G.R. No. 184088 – IGLESIA EVANGELICA METODISTA EN LAS ISLAS FILIPINAS (IEMELIF), Inc., Petitioner, v. BISHOP NATHANAEL LAZARO, ET AL., Respondents.

 

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SEPARATE CONCURRING OPINION

 

 

CARPIO, J.:

 

 

         I concur in the result of the majority opinion that IEMELIF, a corporation sole, may be converted into a corporation aggregate by a mere amendment of its articles of incorporation.  However, I maintain that the amendment can be effected by the corporation sole without the concurrence of two-thirds of the members of the religious denomination, sect or church that the corporation sole represents.

 

         Section 110 of the Corporation Code[1] defines a corporation sole as one formed by the chief archbishop, bishop, priest, minister, rabbi or other presiding elder of a religious denomination, sect or church for the purpose of administering and managing, as trustee, the affairs, property and temporalities of such religious denomination, sect or church.  It is a special form of corporation designed to facilitate the exercise of the functions of ownership carried on by the clerics for and on behalf of the church which is regarded as the property owner.[2]

 

         As its designation implies, a corporation sole “consists of a single member.”[3]  It consists of one person only, and his successors (who will always be one at a time) in some particular station, incorporated by law to be given some legal capacities and advantages, particularly that of perpetuity, so that the successor becomes the corporation on the person’s death or resignation.[4]  

 

         A corporation aggregate, on the other hand, is a religious corporation composed of two or more persons.[5]  The creation of a corporation aggregate or religious society is sanctioned by Section 116 of the Corporation Code.

 

         To convert a corporation sole to a corporation aggregate is to increase corporate membership from one to two or more, and to transfer the duties of administering and managing the affairs, properties and temporalities of the religious entity, from one to several trustees. I agree with the majority opinion that the conversion can be done through a mere amendment of the articles of incorporation of the corporation sole.  No dissolution of the corporation is necessary.  The resulting changes from such a conversion, carried out in accordance with law, will not affect the corporation’s responsibilities to third parties.

        

         The majority opinion, however, holds that the amendment of the articles of incorporation can be executed by the corporation sole, albeit with the concurrence of at least two thirds of the members of the religious entity. 

 

         I do not subscribe to this view.

 

         First, Section 110 of the Corporation Code provides that a corporation sole administers and manages, as trustee, the affairs, properties and temporalities of the religious denomination, sect or church.  As a trustee, a corporation sole can exercise such corporate powers as maybe necessary to carry out its duties of administering and managing the affairs, properties and temporalities of the religious organization, provided that such powers are not inconsistent with the law and the Constitution. One of the powers authorized under Section 36 of the Corporation Code is the power to amend the articles of incorporation.[6]

 

         Second, as pointed out in the majority opinion, Section 109 of the Code allows the application to religious corporations of the general provisions governing non-stock corporations, insofar as they may be applicable. The lack of specific provision on amendments of articles of incorporation of a corporation sole calls for the suppletory application of relevant provisions on non-stock corporations.  Thus, Section 16 of the Code applies, to wit:

 

Sec. 16.  Amendment of Articles of Incorporation. Unless otherwise prescribed by this Code or by special law, and for legitimate purposes, any provision or matter stated in the articles of incorporation may be amended by a majority vote of the board of directors or trustees and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, without prejudice to the appraisal right of dissenting stockholders in accordance with the provisions of this Code, or the vote or written assent of at least two-thirds (2/3) of the members if it be a non-stock corporation.

 

x  x  x    (Italics supplied)

 

 

         The majority opinion holds that applying the above provision, amendment can be made by the corporation sole with the concurrence of at least two-thirds of the members of the religious organization it represents.

 

         I do not agree.  Section 16 requires the majority vote of the board of trustees and the vote or written assent of at least two-thirds of the members of a non-stock corporation.  Applying this, a corporation sole, as the lone trustee and member of the corporation, can amend its articles of incorporation.  

 

         Section 16 refers to the members of the corporation.  Again, in the case of a corporation sole, there is only one member—the chief archbishop, bishop, priest, minister, rabbi or presiding elder—who is also the trustee of the corporation.

 

         The religious denomination, sect or church represented by the corporation sole has members who are distinct and different from the member of the corporation sole.  The members of the religious organization should not be considered for purposes of Section 16.  Thus, the votes of those members are not necessary in amending the articles of incorporation of the corporation sole, the vote of the latter being sufficient in effecting the amendment.

 

         It bears emphasizing that once the conversion from corporation sole to corporation aggregate is perfected, the provisions of the Corporation Code specifically designed for a corporation sole cease to apply to the corporation aggregate, and the latter shall be governed by the relevant provisions on non-stock or even stock corporations.[7] 

 

         For instance, the rules on the sale of properties of a corporation sole are governed by Section 113 of the Code.[8]  The corporation sole may sell or mortgage real properties held by it in accordance with the rules, regulations and discipline of the religious denomination, sect or church concerned.  It is only in the absence of such rules that court intervention becomes necessary, and real properties are sold or mortgaged by obtaining an order from the Regional Trial Court of the province where the property is situated.  On the other hand, the sale or other disposition of all or substantially all of the properties and assets of a corporation aggregate shall be governed by Section 40 of the Code which applies to stock and non-stock corporations. Under this section, the sale, lease, exchange, mortgage, pledge or disposition of all or substantially all of the properties and assets of the corporation may generally be done through a majority vote of its board of trustees, and the vote of at least two-thirds of its members in a members’ meeting duly called for that purpose. Hence, unlike in the case of a corporation sole, a corporation aggregate may not apply its own rules, regulations and discipline in selling all or substantially all of its properties, as this process shall be governed by secular principles and rules of law.

 

          Accordingly, I vote to DENY the petition.

 

 

 

 

 

 

                                      ANTONIO T. CARPIO

                                                                        Associate Justice


[1]                              Batas Pambansa Blg. 68.

[2]                              The Roman Catholic Apostolic Administration of Davao, Inc. v. The Land Registration    Commission and the Register of Deeds of Davao City, 102 Phil. 596, 603 (1957).

[3]                      Iglesia Evangelica Metodista En Las Islas Filipinas (IEMELIF), Inc. v. Juane, G.R. Nos. 172447     and 179404, 18 September 2009.

[4]               The Roman Catholic Apostolic Administration of Davao, Inc. v. The Land Registration    Commission and the Register of Deeds of Davao City, supra note 2;  66 Am. Jur. 2d Religious     Societies § 3;  Doe v. Gelineau, 732 A.2d 43 (1999).

[5]                      Iglesia Evangelica Metodista En Las Islas Filipinas (IEMELIF), Inc. v. Juane,  supra note 3.

 

[6]                               Section 36 of the Corporation Code provides: “Every corporation incorporated under this Code        has the power and capacity: x x x  4. To amend its articles of incorporation in accordance with the       provisions of this Code; x x x  11. To exercise such other powers as may be essential or necessary        to carry out its purpose or purposes as stated in the articles of incorporation.”

 

[7]                              Section 87 of the Corporation Code provides that “the provisions governing stock corporations,      when pertinent, shall be applicable to non-stock corporations x x x.”

[8]                              Section 133 of the Corporation Code provides:

 

                Sec. 113.  Acquisition and alienation of property. Any corporation sole may purchase and hold real estate and personal property for its church, charitable, benevolent or educational purposes, and may receive bequests or gifts for such purposes. Such corporation may sell or mortgage real property held by it by obtaining an order for that purpose from the Court of First Instance of the province where the property is situated upon proof made to the satisfaction of the court that notice of the application for leave to sell or mortgage has been given by publication or otherwise in such manner and for such time as said court may have directed, and that it is to the interest of the corporation that leave to sell or mortgage should be granted. The application for leave to sell or mortgage must be made by petition, duly verified, by the chief archbishop, bishop, priest, minister, rabbi or presiding elder acting as corporation sole, and may be opposed by any member of the religious denomination, sect or church represented by the corporation sole: Provided, That in cases where the rules, regulations and discipline of the religious denomination, sect or church, religious society or order concerned represented by such corporation sole regulate the method of acquiring, holding, selling and mortgaging real estate and personal property, such rules, regulations and discipline shall control, and the intervention of the courts shall not be necessary.