Fidencia Aldaba, et al. vs. Rev. Osias Marasigan, et al.

[SEC-SICD * CASE NO. 2223. January 7, 1988.] FIDENCIA ALDABA, ET AL. , petitioners , vs .REV. OSIAS MARASIGAN, ET AL. , respondents . D E C I S I O N This is an intra-corporate controversy, the opposing parties being members of "IGLESIA EVANGELICA ESPIRITISTA, INC." a religious, non-stock corporation based in Caloocan City and registered with the S.E.C. way back in 1963. cdll After the death of director general Inocencio Zulueta in 1973, the three respondents namely, Conrado Zulueta, Osias Marasigan and Alfredo Mendiola, Superintendent, Secretary and Treasurer, respectively, appear to have been in control of the corporation up to the present. The growing strained relationship between the party litigants heightened by petitioners' suspension, demotion and eventual expulsion, following futile attempts by petitioners to examine the corporate books and their repeated demand for an accounting by respondents erupted in open hostility when in 1982, the nine petitioners filed this instant petition against the three respondents and prayed that judgment be rendered: 1. "Enjoining the respondents from performing or exercising duties of the officers they claim to be and in the meantime, during the pendency of the case, a restraining order be issued prohibiting the respondents to perform/exercise such duties; 2. Compelling the members of the Church (Iglesia Evangelica Espiritista, Inc.) to call and hold an election under the supervision of the Honorable Commission; 3. Declaring the previous Board of Directors and Officers as not having been duly elected and constituted and their acts/actuations and decisions, null and void and no force and effect; 4. Compelling the respondents to have the Books of Accounts of the Church (Iglesia Evangelica Espiritista) from 1973 to 1981 inspected and audited." The above reliefs sought by petitioners are based mainly on three causes of action, among others, to wit: 1. "That since 1973 up to 1982, there were no elections of the Board of Directors and Officers held and that no financial reports of the church were submitted to the so-called General Conference ...although complainants came to know last August 1981 that respondents filed/submitted with the Honorable Commission reports of the alleged results of election of the Board of Directors and Officers of the Church and the financial status to have been submitted up in a general conference. 2. That from the time that complainants have been inquiring into the funds and demanding the inspection of the books of accounts of the Church, respondents have been resorting to suspending some of the complainants without due investigation and confrontations and lately, Rev. Zulueta has been harassing the complainants. 3. That complainants have been repeatedly demanding verbally and in writing for the inspection and auditing of the books of accounts of the church from 1973 to 1981, but respondents failed and refused and still fail and refuse to have the Books of Accounts inspected and audited." Articulating on the three causes of action, petitioner Aldaba on direct examination testified: "there were no elections from 1973 to 1981" yet "I found out that I was a member of the board of directors from 1977 to 1981," as she denied having been a candidate for the board of directors. She went on to say that she "has never been invited to any meeting of the board of directors for 1977, 1978, 1979 and 1980" nor has "she ever been apprised or informed that she was elected as a member of the board for the said period." (TSN, September 15, 1982, pp. 31, 32 and 33). On the second cause of action, i.e.,complainants were suspended, demoted and expelled without due investigation and confrontation, petitioner Aldaba testified thus: "there were no hearing, yet, according to the doctrine of the church the complaint should be written by the complainant and signed by two witnesses and sent to the general superintendent who shall organize the Court of Appeals composed of three members." "This, says petitioner, "has not been followed." Elaborating on the third cause of action regarding respondents' refusal to allow petitioners to inspect and audit the books of accounts, Fidencia Aldaba stated: Q To whom did you make such demands? A Rev. Moises Marasigan who is our superintendent ...so with our general treasurer who is Pastor Alfredo Mendiola. Q Was there any response to that demand of yours? A They ignore our demands. Q What did you do when they ignored your demands? A We tried to make written request for them to supply the statement of accounts. Q To whom did you give this letter? A It was given to Rev. Marasigan, one to Pastor Mendiola in the presence of Rev. Zulueta. Q Where? A In the church, Sir. Q Now, do you remember what action, if any, did the person to whom you made first the verbal demand? A There was no action taken so we filed a complaint in the Securities and Exchange Commission. Copy of the demand letter has been submitted and offered in evidence by the petitioners. The other petitioners who are all similarly situated made practically the same testimony, each and everyone giving corroborative statements. As may be expected, the respondents disputed all of petitioners' causes of action by countering: "that is not true, Sir, because every year we are holding conference either general or annual," which means annual meeting of members and the Board of Trustees. To reinforce this claim xerox copies of the election results together with the Secretary's Certification thereof as well as copies of the corporation's F/S from 1973 to 1981 have been submitted by respondents. In an effort to justify the expulsion of petitioners as members of the religious corporation, respondent Zulueta said that at first petitioner Aldaba had been suspended for not following church regulation like the wearing of uniform in going to church and failure to attend the "candle ceremony" which according to respondent, led to the eventual expulsion of petitioner Aldaba after making a house-to-house campaign and intimidating other members to affiliate with her in her cause. For this, says respondent Zulueta, petitioner was issued an order for her expulsion "for being insubordinate and rebellious." This is justifiable because "it is being done and ordained by the Holy Spirit. So we follow the "order" of the spirit and not the blue book and that system of suspension was being carried throughout the church and not what was written in the bluebook" respondent Zulueta added. To be sure, copies of the result of the 1973 to 1981 membership meetings and directors' meeting, duly certified by the secretary and marked in evidence for the respondents are proof enough to show that meetings were held during this period. However, failure of respondents to give notice of the meetings to petitioners is indubitably in violation of the latter's basic and fundamental right as member of the organization. This violation coupled with the fact that the three respondents managed to hold on to their position as top ranking officers for almost ten successive years seems to lend credence to petitioners' apprehension that respondents were really bent on perpetuating themselves in power no matter what. But assuming this to be true, the fact remains that respondents have in fact been running and/or conducting the corporate affairs of the religious organization during this period, and as such, they deserve some kind of recognition one way or another. As regards the issue whether petitioners' suspension, demotion and expulsion were valid and justifiable as contended by respondent or arbitrary and a denial of one's right to be heard as claimed by petitioners, we would like to think that petitioners' claim to the effect that they have been denied of their right to be heard as provided for in the by-laws and church doctrine is meritorious. The manner of suspension and expulsion within the context of the by-laws which requires notice and hearing is in keeping with democratic principle, corporate practice and tradition, since time immemorial. After all the respondents admitted that they always "follow the command or order of the Holy Spirit" instead of the by-laws and church doctrine of the corporation. On the other hand, conducting corporate affairs through orders emanating from the "Holy Spirit is not only unfamiliar, it tends to create a one-man rule system and thus encourages abuse of power leading to the proliferation of similar lawsuits. Respondents' contention that petitioners' suspension and expulsion is justifiable as "it is being done in accordance with the order of the Holy Spirit ..." literally sounds hollow, as it is a mere ploy aimed to discredit petitioners' earlier testimony that "there was no hearing," respondents having failed to observe the procedure on suspension and/or expulsion as contemplated in the by-laws of the corporation. With respect to respondents' refusal to allow petitioners to inspect and examine the books and records of the corporation, this issue has become academic by respondents' admission that indeed petitioners are entitled to this right as long as they (petitioners) remain members of the corporation. In the light of the foregoing, judgment is hereby rendered as the Commission finds: That the 1973 to 1981 annual meeting and the resultant election thereof as having been improperly called and held no notice of meeting having been given to petitioner and therefore legally unacceptable but nevertheless recognizing as de facto the elected directors and officers including the respondents herein in a hold-over capacity, invested with authority to perform and exercise the normal duties and responsibilities accruing to the position, until their successors shall have been elected and qualified; Corollary to this, the Superintendent and/or the person concerned is hereby directed to call a meeting within thirty days from receipt of a copy of this "DECISION" for the purpose of electing a new set of directors and officers after giving notice to the members in accordance with the provision of the Corporation Code. That the petitioners' suspension, demotion and expulsion as members of the corporation to have been carried in an arbitrary manner, the petitioners having been denied the opportunity to be heard and to present their side in a proper forum, pursuant to the by-laws, doctrine and discipline of the religious organization. Petitioners are thus entitled to all the rights and privileges of a bona fide member, including the right to demand for an accounting of corporate funds, assets and property and to examine and inspect, during reasonable hours, all corporate books and records and to copy excerpts thereof when necessary. (SGD.) BERNARDO T. ESPEJO Hearing Officer