Philippine Miracle Missions, Inc. vs. Rev. Rufina Rosendo, et al.

[SEC-SICD * CASE NO. 1254. November 8, 1989.] PHILIPPINE MIRACLE MISSIONS, INC., represented by REV. BILL DAHL , petitioner , vs . REV. RUFINA ROSENDO, ET AL. , respondents . D E C I S I O N This is a petition praying that petitioner be declared as the only entity to be known as the "PHILIPPINE MIRACLE MISSIONS, INC." and none other and giving due course to the by-laws already submitted by the latter before this Commission; and, that the name "PHILIPPINE MIRACLE MISSIONS, INC." purportedly used in substitution by BETHEL RESCUE MISSIONS OF THE PHILIPPINES, INC. which was allegedly registered by the respondents in a deceitful manner be declared void, cancelled and non-existent. LexLib As culled from the records, it appears that on March 8, 1960, the petitioner was duly registered with this Commission as a religious corporation under and in accordance with the provisions of Act No. 1459, as amended, otherwise known as the Corporation Law, with one hundred six (106) members and with the following as Members of the Board of Trustees, namely: 1. Clyde Vernon Shields; 2. Andres B. Gomez; 3. Constantino L. Ramos; 4. Gabriel S. Espina; 5. Nenita L. Ramos. The corporate officers of the petitioner at that time were: 1. Clyde Vernon Shields President & Chairman of the Board and 2. Constantio L. Ramos Secretary/Treasurer As a religious corporation, the petitioner has commenced the transaction of its business but failed to file its by-laws with the Commission until December 9, 1974 when this controversy arose which culminated in the filing of this case. Briefly, the petitioner contested the filing with the Commission by the respondents of by-laws on December 9, 1974 and amended articles of incorporation on December 17, 1974, changing the petitioner's name from "PHILIPPINE MIRACLE MISSIONS, INC." to BETHEL RESCUE MISSIONS OF THE PHILIPPINES, INC. whereby corresponding certificates were issued by this Commission on December 10, 1974 and December 17, 1974, respectively. In its second amended petition, the petitioner, through representative, Rev. Clyde V. Shields, alleged that it is a duly registered religious corporation with SEC Registration No. 16627, dated March 8, 1960; that a membership list of the petitioner, dated February 23, 1960, containing 106 members, signed by its President-Founder, Rev. Clyde V. Shields, and attested to by its Secretary, Constantino Ramos, as well as the members of its Board of Trustees headed by Clyde V. Shields, had been submitted before this Commission along with its articles of incorporation; that before the arrival of Rev. Clyde V. Shields from abroad on December 24, 1974, a letter coming from the Commission, dated December 9, 1974, and signed by the latter's Chief Legal Counsel, Francisco I. Iturralde, addressed to the petitioner in care of Clyde Vernon Shields, was intercepted by respondent Rufina C. Rosendo; that on December 9, 1974, a group headed by respondents Rufina C. Rosendo, Carlos E. Bisuelan and Manuel Podes, as well as Samuel Salvacion, conspired together and represented themselves as legitimate and authorized representatives of petitioner and thru cunning and wilful misrepresentation, had caused to be filed and, in fact, did file with the Commission a mutilated, articles of incorporation and by-laws of the petitioner; that as a consequence thereof, the Commission had issued the corresponding certificates; that the mutilated articles of incorporation and by-laws of petitioner, as well as the other papers, submitted and filed along with it before the Commission by the respondents are all invalid and void; that respondent Rufina C. Rosendo had no authority to constitute or form a quorum by herself alone for the petitioner; that the filing and registration of another religious corporation with the same name "PHILIPPINE MIRACLE MISSIONS, INC." by the respondents which was later changed to BETHEL RESCUE MISSIONS OF THE PHILIPPINES, INC. had resulted to chaos and confusions thereby prejudicing the petitioner; and, that petitioner has suffered and incurred substantial damages resulting from such unlawful and deceitful acts of the respondents. In their answer, respondents denied all the material allegations in the second amended petition and, by way of affirmative defenses, claimed that they are bonafide and active members of petitioner before their election as officers thereof; that they were duly elected officers of petitioner in accordance with law; that after their election as officers of petitioner, they called for a special members' meeting for the purposes of amending petitioner's articles of incorporation and adopting its by-laws pursuant to Section 18 and 20 of the Corporation Law; that there is but one religious corporation existing by virtue of the laws of the Philippines under the name "PHILIPPINES MIRACLE MISSIONS, INC." which is now BETHEL RESCUE MISSIONS OF THE PHILIPPINES, INC.; that Rev. Clyde V. Shields had not been duly authorized by the members of the petitioner to file and prosecute the instant case before this Commission; that Rev. Clyde V. Shields had failed to file the proper action and/or to prosecute the same in the name of the real party-in-interest; that Rev. Clyde V. Shields had been legally and lawfully relieved of his position as President of the petitioner and had become unfit to serve as officer thereof; and, that the by-laws submitted by Rev. Clyde V. Shields' group had not been adopted in accordance with Section 20 of the Corporation Law. From the pleadings filed by the parties, it becomes clear that the issues to be resolved are: 1. Whether or not the amendment to the articles of incorporation made by the respondents changing the name of the petitioner from "PHILIPPINE MIRACLE MISSIONS, INC." to BETHEL RESCUE MISSIONS OF THE PHILIPPINES, INC. was valid; and 2. Whether or not the petitioner's by-laws filed by the Respondents before this Commission on December 9, 1974 was validly adopted. Section 18 and 20 of the Corporation Law, which was the law in force when the said amendment of the articles of incorporation and adoption of the by-laws of petitioner were made, provides: "Any corporation may for legitimate corporate purpose or purposes amend its articles of incorporation by a majority vote of its board of directors or trustees and the vote or written, assent of two- thirds (2/3) of its members if it be a non-stock corporation, . . . ." (Section 18, Corporation Law). ". . . . For the adoption of any by-laws by the corporation, the affirmative vote of . . . a majority of the members if there be no capital stock shall be necessary. The by-laws shall be signed by the . . . members voting for them . . . ." (Section 20, Corporation Law). From the evidence presented by the parties, both testimonial as well as documentary, it has been established that the said amendment of the articles of incorporation of the petitioner changing its name from "PHILIPPINE MIRACLE MISSIONS, INC." to "BETHEL RESCUE MISSIONS OF THE PHILIPPINES, INC." and the adoption of its by-laws on November 18, 1974 by the respondents or their group were tainted with irregularities and the same were not made in accordance with law. These irregularities consist of the inclusion of non-members, including minors, in the alleged revised membership list of petitioner. No less than respondent Manuel Podes testified that there was really no such meeting held for which he and his wife, who was not a member of the petitioner, were elected members of the board of directors of the petitioner; that neither was there any meeting held for the purpose of electing the officers of petitioner; that even if he was not the Secretary of petitioner, respondent Rufina Rosendo designated him and respondent Carlos Bisuelan as Secretary and Vice-President of the petitioner, respectively; that he was merely asked by respondent Rufina Rosendo to sign his name above the word Secretary as appearing in the adoption clause of the by-laws in question; and that his wife, Pacita Podes, and his two (2) daughters, Diana Podes and Marybeth Podes, who were then two and four years old, respectively, were made to appear as members of the petitioner even if they were, in truth and in fact, not members thereof. Pacita Podes confirmed the testimony of her husband and she added that she signed her name in the by-laws in question because her husband, respondent Manuel Podes, signed the same. prcd Likewise, there was no showing that the amended articles of incorporation in question was further amended by a majority vote of all the legitimate members of the board of trustees of the petitioner by the vote or written assent of two-thirds of its bonafide members. The same holds true with respect to the adoption of the by-laws in question. It did not comply with the requirements of Section 18 and 20 of the Corporation Law The formalities required by Section 18 and 20 of the Corporation Law for the adoption of by-laws are: (1) That the by-laws be signed by the stockholders or members voting for them; (2) A copy thereof, duly certified by a majority of the directors and countersigned by the secretary of the corporation, be filed with the Commission. Hence, "where the mode of adoption is essentially prescribed by the statutes or the charter, substantial compliance therewith is generally regarded as to validity . . .". (Section 4173, 8 Fletcher 649). When this case was about to be decided, petitioner's representative, Rev. Clyde V. Shields, died and was substituted herein by the incumbent President and Chairman of the Board of Trustees of petitioner, Rev. Bill Dahl. ACCORDINGLY, judgment is hereby rendered: 1. Declaring that there is but one lawful entity by the name "PHILIPPINE MIRACLE MISSIONS, INC." which is the petitioner; 2. Declaring as void, cancelled and non-existent the amended articles of incorporation changing petitioner's name from "PHILIPPINE MIRACLE MISSIONS, INC." to "BETHEL RESCUE MISSIONS OF THE PHILIPPINES, INC." as well as the by-laws filed by the respondents on December 9, 1974 and other papers filed by the respondents relative thereto; 3. Recalling the Certificates of Filing of By-laws and Amended Articles of Incorporation issued by this Commission, dated December 10 and December 17, 1974, respectively; and, 4. Directing the Corporate and Legal Department of this Commission to advise the petitioner to adopt a new by-laws and submit the same for approval. Let copies of this DECISION be furnished to the Corporate and Legal Department for its information, guidance and appropriate action, and to the Records Division to be attached to and form part of the records of the corporation concerned. No pronouncement as to costs. llcd SO ORDERED. (SGD.) ROLANDO C. MALABONGA Hearing Officer