained her to litigate, hire the services of counsel and to incur attorney's fees and other costs. In their Answer, defendants contend that plaintiff was validly suspended as she was responsible for the shortage of funds of PARM and PBRM, which occurred during her term as Executive Director and Chairperson of the Board of Governors respectively of the two (2) organizations. Defendants contend that plaintiff herself admitted respondents' responsibility for said shortage, in a letter dated July 30, 1997. Defendants contend that they gave plaintiff opportunity to give her side on the matter. With respect to plaintiff's suspension by PARM, defendants countered that she was given the opportunity to be heard, as she admitted in the August 25, 1997 meeting of PARM's executive council that she used the money for personal purposes. According to PARM its actions regarding the plaintiff's suspension were anything but cautious, deliberate and proper. Regarding PBRM, defendants claim that a shortage of funds were also discovered to have occurred during plaintiff's term as its Chairperson of its Board of Governors. And, just as PBRM was about to conduct its own formal Investigation (just like what PARM did), plaintiff admitted to defalcating PBRM's funds in her July 30, 1997 letter. This was the basis of defendant PBRM's Resolution No. 97-3, suspending plaintiff's membership for three (3) years. As in the case of PARM, PBRM contends that its sanctions were the result of careful deliberation and were carried out in a very proper and legal manner. Defendants further contend that the powers of discipline over fellows (in the case of PARM) or governors (in the case of PBRM) are strictly internal matters and such powers are beyond the review of the SECURITIES and EXCHANGE COMMISSION (SEC), when they are exercised in accordance with the relevant Articles of Incorporation, By-laws, and corporate law. Finally, defendants contend that the individual defendants merely acted in their official capacity in good conscience and in the performance of their duty; and, that the cause of action in the Complaint is more properly subject of the jurisdiction of ordinary courts, if at all. The issue of jurisdiction of this Commission over the action in the complaint raised by respondents has no basis. The parties admit that respondents-corporations PARM and PBRM, are duly organized and existing under Philippine Laws, thus this Commission has jurisdiction over the causes of action of the complainant against respondents. The jurisdiction of this Commission having been well established, the issues now to be resolved are: a. Were the suspensions issued by PARM and PBRM against complainant Dr. Sylvia Velasco valid corporate acts? b. Were the suspensions commensurate with the offense allegedly committed? c. Was there denial of due process on the part of complainant? d. Are the parties entitled to damages? The suspension of complainant Dr. Sylvia Velasco were valid corporate acts by respondents PARM and PBRM, being authorized by its By-Laws. The length of suspension is a little too long (PARM suspension is two years and PBRM suspension is three [3] years) considering that complainant tried her best to refund the funds she personally used and showed regrets of the problem she caused as shown in her letters to her colleagues. She even voluntarily tendered her resignation prior to the decision suspending her, (Exhibits "8" "9" "D" and "E"). The fact as admitted in the complaint that the Executive Council for PARM and Board of Governors for PBRM had respectively conducted meetings to treat complainant's case and the admission by the latter in her letters (Exhibits "1" and "10") that she personally used the funds of the corporations are enough basis to reach their decisions. Such circumstances would justify a substantial compliance of the due process required in the By-laws of the corporations. The acts of the corporations in sending information to concerned parties on the suspended status of the complainant were exercised in good faith so as to protect them from being bound by the rights and privileges accorded to from mere membership to said corporations. That no damage or injury could be claimed of against respondents. WHEREFORE, premises considered decision is hereby rendered terminating the suspension of complainant Dr. Sylvia Velasco by PARM and PBRM upon receipt of this order. No pronouncement as to damages and costs of suit. SO ORDERED. (SGD.) GEORGE P. PALMARES Hearing Officer