The Philippine Canine Club, Inc.
Messrs. Augusto Benedicto Santos, Ronnie Natividad, Eugene Reyes,
Roland Gapus, Emmanuel Santos, Godofredo Salud, and
Emiliano Valdes
Hillcrest Condominium
E. Rodriguez Sr. Blvd., Quezon City
Sirs:
I am writing you not as a former candidate for the Board of Directors, but as a regular member of the Philippine Canine Club, Inc. (PCCI) to put on record my objection to the participation in the last annual general elections of Messrs, Augusto Benedicto Santos III, Ronnie Natividad, Eugene Reyes, Roland Gapus, Emmanuel Santos, Godofredo Salud and Emiliano Valdes (hereinafter collectively referred to as Santos & Co. for convenience), and to ask them to desist from assuming the office or exercising the functions of members of the Board of Directors.
I received a letter from Atty. Jose Sibal that dealt with 2 issues, namely, inspection of the books of PCCI and the eligibility of certain nominees for candidacy as members of the Board. I thought I had no business being involved in his issues with PCCI until I discovered anomalies committed in the conduct of the general membership meeting and election of directors last May 18, 2012.
During the latter part of that meeting I noticed that a copy of the 2003 PCCI By-Laws was inserted in the meeting kit. Piecing this manipulative act together with the fact that there was an unusually large number of members who voted by mail, I got the impression that the membership was deliberately being misled about the governing election rules. I discussed the matter with the PCCI legal counsel who was then present and I pointed out to him that the 2008 By-Laws should have been followed because it is the one that is effective, having been superseded the 2003 By-Laws.
I argued that if the 2008 By-Laws is to be applied, Santos & Co., would be barred from election to the Board having already served two (2) consecutive terms. Surprisingly, he had the opposite view saying that since the case of PCCI (CA vs Judge Hernando, CA-GR SP No. 107516) concerning the implementation of the 2008 By-Laws for the termination of membership of certain PCCI members is not yet fully terminated, the 2003 By-Laws should apply for the purposes of the general membership meeting. If he honestly believed in his position and if he led the ineligible candidates to commit such flagrant disregard of the By-Laws, I would have to say he is dead wrong in serving the interests of individuals whose collective action in inimical to the interest of PCCI. Consider the following:
1. The 2008 By-Laws was duly approved by the Securities and Exchange Commission on August 22, 2008 and effective under the law. (Sec 48, Corporation Code “xxx the amended pr new by-laws shall only be effective upon the issuance by the Securities and Exchange Commission of a certification that the same are not inconsistent with this Code,”) Attached is a copy of the SEC Certificate stating in part that the By-Laws “was approved by the Commission on this date pursuant to the provisions of Section 48 of the Corporation Code of the Philippines xxx.”
2. The 2008 By-Laws has not been superseded.
3. PCCI itself enforced and implemented the 2008 By-Laws in terminating certain members, applying Article VI thereof.
4. The board of directors at that time was composed of the same individuals who are no longer eligible to be in the Broad. They are expected to be fully aware of the provisions pertaining to their own disqualification/ineligibility for having completed their 2 consecutive terms and for initiating the amendment of the 2003 By-Laws.
5. PCCI applied to the letter Article V of the 2008 By-Laws in the conduct of the last general membership meeting and elections of the members of the Board.
6. PCCI defended the validity of the 2008 By-Laws in its pleadings at the Regional Trial Court, Br. 93, Quezon City. It is not PCCI that claims the invalidity of the 2008 By-Laws. On the contrary, PCCI maintained that the 2008 By-Laws was duly passed by the PCCI Board and its membership and approved by the SEC.
7. The Court of Appeals rendered a decision affirming the validity of the 2008 By-Laws stating in part: “At that time, all private respondents have either been expelled or suspended and the amended by-laws was already in full force and effect. Xxx”
This decision of the Court of Appeals simply means that the 2008 By-Laws of the PCCI is valid and effective and for as long as there is a status quo or as long as it is not annulled or declared invalid, the 2008 By-Laws is effective and binding and should be applied by PCCI, which it actually did in that case.
PCCI cannot apply the 2008 By-Laws and seek refuge under it to expel members in December 2008 and then use the superseded 2003 By-Laws in the general membership meeting of 2012. This is not only illegal but insulting to common legal sense. If this is allowed to happen, PCCI would have no established rules and would not be legally operating as a corporate entity. As it is, Santos & Co. was intended to unduly favor these individuals who are trying to cling to the office for which they have become ineligible and disqualified.
Santos & Co. cannot invoke the 2003 By-Laws as applicable to the conduct or process of the nomination and elections for the 2012 directors because they themselves know of their ineligibility under the 2008 By-Laws the adoption of which they themselves initiated as directors at that time. The act, therefore, of inserting the 2003 By-Laws in the election kit smacks of pure misrepresentation designed to distort the election process.
A corporation is governed by it’s By-Laws particularly in terms of its relationship with its members. At any stage of the life of a corporation, there has to be an effective By-Laws for otherwise, there would be chaos not to mention the violation of the tenets of good governance.
Santos & Co. including the PCCI counsel who is supposed to be lawyer for the Club, cannot argue that the 2003 By-Laws is the law of the Club at this time based solely on the pendency of the court case involving the club and some terminated members. There is likewise no basis to say that there is no governing By-Laws (or that the 2003 By-Laws is effective) at this time or that everything is to be governed by edicts of the old Board. This would be ludicrous.
The fact is, the party questioning the 2008 By-Laws is not PCCI but the members who had been terminated on the strength of its provisions, and the PCCI Board used the 2008 By-Laws to terminate them. PCCI in effect maintained that the 2008 By-Laws is the governing law since its adoption and approval by the SEC. When the case was filed by the terminated members questioning the 2008 By-Laws, PCCI defended it anf finally for the favorable decision of the Court of Appeals. PCCI effectively affirmed the validity and applicability of its 2008 By-Laws. PCCI has applied the 2008 By-Laws consistently.
Can the board of directors apply the 2008 By-Laws in one situation and apply the superseded 2003 By=-Laws in another situation? You and I would know the answer.
As above stated, PCCI applied the provisions of Article V on or before May 19, 2012 specifically such requirements pertaining to the general membership meeting and the voting procedures. Article V was followed –
From the organization of the meeting to the order of business,
Notices, quorum, attendance and voting, voting, proxies, voting by mail,
Delivery of ballots to the audit firm and rules of order.
All of the election procedures were conducted and election materials printed under and by authority of the 2008 By-Laws. A;; acts related to the elections were done following the 2008 By-Laws indicating the full recognition by PCCI of its validity and applicability since its approval by the SEC.
Why is it then that Article VII of the same 2008 By-Laws was not applied in determining the eligibility of the candidates for the Board. Section 7.7 Article V is very clear –
“No person shall be eligible to serve more than two (2)
Consecutive terms on the board. A Board members who has served
More than half a term on the Board is considered to have served a
Full term. This section does not preclude the reelection of any
Person to the Board od Directors after one year or greater hiatus
from Directorship. This section shall apply to directors elected during the
year of approval of this amended By-Laws and to all directors elected
thereafter. Thus, the two term limit shall apply and be reckoned from
2008 for directors elected in 2008 and from 2009 for directors who
Were elected in 2007 whose original terms of office will expire.”
No debate is necessary to know the rationale behind the prohibition. Obviously, the intention of the members in approving this provision of the 2008 By-Laws is to prevent perpetuation of membership in the Board and to enable the PCCI to have a regular or predictable turn over of directors.
The prohibition against Santos & Co. who have been in the Board for at least four (4) years, from sitting in the Board is stated unequivocally in the 2008 By-Laws and is self-explanatory – a director who has served two (2) consequtive terms is prohibited from serving a new term. Santos & Co. fall squarely under this prohibition by virtue of which they are no longer eligible to be members of the PCCI Board of Directors.
The prohibition under Section 7.7 is mandatory by the use of “no person shall xxx.” Thus, even if they some out “winners” in the elections, their disqualification or ineligibility cannot be cured because their participation in the elections is expressly prohibited by Article VII. Section 7.7 of the 2008 By-Laws. In simple terms, they cannot be elected or they can no longer sit in the Board.
To insist on the applicability of the 2003 By-Laws would be catastrophic. Under Article V. Section 5.7 thereof, voting can be done only in two ways: either in person or by proxy. In the last general membership meeting and elections on May 19, members were allowed to vote by mail as provided under the 2008 By-Laws. In effect, what transpired during the whole election process was an arbitrary and selective application of the By-Laws, an act that now appears as a veiled conspiracy to bend the election rules to secure seats in the Board. If, therefore, Santos & Co. should argue that the 2003 By-Laws is the present law, the the whole election process collapses because it was conducted under the 2008 By-Laws allowing voting by mail, a procedure that was not permitted under the 2003 By-Laws.
Are we to say now that the rules of PCCI can be twisted and mangled at the whims and caprices of certain individuals? What kind of club would have not stable governing law?
In view of the foregoing and by virtue of the pertinent provisions of the 2008 By-laws discussed above, I hereby respectfully demand that the above-named individuals desist from assuming the office of members of the Board of Directors and/or exercising the functions of the office. It behooves honest and self-respecting person like you, valuing “delicadeza” to voluntarily relinquish any claim to the office of the Board of Directors of PCCI you surely know at heart that you are no longer eligible to sit in the board. Your response will reflect on the strength of your character.
This time the cost of a lawsuit, if it should get to that point, cannot be passed on to the PCCI and will have to be shouldered by the individual respondents.
Very truly yours;
(signed)
Jose C. Leynes
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