Philippine Veterans Legion, Inc. vs. Tomas G. Batilo, et al.

[SEC-SICD * CASE NO. 1903. May 14, 1981.] PHILIPPINE VETERANS LEGION, INC., represented herein by its National Commander, Tomas T. Nufable , plaintiff, vs . TOMAS G. BATILO, ROMAN HAO, JUAN ALIGA, ARTURO V. BALATERO, TITO CESAR, FIDENCIO NILO, LORETO OIDEM, VICENTE V. TAN, JOSE B. BELVIZ, RAMON JURILLA, CECILIO FLORES, JOSE GO GUAN, RICARDO BAUTISTA, and BONIFACIO JUTBA , defendants . [SEC-SICD * CASE NO. 1911. May 14, 1981.] TOMAS G. BATILO, ROMAN HAO, JUAN ALIGA, ARTURO BALATERO, TITO CESAR, FIDENCIO NILO, VICENTE B. TAN, LORETO OIDEM, JOSE BELVIZ, RAMON JURILLA, CECILIO FLORES, RICARDO BAUTISTA, JOSE GO GUAN and BONIFACIO JUTBA, petitioners, vs. TOMAS T. NUFABLE, MARCELINO VICENTE, ADEODATO JUNAL, CASIANO VILLANUEVA, RAMON BK. CHUA, CESAR ALZONA, FELIPE BELLEZAR, CHUNG CHIN TANG, RICARDO MADAYAG, BEN BUENAFLOR, and FELIPE FETALVERO, respondents . D E C I S I O N These two actions consolidated for purposes of trial are a fight for the directorateship of the Philippine Veterans Legion, Inc. LibLex The Philippine Veterans Legion, Inc. is a non-stock, non-profit organization of war veterans. Its governing body is called the National Directorate composed of a National Commander, a Vice-National Commander, three Deputy National Commanders, one each for Luzon, Visayas and Mindanao and three national directors each for the above geographical divisions who are elected by plurality votes at its annual National Convention for a term of one legion year. The facts which have given rise to the instant law-suits are not novel in the history of the legion. These facts in substance are as follows: On May 24, 1980, pursuant to the provisions of its Constitution and By-laws, the Philippine Veterans Legion, Inc., had its 35th Annual National Convention at the PVAO Social Hall, PVAO Compound, Arroceros, Manila, to elect the members of its 35th National Directorate. Prior to the convention date, Tomas T. Nufable, incumbent National Commander of the 34th National Directorate, created an Accreditation Committee composed of Frisco Afos, Sr., as chairman, and Julio D. Roble, Tom Y. Gin, Ben Buenaflor and Ricardo Madayag as members. The committee submitted a list of accredited chapters and posts (Exh. "D") to serve as the official basis in ascertaining the delegates to the National Convention. In preparing the list, the committee disqualified a number of chapters and posts which were organized through the efforts of Tomas C. Batilo for alleged lack of authority to organize. Furthermore, the committee did not accredit a number of chapters and posts affiliated with the Batilo group for the reason that their membership dues which were paid in postal money orders were received at the Philippine Veterans Legion's National Office after the deadline set on May 9, 1980, although mailed before the said deadline. Julio D. Roble, member of the Accreditation Committee and National Auditor, did not sign or certify the said accreditation report alleging that it was incorrect and favored the Nufable Group. During the convention, there were two groups fighting for seats in the directorateship of the 35th National Directorate of the legion. One group was headed by Tomas T. Nufable, (hereinafter called the Nufable Group) and the other group was headed by Tomas G. Batilo (hereinafter called the Batilo Group). The Batilo Group, claiming that the list of accredited chapters (Exhibit "D") has no basis, it not being certified by the National Auditor as required in the by-laws of the legion, did not register in the list prepared by the Accreditation Committee (Exh. "P"). At two o'clock in the afternoon that day, the election proceedings started presided over by Freddie de la Cruz. The presiding officer announced that there was a resolution submitted by the Batilo group to set aside the accreditation report of the accreditation committee for having violated the by-laws of the legion and for not being certified to by its national auditor. Likewise, a resolution for the acceptance of the accreditation report submitted by Julio D. Roble, national auditor, was presented. The above two resolutions were however tabled for future discussion. A verbal motion for a "status quo resolution" which called for an "automatic reelection" of all the members of the 34th National Directorate was then presented on the floor. During the trial, witnesses testified that there was no roll call of the voting delegates and that the legionaires (members of the 34th National Directorate) included in this status quo resolution were not consulted. Registered as well as unregistered delegates were all mixed up together during the proceedings and it was not determined whether those who voted for or against the status quo resolution were registered or unregistered voting delegates, considering that the voting was by viva voce . Despite protest from a number of delegates, especially those from Batilo group, the status quo resolution was declared unanimously approved. Batilo's group and a number of delegates thereafter moved out of the convention hall and transferred to another portion of the same building where they reconvened to consider the holding of an election. In the meeting that followed, these delegates after registering and paying the required fees and dues, unanimously resolved to hold the requisite election to choose the members of the 35th National Directorate of the legion and set aside as null and void the status quo resolution. From a slot nomination, the group elected a set of directors. prLL Meanwhile, on the same day, the Nufable group, as a result of the status quo resolution, was inducted as directors of the 35th National Directorate. The Batilo group, on the other hand, had its separate induction of officers for the 35th National Directorate on June 8, 1980 at the Golden Palace Restaurant. On May 28, 1980, the Batilo group published in the Bulletin Today that they were the duly elected officers of the 35th National Directorate of the Philippine Veterans Legion, Inc. and that they were going to take over the national directorateship on July 1, 1980, the start of the legion year, hence the filing of S.E.C. Case No. 1903. Since there are two groups claiming to be the valid set of officers for the 35th National Directorate of the legion, pending trial, the Commission created a management committee to manage the affairs of the legion. The parties, during the pre-trial conference, raised five issues namely: 1. Who is legally authorized under the by-laws of the Philippine Veterans Legion, Inc. to certify to the correctness of the list of voting delegates? 2. How shall the voting delegate per post and chapter be determined? 3. Was the declaration of the status quo resolution on May 24, 1980 proper? 4. Was the holding of a separate election by the Batilo group proper? 5. Which is the valid set of officers for the 35th National Directorate of the Philippine Veterans Legion, Inc.? By agreement of the parties, the 1962 version of the by-laws of the Philippine Veterans Legion, Inc., as approved in 1965 by the Securities and Exchange Commission shall be used as the official by-laws in these actions. On the first issue, the by-laws of the legion is explicit on the matter. Thus, Section 10, article VII provides: SECTION 10, ARTICLE VII xxx xxx xxx In the matter of accreditation and registration of voting delegates to any National Convention, the certification by the National Auditor of the genuineness and correctness of reports required of the National Adjutant or the National Treasurer, respectively shall be a condition precedent to the validity and acceptance of such reports. . . ." In the instant cases, the list of accredited chapters and posts (Exh. "D") submitted by the Accreditation Committee did not bear the certification of the National Auditor for he believes and there is reason to believe that it is inaccurate. Hence, he submitted a new list of accredited chapters and posts and presented it to the accreditation committee but this was disapproved. The next question to be resolved is the determination of voting delegates per chapter and post. A chapter consists of three posts. A post has two voting delegates. One chapter has six voting delegates plus another six voting delegates from the three posts or a total of twelve voting delegates for a single chapter. Section 5, Article VI of the By-Laws of the legion provides: "SECTION 5, ARTICLE VI. Representation by Voting Delegates To determine paid-up membership for purposes of representation by voting delegates during any annual or special National Convention, all membership dues of duly organized Legion Posts and constituted Legion Chapters shall be remitted to and received by the National Treasurer at the National Headquarters either in cash or by money order fifteen (15) days before the opening of such convention." It would seem from the abovequoted provision of the by-laws that payments shall not only be remitted to the National Treasurer fifteen days before the convention but also received within said period. A question arose therefore as to whether or not the accreditation committee should accredit chapters and posts whose payments were paid by postal money order which were remitted before the fifteen-day period but received by the National Treasurer after said period. Considering that this is a nationwide organization, it may be expected that payments by far-flung chapters and posts be made through the mails and considering further the sad state of our postal service, it is not unusual that payments through postal money orders are received late. In view of this consideration plus the fact that this period requirement has been relaxed in the past, we feel that for purposes of the 35th Annual National Convention, payments made by postal money orders which were remitted before the fifteen-day period may be considered substantial compliance of the by-laws provision above-quoted although such remittance may have been received within the said period. The third question to be resolved is the propriety of the declaration of the "status quo resolution". The said resolution purportedly adopted by the convention reads: "RESOLVED, AS IT IS HEREBY RESOLVED, to maintain STATUS QUO, making them unanimously elected members of the 35th National Directorate for Legion Year 1980-1981, to commence on 1 July 1980, in order to preserve UNITY, BROTHERHOOD AND COMMON UNDERSTANDING among the members of the Philippine Veterans Legion." The by-laws of the legion, in its Section IV, Article VII provides: "Members of the National Directorate shall be elected by plurality votes at every annual National Convention for a term of one Legion Year. . . ." The above provision contemplates of an election and the word "elect" in the interest cases must be interpreted in its ordinary meaning. To "elect" is to choose or designate for office by majority or plurality vote. . . . The ordinary meaning of the word "elect" is chosen, taken by preference from among two or more, selected. The word "elect" when applied to an office is frequently used in the sense of one chosen as provided by law. (14 Words and Phrases 235). A "declaration of a status quo" is not an election as envisioned in the by-laws of the Philippine Veterans Legion, Inc. There must be an actual selection of persons to govern the PVL National Directorate. Assuming that the legionnaires included in the status quo resolution were nominated to the same positions they had been holding (which is of doubtful veracity because of the conflicting testimonies of Leg. Frisco Afos, Sr., witness for the Nufable group, who first testified that there were no nominations to the 35th National Directorate because the nominations were already waived in favor of status quo resolution, (p. 70, TSN, Sept. 9, 1980 hearing), and later on testified that there were nominations, there is no evidence to prove that the adoption of the status quo resolution done by viva voce vote, was the will of the majority of the voting delegates. It should be noted that registered as well as unregistered delegates were present in the convention hall. There was no way of determining whether the "ayes" and the "nays" votes came from a registered or unregistered delegate. The Minutes of the Special Meeting of the 34th National Directorate held on May 23, 1980, which was presented as evidence by both groups provided for the rules governing the convention and the conduct of the election. Briefly, the rules provided for registration of a voting delegate, nomination of a candidate, written acceptance by the nominee, distribution of ballots to the voting delegates, and counting of votes. The foregoing procedure was not followed in the proceedings. "Sometimes, general statutes, but more commonly the charter of incorporation or articles of association or the constitution and by-laws, control in regard to the appointment or election of officers of beneficial associations, and the person by whom officers are to be appointed or elected. An election is invalid if held without compliance with the requirements of the associated rules and laws governing such matters, and in such a case there should be a new election." (10 CJS 281-282) And even assuming that Tomas T. Nufable was validly elected as National Commander under the status quo resolution, he is disqualified under Section 3, Article VII of the by-laws of the legion which provides that . . . No one shall be elected National Commander for more than a term of one Legion Year; but if he shall have assumed as National Commander by virtue of succession, then he shall be qualified for election as such during the next ensuing regular annual National Convention in his own right. The fourth question to be determined is the legality of the holding of a separate election by the Batilo group. Because the Batilo group felt that the declaration of a status quo resolution was not proper, it moved out of the convention hall followed by a number of legionnaires who wanted to hold the election as scheduled. From a "slot nomination", it also by viva voce elected a set of officers to govern the legion, And similarly, the Batilo group did not follow the rules governing the conduct of the election. llcd It is noteworthy to state that there was only one convention called for to elect the members of the 35th National Directorate. And that convention was the one held at the PVAC Social Hall. "The members when lawfully assembled and presided over by the duly elected officers, may transact any business within the purview of the purpose for which the association is organized, but even a majority of the members cannot act for the association unless lawfully assembled; and they are "lawfully assembled" only when meeting at the proper time and place." (10 CJS 279) and is one case, it has been held: "When certain lodge members assembled at a regular place and time, and, having found door closed and officers absent, elected temporary officers and continued meeting elsewhere, proceedings were invalid." (Lodge No. 1, Trice of Good Timers v. Marvin, 239 N.G. 398, 256 Misc. 359 cited in 10 CJS 274). Going to the last issue, as to who is the legal set of officers for the 35th National Directorate of the Philippine Veterans Legion, Inc., upon a survey of the facts sketched above, and of the by-laws of the legion, the rules governing its convention and election, and of the jurisprudence presented, it is obvious that none of the two contenders is the legal set of officers for the 35th National Directorate. Accordingly, "when no officials of subordinate lodge were legally elected at rival conventions, a new convention should be called." (Di Silvestro v. Sons of Italy Grand Lodge, 222 N.Y.S. 203, 129 Misc. 521 cited in 10 CJS 282). llcd WHEREFORE, (1) it is hereby ordered that a new election be held to elect the members of the National Directorate of the Phil. Veterans Legion, Inc. for the coming legion year as the current one is about to end. (2) Leg. Tomas T. Nufable, and in his absence, Leg. Tomas G. Batilo, in their capacities as national commander and vice-national commander, respectively, of the 34th National Directorate, is hereby directed to call for a national convention for the purpose of electing the members of the 36th National Directorate within fifteen (15) days from receipt of this Decision and to preside over the same. The said national convention shall be under the direct supervision and control of the Commission through the election committee herein created. (3) To assure a fair and orderly conduct of the election, the following committees are hereby created: a) Accreditation Committee composed of three with Atty. Josefina Pasay-Paz, representative of the Securities and Exchange Commission, as chairperson, and one (1) member each from the Nufable group and the Batilo group. The Accreditation Committee shall have the powers to screen and accredit different chapters and posts qualified to participate in the forthcoming election; prepare a list of voting delegates; take charge of the registration of voting delegates and such other powers as may be necessary and incidental to the effective performance of its functions. (b) election Committee composed of three with Atty. Eugenio C. Reyes, representative of the Securities and Exchange Commission, as chairperson and one (1) member each from the Nufable group and the Batilo group. The election committee, in coordination with the National Commander, or in his absence, the Vice-National Commander, of the 34th National Directorate, shall determine the time and place of the election; issue the corresponding notices thereof; conduct the elections itself; and is given such other powers as may be necessary and incidental to the performance of its functions and responsibilities to assure a fair and orderly election. The decision of the aforementioned committees shall be final. Nufable's group and Batilo's group are hereby ordered to submit the names of their nominees to the aforementioned committees within five (5) days from receipt of this decision; otherwise, their failures shall be considered a waiver of their right to membership in said committees and the Commission shall proceed with the appointment of the members to the committees from among the members of the legion. (4) The management committee constituted on August 1, 1980, is hereby directed to extend full assistance to the accreditation and election committees. Said management committee shall be dissolved upon assumption into office of the newly elected members of the 36th National Directorate of the Philippine Veterans Legion, Inc. (5) Further, in order that the Commission will be able to effectively control and supervise the proceedings during the national convention, and to assure a fair and orderly conduct of said proceedings, it is necessary that it will have in its custody and possession all the pertinent records of the legion. For this purpose, Leg. Frisco Afos, Sr. and Tom Y. Gin are hereby directed to turn over to the Commission all the records of the legion in their possession, administrative, financial or otherwise, especially the passbook(s), within three (3) days from receipt of this decision, under penalty of law, which records shall be made available at all times to the election and accreditation committees. SO ORDERED. (SGD.) NATIVIDAD P. QUERIJERO Hearing Officer Securities Investigation and Clearing Department