Andaya v. Board of Trustees and Chairman, Members of Membership Committee of AFPSLAI

[SEC-SICD * CASE NO. 4433. January 23, 1995.] NOE S. ANDAYA , petitioner , vs . THE BOARD OF TRUSTEES AND CHAIRMAN, MEMBERS OF MEMBERSHIP COMMITTEE OF AFPSLAI , respondents . D E C I S I O N In this petition filled with this Commission, petitioners prayed for the issuance of a temporary restraining order and a writ of preliminary injunction, enjoining all respondents from implementing the alleged expulsion of petitioner as member of the Armed Forces and Police Saving and Loan Association, Inc. (AFPSLAI for brevity), and declaration of the expulsion of petitioner as null and void. LLphil On April 5, 1993, an Order was issued by this Hearing Officer setting the petitioner's application for a writ of Preliminary Injunction for hearing on April 14, 1993. On April 23, 1993, after several hearing, an Order was issued denying the petitioner's application for a writ of Preliminary Injunction. On April 27, 1993, respondents filed their answer dated April 27, 1993. On May 6, 1993, petitioner filed a Motion for Reconsideration dated May 3, 1993 to the Order denying his application for a writ of Preliminary Injunction. On May 16, 1993, respondent filed their Opposition dated May 14, 1993 to the petitioner's Motion for Reconsideration with Urgent Motion To Cite for Contempt both petitioner and his counsel. On May 18, 1993 an Order was issued submitting the petitioner's Motion for Reconsideration dated May 3, 1993 to the order dated April 23, 1993 and respondents Motion To Cite petitioner Noe S. Andaya and his counsel for contempt dated May 14, 1993 for resolution. On May 26, 1996, an Order was issued denying petitioners Motion for Reconsideration dated May 3, 1993 to the Order dated April 23, 1993. On June 9, 1993, an Order was issued denying respondent's Motion To Cite for Contempt petitioner Andaya and his counsel on their baseless and malicious statement in petitioner's Motion for Reconsideration dated May 3, 1993 and instead this Hearing Officer opted to admonish the petitioner and his counsel to be circumspect in their language in the future in order to obviate the imposition of severe penalty for contempt of commission. On June 16, 1993, an Order was issued directing the parties to submit their respective preliminary conference briefs after a Motion for Extension of Time to file preliminary conference brief with Motion to reset Preliminary Conference filed by the petitioner was granted by this Hearing Officer. At the preliminary conference held on August 12, 1993, no amicable settlement was reached by the parties. Parties, however, agreed that the issues to be resolved in this case are: 1. Whether or not the expulsion of petitioner as a member of AFPSLAI, Inc., is legal and valid 1.1 Whether or not the Membership Committee was validly constituted? 1.2 Whether or not they have the power to conduct investigation and to act on expulsion of the members? 1.3. Whether or not petitioner was denied due process by the Board and the Membership Committee in expelling him from membership of AFPSLAI, Inc.? 2. Who between the parties is entitled to damage? On September 15, 1993, petitioner Col. Noe S. Andaya manifested that he is adopting his testimony on April 14, 1993 hearing on his application for a writ preliminary of injunction, as well as, his offer of exhibits as his only evidence in the main case. Likewise, respondents manifested at the hearing on November 8, 1993 that they are adopting their evidence adduced during hearing on the petitioner's application for a writ of preliminary injunction as their evidence in the main petition. At the said hearing, the parties also agreed to submit their respective memoranda within twenty (20) days from November 8, 1993, after which the instant case shall be deemed submitted for resolution. A thorough examination of the evidence adduced by the parties disclosed that the series of date and the proceedings taken from the filing of the petitions of some of the members for the removal of petitioner Noe S. Andaya as member of AFPSLAI up to the effectivity date of his termination as member thereof on January 12, 1993, as stated in the petitioner's petition and respondents answer, were not disputed by the parties except those narrated as conclusion of law. LLjur As culled the records, it appear that on November 16, 1992, Col. Jose M. Foronda, in his capacity as Chairman of the Membership Committee of AFPSLAI, wrote a letter to the petitioner informing the latter of a letter-petition from the member of AFPSLAI for his expulsion as member thereof on grounds of acts inimical to the interest and good name and financial stability of AFPSLAI (Exh. A; Exh. 2) The said letter informed the petitioner that on the basis of the sworn declaration and documents submitted by the members, the Membership Committee found that an investigation is in order. The petitioner was requested to appear before the Membership Committee on November 19, 1992, 1:30 p.m. at the 4th Floor, Conference room, AFPSLAI Camp Aguinaldo "to show cause why he will not be expelled as member of the corporation pursuant to Art. XI, Section 2 of its amended by-laws. "The said letter also warned the petitioner that his failure to appear on the date of hearing will be construed that he is waiving his right to be heard and to submit controverting evidence in his behalf. (Exh. 2-A) Petitioner admitted having received the letter of Col. Foronda on November 17, 1992. However, he opted not to appear in the hearing scheduled on November 18, 1992. In his letter dated November 18, 1992, petitioner requested that the investigation be reset to another date after he shall have been provided with a copy of the letter-petition including formal charges against him. (Exh. A-1). In reply to petitioners request, Col. Foronda wrote petitioner a letter dated November 18, 1992 (Exh. B; Exh. 3) and furnishing petitioners with copies of the letter-petitioners and sworn declarations of several members of AFPSLAI (Exhs. 1, 2, 2-A 3, 4, 5) which were the basis for the Membership Committee to conduct a formal hearing and to determine whether said petitions fall within the coverage of Article XI, Section 2 of the amended by-laws of AFPSLAI. In the said letter, the committee enumerated the following acts which transpired during the incumbency of the petitioner as President and General Manager of AFPSLAI which the Committee considered as within the coverage of the above section, to wit: 1. Central Bank findings specifically the ledger discrepancies and a management inability to monitor borrowers loan account that give to substantial past accounts; 2. Criminal case re finder's fee and representation expenses filed by the National Bureau of Investigation with the Quezon City Prosecutor's Office; 3. Criminal information filed by Quezon City Prosecutor's Office with the Regional Trial Court of Quezon City; 4. Excessive overpricing of AFPSLAI building in Baguio City; 5. Extending loans to mediamen who are not members of AFPSLAI. Petitioner was request to appear and submit his written answer and controverting evidence on November 23, 1992 at the same time and venue and was warned again that no further postponement is allowed and that if he fails to appear on said date of hearing will mean that he is waiving his light to be heard and to submit controverting evidence on his behalf. On November 23, 1992, petitioner again wrote a letter to AFPSLAI through Col. Foronda (Exh. B-1) requesting for postponement of the hearing and its resetting to December 15, 1992. In reply thereto, Col. Foronda wrote a letter dated November 23, 1992 (Exh. C, Exh. 4, 4-A) informing the petitioner that the Membership Committee evaluated and carefully studied the charges and documents presented before it. Moreover, petitioner was given "for the last time" the "last chance" to appear on November 25, 1992, same time and same venue, and to submitted his written answer before the membership committee makes its final findings and recommendations. Petitioners was warned that: "if you fail to appear on that said date, the Committee will resolved the matter motu proprio based on the available evidence on hand" Despite the warning, petitioner failed to file an answer. In a letter dated November 25, 1992 addressed to AFPSLAI attention Col. Foronda (Exh C-1), petitioner insisted that the hearing on November 25, 1992 be reset to December 15, 1992 citing as ground there for the pressure of legal work of his counsel. On December 11, 1992, Col. Foronda wrote petitioner (Exh. D, Exh. 5) informing the latter the Membership Committee "on its own has decided to resolve your case based on the available evidence on hand in view of the petitioner continuous failure to appear at the investigation and present its evidence. On January 12, 1993, petitioner received a letter from AFPSLAI corporate secretary, Manolo B. Gorospe dated January 8, 1993 (Exh. E. Exh. 6) informing him "that the Board of Trustees, in its meeting on December 17, 1992, adopted the findings of the membership committee that you have committed acts and/or commission inimical to the interest, good name credit standing of the association, and seriously impaired/affected the financial stability of the association and approved the recommendation for your expulsion as a member of the association effective upon receipt of this notice." On January 13, 1993, petitioner wrote AFPSLAI (attention Manolo B. Gorospe, JAGS, Corporate Secretary) requesting for a copy of the findings of the membership committee and its recommendation as well as a copy of the resolution of the Board of Trustees dated December 17, 1992. (Exh. F). In the same letter, petitioner sought reconsideration "on grounds of jurisdiction, violation of By-Laws, due process and others . . . ." On February 15, 1993, corporate secretary Manolo B. Gorospe informed petitioner that "the Board of Trustees in its meeting on February 2, 1993 resolved to approve your request but limited only to the copy of the Board Resolution expelling you from AFPSLAI membership."(Exh. G; Exh. 7) In a letter dated February 19, 1993, petitioner reiterated his request for reconsideration that he be furnished with a copy of the findings of the membership committee (Exh. G-1). In reply thereto, Corporate Secretary Manolo Gorospe informed petitioner that his request was denied by the AFPSLAI Board but furnished him with copies of Board Resolution Nos. 93-002-026 and 92-012-138 (Exhs. H-1, H-2; Exh. 8-A, 8-B). After a through evaluation of the evidence adduced by the parties this Hearing Officers finds and so hold that the petitioner's expulsion as member of AFPSLAI effective January 12, 1993 for acts inimical to the interest, good name and financial stability of the corporation is legal and valid. It must be emphasized that AFPSLAI is a non-stock corporation. Termination of membership in a non-stock corporation is governed by Section 91 of Batas Pambansa Blg. 68 otherwise known as Corporation Code of the Philippines, to wit: "SECTION 91. Termination of Membership . Membership shall be terminated in the manner and for the cause provided in the articles of incorporation or the by-laws . Termination of membership shall have the effect of extinguishing all rights of a member in the corporation or in its property, unless otherwise provided in the articles of incorporation or the by-laws." (Emphasis supplied) Under the amended By-Laws of AFPSLAI (duly approved by this Commission on January 13, 1992), the expulsion of a member is provide for under Section 2, Article XI thereof, to wit: "SECTION 2. Expulsion . Any member may be expelled from the Association if he is convicted of any crime involving moral turpitude or graft and corruption by final judgment; for any act inimical to the credit and good name and financial stability of the Association . An expelled member shall not be deprived of his right to reimbursement of his capital contribution deposits or dividends, and interest due , if any, on the date of expulsion after deductions of all his existing obligations to the Association." (Emphasis supplied) There is no evidence presented which shows that petitioner ever questioned the grounds for his expulsion as provided in the by-laws of AFPSLAI, much less the sworn letters-petitions of several members calling for petitioner's expulsion. Petitioner feign no ignorance on the Central Bank's examination findings detailing massive irregularities during his incumbency as AFPSLAI President or on the filing by the Prosecutor's Office of criminal cases for estafa against him because he was aware of these. What petitioner was complaining was the validity of the constitution of the Membership Committee or its authority to investigate and to recommend his expulsion as member, or the supposed violation of right to due process. It is not disputed that the Board of Trustees of AFPSLAI which ultimately approved petitioner's expulsion as member thereof validity exercised its power and discretion. And this Commission should not interfere with the right of AFPSLAI thru its Board of Trustees to accept members and/or terminate any of its members as it did to herein petitioner. "Otherwise that would be an unwarranted and undue interference with the well established right of a corporation to determine its membership." (Chinese Young Men's Christian Association of the Philippine Islands vs. Ching, G.R. No. L-36929, June 18, 1976). At the outset of the investigation, petitioner did not question the constitution of the membership committee neither did he resist the authority of the said committee to conduct the Investigation, Petitioner, by his acts of participation in the proceedings as shown in his various letter of postponement of hearing, requesting for copies of documents or motion for reconsideration has admitted the valid constitution and authority of the membership committee. Petitioner is already estopped, at this point of time, from questioning the constitution and authority of the membership committee. After voluntarily submitting a cause of and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. (Marquez vs. Secretary of Labor, G.R. No. 80685, March 16, 1989). At any rate, the task of the membership committee was to determine whether or not petitioner indeed committed acts inimical to the interest, good name and financial stability of the AFPSLAI. The action of the membership committee was purely fact-finding and recommendatory. The final action, however, rest with the AFPSLAI Board of Trustees, whose authority and jurisdiction to terminate a member was never questioned by petitioner. Finally, petitioner claimed that he was denied due process of law. This Hearing Officer is not impressed. The above narrated sequence of events negate the claims of the petitioner. Petitioner however, opted to delay the proceedings, by requesting repeated postponements of the hearings on flimsy grounds such as the pressure of legal work of counsel, etc. It must be stressed that fact finding on expulsion proceeding is not an administrative investigation which indespensably requires the services of counsel. Petitioner could have filed its explanation or answer to the petitions. But from November 16, 1992 up to January 7, 1993, before petitioner was expelled, petitioner was directed to appear in the hearing or to file a written answer or explanation with repeated warnings that its failure would be considered as waiver of its right to be heard. Petitioner not only refuse or failed to appear, he did not file any written answer or explanation. Petitioner cannot complain now of a denial of due process when it was accorded the chances to explain its side by the membership committee. Due process in administrative proceedings requires only an opportunity to be heard, not a formal hearing. (Mutuc vs. Court Appeals, G.R. No. 48108, September 26, 1990). For insufficiency of evidence , respondents claim for damages should be, as it is hereby, denied due course. WHEREFORE, premises considered, Decision is hereby rendered declaring that the expulsion of petitioner as a member of AFPSLAI effective January 12, 1993 pursuant to the Board of Trustees Resolution No. 92-012-138 dated December 17, 1992 is legal and valid. No pronouncement as to costs. SO ORDERED. (SGD.) ELPIDIO S. SALGADO Hearing Officer