Araneta Alumni Association, Inc. v. Gregorio Araneta University Foundation

[SEC-SICD * CASE NO. 4186. March 28, 1994.] ARANETA ALUMNI ASSOCIATION, INC. , petitioner , vs . GREGORIO ARANETA UNIVERSITY FOUNDATION, ET AL. , respondents . D E C I S I O N This is a petition filed by Araneta Alumni Association, Inc. (Alumni for brevity), seeking to declare the election of Manuel D. Punzal as President of Gregorio Araneta University Foundation (GAUF for brevity) for 1991 null and void, and for him (Mr. Punzal) to immediately vacate the position, and desist from performing the duties and functions appertaining to the questioned position. LLphil In support thereof, petitioner alleged, inter alia, that Araneta Alumni Association, Inc. is a non-stock corporation, duly organized and existing under and by virtue of the laws of the Republic of the Philippines, represented by its President Tony U. Yu; that respondent Gregorio Araneta University Foundation, Inc., is likewise, a non-stock corporation organized under the laws of the Philippines, while respondent Rev. Fr. Miguel Varela is its Co-Chairman of the Board of Trustees, and other respondents are members of the Board; that in compliance with the Writ of Execution issued by this Commission in SEC Case No. 3505, the members of the GAUF held meeting on July 18, 1991 to elect the members of the Board of Trustees; that one of the officers who was elected is Mr. Manuel D. Punzal as President of GAUF that Mr. Punzal was not elected as a trustee; that not being a trustee, he is not qualified for election as President of the GAUF; Respondents filed a Motion to Dismiss on March 19, 1992 on the ground that "the complaint state no cause of action." They further averred that the present petition to annul the election of GAUF's President and to direct him to vacate his position is in the nature of a quo warranto proceeding; that the petitioner must aver, and must be able to show that he is entitled to the office in dispute; that without such averment or evidence of such right, the action may be dismissed at any stage (Garcia vs. Perez, G.R. No. L-28184, September 11, 1980); that an examination of the petition reveals that no allegation was made by the petitioner that anyone other than Mr. Manuel Punzal is entitled to the position of President; that petitioner does not claim any right to the position of President; that the bare allegation that Mr. Punzal is not a trustee does not justify a nullification of his election as President; that there is no law that requires the President of a non-stock corporation to be a member of the corporation as a pre-condition for his election; that neither is there an allegation in the complaint that the same is required by respondent's by laws. LLphil On October 21, 1992, an Order was issued deferring the resolution on the respondent's Motion to Dismiss as well as petitioner's Opposition thereto until after the case is heard on the merits. Respondents in their answer, denied the material allegations of the petition and averred, among other things, that at the time of his election as President of GAUF on July 18, 1991, Mr. Manuel Punzal had long been nominated by His Excellency President Fidel V. Ramos as a member of GAUF (Annex "A" of the answer); that the failure of the minutes to specify the same does not affect the validity of his election as President of GAUF; that in the Board Meeting of September 24, 1991, the nomination of Mr. Punzal by Pres. Fidel V. Ramos was made of record and he was again elected as President by unanimous vote of all the members present, and this is well reflected in the minutes of the Board meeting held on September 4, 1991; that this render moot and academic all the objections raised by the petitioner on the election of Mr. Manuel Punzal as President of GAUF; and that the present complaint to annul the election of Mr. Punzal is in the nature of a quo warranto proceeding; that it is a basic requirement in this type of action that the petitioner must aver that he is entitled to the office in dispute, otherwise, the complaint must be dismissed (Garcia vs. Perez, G.R. No. L-28184, September 11, 1980). On November 17, 1992, an Order was issued directing the parties to submit their respective preliminary conference briefs and setting the case for preliminary conference. By agreement of the parties and as culled from the records and pleadings submitted by them, the issues to be resolved in this case are: (1) Whether or not the election of Mr. Manuel D. Punzal on July 18, 1991, as President of the GAUF is null and void? (2) Whether or not the petition has become moot and academic by virtue of the subsequent election of Mr. Punzal as President on September 4, 1991. LLphil At the hearings on February 23, 1993, the parties agreed to submit the case for decision based on the pleadings filed and position papers to be submitted by them. On March 22, 1993, the respondents filed their position paper while the petitioners filed theirs on April 2, 1993. Evidence adduced by the parties established that at the time of election of Mr. Punzal on July 18, 1991 as president of GAUF, he was not yet elected as trustee of GAUF. This is clear from the minutes of the special meeting of the members of GAUF held on July 18, 1991 (Exhibit "C"), which state, among other matters, to wit: xxx xxx xxx III. ELECTION OF MEMBERS OF THE GAUF BOARD OF TRUSTEES "The body then proceeded to the matter of election. Nine (9) members of GAUF were nominated to its Board of Trustees. Senator Leticia Ramos Shahani, Mr. Oscar Josef and Mr. Jose Segovia were nominated by visitator Mrs. Ma. Victoria Araneta-Concepcion while Sister Luz Emmanuel Soriano, Fr. Miguel Varela and Brother Rolando Dizon were nominated by visitator Cardinal Jaime Sin. Mrs. Nora Inciong and Brother Andrew Gonzales were nominated by the then Secretary of Defense Fidel V. Ramos. Mr. Jose M. Manglicmot was the nominee of the Alumni Association." "The election of members of the Board of Trustee was done by secret balloting and was witnessed by the two (2) SEC representatives, namely: Atty. Inocencio D. Pagalaran and Atty. Elpidio S. Salgado. The following was the result of the election: NOMINEES NO. OF VOTES GARNERED 1. Fr. Miguel Varela 5 votes 2. Bro. Rolando Dizon 6 votes 3. Sis. Luz Emmanuel Soriano 6 votes 4. Mr. Jose Geqovia 6 votes 5. Mr. Oscar Josef 4 votes 6. Sen. Leticia Ramos-Shahani 5 votes 7. Mrs. Nora Inciong 5 votes 8. Bro. Andrew Gonzales 6 votes 9. Mr. Jose M. Manlicmot, Jr. 1 votes It follows, therefore, that Mr. Manuel D. Punzal not being one of the nine (9) members of GAUF nominated for election to the Board of Trustees, he did not receive a vote, and for all intents and purposes, he is not a trustee in contemplation of law. Under the law, the qualification for the President is that he must be a director or trustee (Section 25, B.P. Blg. 68) and no person shall be elected as trustee unless he is a member of the corporation. (Section 92, B.P. Blg. 68). And, while the Corporation Code of the Philippines (B.P. Blg. 68) allows a private corporation to provide in its by-laws for the qualification of officers, a perusal of the new by-laws of GAUF on file with this Commission which this Hearing Officer takes judicial notice of, fails to show any other qualification for the president other than that specified in the law: Accordingly, this Hearing Officer finds and so holds that the election of Mr. Manuel D. Punzal on July 18, 1991 as President of the GAUF is null and void because Mr. Punzal was not yet elected as trustee of the GAUF. Anent the second issue: of whether or not the petition has become moot and academic by virtue of the subsequent election of Mr. Punzal as President on September 4, 1991, this Hearing Officer finds strong evidence to sustain the validity of Mr. Punzal's election as President on September 4, 1991, thus rendering this petition moot and academic. The only objection of the petitioner to the election of Mr. Manuel D. Punzal as President of the GAUF is that: Mr. Punzal was not one of the members of the corporation nominated for election to the Board of Trustees. (Page 3, Opposition to Motion to Dismiss, and item 4, page 2, Petition). Petitioner, therefore, by his own allegation, admitted that Mr. Manuel D. Punzal was already a member of the GAUF but he was not nominated for election to the Board of Trustees in the election held on July 18, 1991. The Articles of Incorporation of the GAUF provides that, to become a member one must be nominated by one of the visitators named in the Articles of Incorporation. As aptly pointed out by the respondents, His Excellency President Fidel V. Ramos was explicitly named by his father, Visitator Narciso Ramos, as his successor, and as such he was accorded the right and privilege to nominate three (3) members of the GAUF. The pertinent provisions of the Articles of Incorporation of the GAUF is hereunder quoted: "SECTION 2. Visitators . The Archbishop of Manila, Narciso Ramos and Salvador Araneta are designated as Visitators of the Corporation. Narciso, Ramos and Salvador Araneta shall have the power to appoint their respective successors who shall in turn, have the power to appoint their own successors. Unless expressly made herein, the appointment of a successor shall be made in writing and duly filed and recorded with the Corporate Secretary or in a last will and testament. In case a Visitator fails to name a successor, the remaining Visitators or Visitator shall make the designation. Narciso Ramos has named his son, Fidel V. Ramos, as his successor. Salvador Araneta has likewise designated his daughter, Ma. Victoria Araneta Concepcion, as his successor. A successor shall automatically become Visitator with all the rights, duties and prerogative thereunto appertaining, upon the death or permanent disability of his predecessor. He shall have the right to assume such rights, duties and prerogatives in his absence in the Philippines. SECTION 3. Powers and Functions of Visitators . A Visitator shall have the following powers, functions and prerogatives: (a) Subject to pertinent provisions of the Articles of Incorporation, to nominate 3 members of the corporation who shall become nominees for the election of the members of the Board of Trustees. In the first appointments of the members of the Board of Trustees under this new by-laws, there will be ten (10) members. One (1) shall serve for four (4) years. Another shall serve for three (3) years and the third shall serve for two (2) years, such that the term of one-third of the totality of the elected members shall expire every year. Nomination and election to fill up a vacancy occasioned by death, resignation or disability shall be for the unexpired term of the member being replaced; SECTION 4. President . The President shall be elected by the Board of Trustees ." (emphasis supplied). On May 2, 1991, or long before the July 18, 1991 election, President Fidel V. Ramos nominated Mr. Manuel Punzal as a member of the GAUF. This is evidence by his letter dated May 2, 1991 (Exhibit 2). During the preliminary conference, the petitioner admitted the genuineness and due execution of this letter, to wit: "Atty. Bilog: We also attached as Exhibit 2 to our Pre-Trial Brief, a letter dated May 2, 1991 signed by President Fidel V. Ramos, I have the original with me. I am showing it to the counsel for the petitioner for comparison as to whether or not it is a faithful reproduction of the original. Atty. Lim: We admit the authenticity, your Honor. Atty. Bilog: How about the existence of the documents? Atty. Lim: Yes, your Honor, we admit." (T.S.N. of February 23, 1993, p. 18). Records also show that at the special meeting of the members of the GAUF held on September 4, 1991, the nomination of Mr. Punzal by President Fidel V. Ramos as a member of the corporation was made of record and he was thereafter elected as a member of the Board of Trustees and President of the GAUF for a term of three (3) years, 1991 to 1994. The existence of this document was also admitted by the petitioner during the preliminary conference, to wit: "Atty. Bilog: Exhibit 1 which is attached to our Pre-Trial Brief is the minutes of the meeting Held on September 4, 1991 at 5:00 P.M. signed by all the members of the Board of Trustees. I furnished a copy to counsel for the petitioner. I have here with me the original, may I request counsel to go over the same and tell us if it is a faithful reproduction of the copy which we submitted as Exhibit 1 to this Honorable Commission? Atty. Lim: We admit the existence only of the document, your Honor." (T.S.N. of February 23, 1991, pp. 16-17). WHEREFORE, premises considered, Decision is hereby rendered: (a) Denying the respondents' Motion to Dismiss; (b) Declaring that the election of Mr. Manuel D. Punzal on July 18, 1991 as President of GAUF null and void, and (c) Declaring that this petition has now become moot and academic by virtue of subsequent election of Mr. Manuel D. Punzal as President of GAUF on September 4, 1991. No pronouncement as to costs. SO ORDERED. (SGD.) ELPIDIO SARMEN SALGADO Hearing Officer