Bible Apostolic Church of the Philippines, Inc. vs. James D. Childs, et al.

[SEC-SICD * CASE NO. 1445. September 3, 1981.] BIBLE APOSTOLIC CHURCH OF THE PHILIPPINES, INC. , petitioner , vs . JAMES D. CHILDS, SILVINO PERNITO, DOMINGO GUZMAN, EMILIO ELMACO, PABLO SARABOSING, PABLO JAQUING, APOSTOLIC PHIL. PENTECOSTAL MISSIONS, INC. AND BIBLE APOSTOLIC CHURCH OF THE PHILIPPINES, INC. , respondents . D E C I S I O N This is a petition for alleged violation of Sec. 20 of the Corporation Law and Sec. 6, Subsection i(2, 4, 5, & 6) of P.D. 902-A committed by the respondents. llcd Petitioner alleges, among others, that it is a duly registered non-stock corporation; that the respondents are former members/officers of the Apostolic Philippine Pentecostal Mission, Inc. which is the precursor organization of the Bible Apostolic Church of the Philippines, Inc ., herein petitioner; that petitioner was formerly known as Apostolic Pentecostal Missions, Inc ., which was registered with this Commission on May 22, 1968 but failed to file its by-laws within thirty (30) days from said date pursuant to Sec. 20 of the Corporation Law; that on October 24, 1974, the board of directors of Apostolic Pentecostal Missions, Inc . approved a resolution changing the name of the association to Bible Apostolic Church of the Philippines, Inc .; that on September 29, 1976, the Board of Directors of Apostolic Philippine Pentecostal Missions, Inc . and/or herein petitioner met and adopted a resolution ousting James Childs as director general of the association; that subsequently, on October 22, 1976, respondent James Childs presided over a general membership meeting of the association which elected the respondents as officers of the association that on November 17, 1978, the petitioner, held its annual convention and decided, among others, to formally register itself with the Securities and Exchange Commission and the same was done on December 8, 1976 under Registration No. 710841; that its by-laws was likewise registered on December 28, 1976; that respondents, despite the fact that the Apostolic Pentecostal Missions, Inc . has not been effectively registered with the SEC for its failure to file its by-laws, continue to represent themselves as the lawful representatives of said corporation using petitioner's corporate name " Bible Apostolic Church of the Philippines ;" that the " Apostolic Pentecostal Missions, Inc . or the Foreign Missionary Fellowship, Inc . as the precursor organization of petitioner organization, had not been in continuous operation for a period of at least five (5) years, contrary to the provisions of Sec. 6, subsection i (5) of P.D. 902-A; that the continued misrepresentation on the part of the respondents as to the alleged registration of the aforesaid corporation and their failure to comply with the requirement of law constitute a gross violation of the Corporation Law and P.D. 902-A. In view of the foregoing, petitioner prays for an Order directing the private respondents to change the corporate name of their organization and declaring the herein petitioner as lawfully and legitimately incorporated as a corporation and for the respondents to desist from representing the herein petitioner and its precursor organizations. In their Answer, the respondents alleged that on October 24, 1974, the Board of Directors of Apostolic Philippine Pentecostal Missions, Inc ., of which Mr. Vivencio Talle was a member, adopted a resolution amending its Articles of Incorporation by changing the corporate name to Bible Apostolic Church of the Philippines ; that as early as said date, Vivencio Talle, had full knowledge of the legal existence of the Bible Apostolic Church of the Philippines because he was then its Secretary and one of the members of its board; and that despite this knowledge, and in evident bad faith, Vivencio Talle, together with close members of his family, formed another organization, the petitioner herein, usurping the corporate name of an existing organization of which he was a director and a secretary since October 24, 1974 up to October 23, 1976 and surreptitiously registering it with the Commission on December 8, 1976, that in registering said organization, Mr. Talle undertook to change the said corporate name in the event that another corporation has acquired a prior right to use the same or one similar to it. On the basis of the foregoing allegations, respondents contend that it is petitioner, and not the respondents, which should be directed to change its corporate name pursuant to the undertakings of Mr. Vivencio Talle, dated November 24, 1976, and for Mr. Vivencio Talle's group, not the respondents', to desist from using the name " Bible Apostolic Church of the Philippines ." The only issue involved is whether the petitioner has the prior right to use the corporate name " Bible Apostolic Church of the Philippines, Inc ." We don't believe so. First of all, Mr. Vivencio Talle, the president and founder of petitioner organization knows for a fact that the corporate name Bible Apostolic Church of the Philippines, Inc . has already been appropriated by an organization the precursor of which was registered as early as 1958, and of which he was its secretary and member of the board as late as 1975. Therefore, because of such knowledge, his subsequent formation of an organization on November 20, 1976 with the same corporate name Bible Apostolic Church of the Philippines is tainted with bad faith. Mr. Talle's group tried to justify the formation and registration of said association by saying that respondent Bible Apostolic Church of the Philippines which, chronologically, used to be called Foreign Missionary Fellowship, Inc., Foreign Missionary Fellowship, Christ is the Answer, Inc . and Apostolic Philippines Pentecostal Missions, Inc . , " was not given final approval to operate as a corporation for failure . . . to file its by-laws . . . within thirty (30) days from the registration of the Articles of Incorporation ." In other words, it is its thinking that the formation and registration of the second Bible Apostolic Church of the Philippines was in order because the first Bible Apostolic Church of the Philippines was not legally existing because it failed to file its by-laws and this is contrary to the provision of Section 20 of the Corporation Law and in violation of Section 6, subsection i (2, 4, 5 & 6) of P.D. No. 902-A. Petitioner's arguments are without legal basis. Section 20 of the Corporation Law cited by petitioner provides: "Every Corporation formed under this Act must, within one month after the filing of Articles of Incorporation with the Securities and Exchange Commission, adopt a code of by-laws for its government not inconsistent with this Act. . . ." However, the adoption of a by-laws, although advisable is not mandatory. " Accordingly, failure to adopt by-laws does not result in the termination of the corporate existence. Neither does it invalidate corporate acts " (Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Philippines, 1979 Ed. Vol. 3, p. 337). Likewise, under Section 6 of P.D. No. 902-A, also cited by petitioner, the failure to adopt by-laws is merely a ground for the revocation of the franchise and such failure does not operate automatically to divest a corporation of its legal corporate existence. This must be done thru quo warranto proceedings. Incidentally, the corporate records of respondent Bible Apostolic Church of the Philippines on file with this Commission show that the by-laws of its precursor organization, Foreign Missionary Fellowship, Christ is the Answer, Inc ., was adopted on March 8, 1968 and the corresponding certificate of filing of by-laws was issued by this Commission on April 14, 1977. It may be argued that at the time Mr. Talle's group organized its own Bible Apostolic Church of the Philippines and had it registered with the Commission on December 8, 1976, the amendment to change the name Apostolic Philippine Pentecostal Missions, Inc . to Bible Apostolic Church of the Philippines, Inc . was not yet given due course by the Commission because the corresponding certificate of amendment was issued only on February 23, 1977. However, Section 18 of the Corporation Law explicitly provides in part that: " A copy of the Articles of Incorporation as amended , . . . shall be filed with the Securities and Exchange Commission who shall attach the same to the original articles of incorporation on file in this office . From the time of filing such copy of the amended articles of incorporation, the corporation shall have the same powers and it and the members or stockholders thereof shall thereafter be subject to the same liabilities as if such amendment had been embraced in the original articles of incorporation ." (Emphasis supplied). From the foregoing, it is clear that the amendment in the change of corporate name becomes effective upon the filing of a copy of the amended articles of incorporation with the Commission and not upon the issuance by it of the certificate of filing of the amendment. Records show that a copy of the amended articles of incorporation of Apostolic Pentecostal Missions, Inc . adopted on October 24, 1974, indicating, among others, the change of name to Bible Apostolic Church of the Philippines, was filed with the Commission on December 2, 1974. LLjur IN VIEW OF THE FOREGOING PREMISES, this Commission hereby holds that the instant petition is without merit and, therefore, should be, as it is hereby, DISMISSED. As an affirmative relief prayed for in respondent's answer, petitioner corporation is hereby directed to change its corporate name by amending the articles of incorporation within thirty (30) days from finality of this Decision; conformably with its undertaking dated November 24, 1976. SO ORDERED. (SGD.) ALFREDO B. OCA Hearing Officer