Barayuga v. Adventist University of the Philippines

G.R. No. 168008, 17 August 2011

FACTS:

AUP, a non-stock and non-profit domestic educational institution incorporated under Philippine laws, was directly under the North Philippine Union Mission (NPUM) of the Southern Asia Pacific Division of the Seventh Day Adventists. During the 3rd Quinquennial Session of the General Conference of Seventh Day Adventists, the NPUM Executive Committee elected the members of the Board of Trustees of AUP, including the Chairman and the Secretary. Respondent Nestor D. Dayson was elected Chairman while the petitioner was chosen Secretary.

Almost two months following the conclusion of the 3rd Quinquennial Session, the Board of Trustees appointed the petitioner President of AUP.

During his tenure, a group from the NPUM conducted an external performance audit which revealed the petitioner’s autocratic management style, like making major decisions without the approval or recommendation of the proper committees, including the Finance Committee; and that he had himself done the canvassing and purchasing of materials and made withdrawals and reimbursements for expenses without valid supporting receipts and without the approval of the Finance Committee. The audit concluded that he had committed serious violations of fundamental rules and procedure in the disbursement and use of funds.

In a special meeting, the members, by secret ballot, voted to remove him as President because of his serious violations of fundamental rules and procedures in the disbursement and use of funds as revealed by the special audit; to appoint an interim committee consisting of three members to assume the powers and functions of the President; and to recommend him to the NPUM for consideration as Associate Director for Secondary Education. The Board of Trustees denied the petitioner’s request for reconsideration because his reasons were not meritorious.

The petitioner brought his suit for injunction and damages in the RTC, with prayer for the issuance of a TRO alleging that the Board of Trustees had relieved him as President without valid grounds despite his five-year term; that the Board of Trustees had thereby acted in bad faith; and that his being denied ample and reasonable time to present his evidence deprived him of his right to due process.

RTC granted the petitioner’s application for a writ of preliminary injunction. CA nullified the RTC’s writ of preliminary injunction ruling that the petitioner’s term of office had expired two years from his appointment, based on AUP’s amended By-Laws; that, consequently, he had been a mere de facto officer appointed by the members of the Board of Trustees; and that he held no legal right warranting the issuance of the writ of preliminary injunction.

ISSUE:

Whether the CA correctly ruled that the petitioner had no legal right to the position of President of AUP that could be protected by the injunctive writ issued by the RTC.

RULING:

We deny the petition for review for lack of merit.

The petitioner’s assertion of a five-year duration for his term of office lacked legal basis.

Section 108 of the Corporation Code determines the membership and number of trustees in an educational corporation, viz:

Section 108. Board of trustees. – Trustees of educational institutions organized as educational corporations shall not be less than five (5) nor more than fifteen (15): Provided, however, That the number of trustees shall be in multiples of five (5).

Unless otherwise provided in the articles of incorporation or the by-laws, the board of trustees of incorporated schools, colleges, or other institutions of learning shall, as soon as organized, so classify themselves that the term of office of one-fifth (1/5) of their number shall expire every year. Trustees thereafter elected to fill vacancies, occurring before the expiration of a particular term, shall hold office only for the unexpired period. Trustees elected thereafter to fill vacancies caused by expiration of term shall hold office for five (5) years. A majority of the trustees shall constitute a quorum for the transaction of business. The powers and authority of trustees shall be defined in the by-laws.

For institutions organized as stock corporations, the number and term of directors shall be governed by the provisions on stock corporations.

The second paragraph of the provision, although setting the term of the members of the Board of Trustees at five years, contains a proviso expressly subjecting the duration to what is otherwise provided in the articles of incorporation or by-laws of the educational corporation. That contrary provision controls on the term of office.

In AUP’s case, its amended By-Laws provided that the members of the Board of Trustees were to serve a term of office of only two years; and the officers, who included the President, were to be elected from among the members of the Board of Trustees during their organizational meeting, which was held during the election of the Board of Trustees every two years. Naturally, the officers, including the President, were to exercise the powers vested by Section 2 of the amended By-Laws for a term of only two years, not five years.

Ineluctably, the petitioner, having assumed as President of AUP on January 23, 2001, could serve for only two years, or until January 22, 2003. By the time of his removal for cause as President on January 27, 2003, he was already occupying the office in a hold-over capacity, and could be removed at any time, without cause, upon the election or appointment of his successor. His insistence on holding on to the office was untenable, therefore, and with more reason when one considers that his removal was due to the loss of confidence on the part of the Board of Trustees. The removal of the petitioner as President of AUP, being made in accordance with the AUP Amended By-Laws, was valid.

*Case Digest by Legine S. Ramayla, JD-IV, Andres Bonifacio College, SY: 2019-2020

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