This case involves a dispute between the United Church of Christ in the Philippines, Inc. (UCCP), a national confederation of churches, and Bradford United Church of Christ, Inc. (BUCCI), one of its local member churches, along with BUCCI's members. BUCCI disaffiliated from UCCP and amended its Articles of Incorporation, which UCCP challenged before the Securities and Exchange Commission (SEC). The SEC upheld BUCCI's disaffiliation and amendments, a decision affirmed by the Court of Appeals. The Supreme Court denied UCCP's petition, ruling that the disaffiliation was not a purely ecclesiastical affair but involved corporate rights, that BUCCI validly effected its disaffiliation and amendments under the principle of local church autonomy, and that UCCP lacked locus standi to question the amendments to BUCCI's corporate documents.
Primary Holding
A local church, incorporated as a separate legal entity, has the right to disaffiliate from a national church confederation and amend its articles of incorporation to reflect such disaffiliation, especially where the confederation's polity recognizes local church autonomy, and such matters, involving corporate rights, are within the jurisdiction of civil courts and the SEC, not being purely ecclesiastical affairs.
Background
Petitioner UCCP is a national confederation of Evangelical churches. Respondent BUCCI, formerly Bradford Memorial Church, is a religious corporation that was a constituent local church of UCCP. A dispute arose in late 1989 when BUCCI began constructing a fence that encroached on a right-of-way allocated by UCCP. This, along with other disagreements, led to BUCCI's formal disaffiliation from UCCP, which UCCP contested, claiming the disaffiliation was invalid and that BUCCI could not amend its articles or continue using its name.
History
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UCCP filed a complaint/protest before the Securities and Exchange Commission (SEC) for rejection/annulment of BUCCI's Amended Articles of Incorporation and Injunction (SEC Case No. C-00194).
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On January 27, 2004, the SEC en banc dismissed UCCP's petition.
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UCCP filed a petition for review with the Court of Appeals (CA-G.R. SP No. 83159).
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On June 17, 2005, the Court of Appeals rendered a Decision affirming the SEC.
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UCCP's motion for reconsideration was denied by the Court of Appeals on February 21, 2006.
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UCCP filed a petition for review on certiorari under Rule 45 with the Supreme Court.
Facts
- Petitioner UCCP is a religious corporation, a national confederation of Evangelical churches, and the ecclesiastical successor of several church bodies.
- Respondent BUCCI, formerly Bradford Memorial Church, is also a religious corporation, incorporated on December 14, 1979, with a personality separate from UCCP.
- Article 3 of BUCCI's original Articles of Incorporation stated its incorporation was not forbidden by UCCP's rules or discipline.
- A dispute arose in late 1989 when BUCCI started constructing a fence encroaching on a right-of-way allocated by UCCP for Cebu Conference Inc. (CCI) and Visayas jurisdiction.
- On April 7, 1990, the Cebu Conference Judicial Commission ruled in favor of CCI regarding the dispute, which escalated tensions.
- On June 21, 1992, BUCCI's Church Council passed a resolution disaffiliating from UCCP, effective retroactively to September 16, 1990. This was ratified by BUCCI's members in a referendum on July 19, 1992.
- BUCCI filed Amended Articles of Incorporation and By-Laws reflecting its disaffiliation, which the SEC approved on July 2, 1993.
- UCCP filed a complaint/protest with the SEC (SEC Case No. C-00194) to annul BUCCI's Amended Articles of Incorporation and enjoin its use of the name BUCCI and its properties.
- UCCP later filed an Amended Complaint/Protest, adding BUCCI as a respondent and alleging its separate incorporation was not allowed under UCCP's Constitution and By-laws.
Arguments of the Petitioners
- The issue of whether BUCCI's disaffiliation is valid is purely an ecclesiastical affair, and UCCP has the sole power and authority to decide if a local church can disaffiliate.
- Individual respondents (members of BUCCI) cannot validly effect amendments to BUCCI's Articles and By-Laws nor continue using BUCCI's name after disaffiliating from UCCP.
- The stringent requirements of the Corporation Code to effect amendments to BUCCI's Articles of Incorporation were not satisfied.
- UCCP has legal personality to prosecute the case as individual respondents were its former members and BUCCI is its member-local church.
- Previous cases filed by UCCP against individual respondents, not BUCCI itself, do not mean UCCP recognized BUCCI's disaffiliation, as BUCCI's name was included merely circumstantially.
Arguments of the Respondents
- UCCP's theory that the determination of membership is a purely ecclesiastical affair is a new argument not raised in earlier proceedings and should not be allowed.
- The Court of Appeals and SEC correctly ruled that BUCCI had validly disaffiliated from UCCP and is entitled to continue using its name.
- UCCP has no legal personality (locus standi) to question the validity of the amendments to BUCCI's Articles and By-laws, as it is not a member of BUCCI.
- The petition should be dismissed for failure to comply with the mandatory requirements of Rule 45 of the 1997 Rules of Civil Procedure, specifically by failing to implead BUCCI as an indispensable party respondent in the Supreme Court petition after initially dropping it.
Issues
- Whether the determination of BUCCI's disaffiliation from UCCP is a purely ecclesiastical affair beyond the jurisdiction of the SEC and civil courts.
- Whether BUCCI validly effected its disaffiliation from UCCP and the subsequent amendments to its Articles of Incorporation and By-Laws.
- Whether UCCP has locus standi to question the amendments to BUCCI's Articles of Incorporation and By-Laws.
- Whether BUCCI is entitled to continue using its corporate name.
- Whether UCCP's petition complied with procedural requirements under Rule 45.
Ruling
- The petition was denied. The Court ruled that the issue is not purely an ecclesiastical affair because UCCP itself invoked SEC jurisdiction, and the matter involves the legal right of BUCCI, a corporate entity, to disaffiliate and amend its corporate documents, which falls under SEC jurisdiction.
- BUCCI validly effected its disaffiliation and the amendments to its Articles of Incorporation. The UCCP's polity, particularly its Constitution and By-laws, recognizes local church autonomy (congregationalist system), allowing a local church to govern itself and manage its affairs, including disaffiliation. The SEC's approval of the amendments enjoys the presumption of regularity.
- UCCP has no locus standi to question the amendments to BUCCI's Articles of Incorporation and By-Laws because UCCP is not a member of BUCCI. A party must be a "real party in interest" to have locus standi.
- BUCCI has a better right to use its corporate name based on priority of adoption and its distinct church history. The name "BUCCI" is not confusingly or deceptively similar to "UCCP."
- UCCP's failure to implead BUCCI as a respondent in the Supreme Court petition, after dropping it post-CA decision, was a procedural flaw, as BUCCI is an indispensable party.
Doctrines
- Estoppel by Jurisdiction — A party cannot invoke the jurisdiction of a court to secure affirmative relief and then renounce or repudiate the same after failing to obtain such relief. UCCP invoked SEC jurisdiction by submitting issues for resolution and cannot later claim the matter is purely ecclesiastical.
- Prohibition Against Shifting Theories on Appeal — New matters or theories cannot be raised for the first time before an appellate tribunal. UCCP's argument that the disaffiliation was a purely ecclesiastical affair was a new theory raised late in the proceedings.
- Ecclesiastical Affair — Concerns doctrine, creed, form of worship, internal governance of membership, and matters of faith. The State cannot meddle in purely ecclesiastical affairs like excommunication or ordination. The Court found BUCCI's disaffiliation and amendment of corporate documents, while having religious color, primarily concerned its legal rights as a corporation and thus was not purely ecclesiastical.
- Jurisdiction of the SEC over Corporations — The SEC has absolute jurisdiction, supervision, and control over all corporations, including religious corporations, in matters that are legal and corporate. This includes disputes over amendments to articles of incorporation.
- Local Church Autonomy (Congregationalist System) — In a congregationalist church polity, the local church is independent, autonomous, and the highest authority in its own affairs, with the right to govern itself by its own laws and rules. UCCP's own governing documents supported this principle, allowing BUCCI to disaffiliate.
- Presumption of Regularity of Official Acts — Government officials are presumed to have regularly performed their duties. The SEC's approval of BUCCI's amended Articles of Incorporation is presumed regular unless rebutted by strong evidence.
- Finality of Factual Findings of Quasi-Judicial Agencies — Factual findings of quasi-judicial agencies like the SEC, which have acquired expertise in specific matters, are generally accorded respect and finality, and are binding on the Supreme Court unless there is a clear showing of grave abuse of discretion or arbitrary findings.
- Locus Standi (Real Party in Interest) — A litigant must have a material interest in the outcome of the case, meaning they stand to be benefited or injured by the judgment. UCCP, not being a member of BUCCI, was not considered a real party in interest to question amendments to BUCCI's internal corporate documents after its valid disaffiliation.
- Confusing Similarity in Corporate Names — To prohibit the use of a corporate name, it must be proven that the complainant corporation acquired a prior right to the name and the proposed name is identical, deceptively similar, or patently deceptive. The Court found BUCCI's name was not confusingly similar to UCCP's.
- Indispensable Party — A party in interest without whom no final determination can be had of an action. BUCCI was deemed an indispensable party to the petition before the Supreme Court.
Key Excerpts
- "Basic is the rule that a party cannot be allowed to invoke the jurisdiction of a court to secure affirmative relief and later on renounce or repudiate the same after it fails to obtain such relief."
- "An ecclesiastical affair is one that concerns doctrine, creed or form of worship of the church, or the adoption and enforcement within a religious association of needful laws and regulations for the government of the membership, and the power of excluding from such associations those deemed unworthy of membership."
- "Conversely, the Court owes but recognition to BUCCI's decision as it concerns its legal right as a religious corporation to disaffiliate from another religious corporation via legitimate means—a secular matter well within the civil courts' purview."
- "From the foregoing it can be gleaned that: UCCP's control and authority over its local churches is not full and supreme; membership of the local churches in the UCCP is voluntary and not perpetual; local churches enjoy independence and autonomy and may maintain or continue church-life with or without UCCP."
Precedents Cited
- Long v. Basa — Cited by UCCP for the principle that decisions of proper church tribunals in purely ecclesiastical matters are conclusive on civil tribunals. The Court distinguished it, stating that the current case involved BUCCI's prerogative as a church to disconnect ties, similar to a church's power to expel members, which is an ecclesiastical matter the Court must respect. It was also seen as supportive of respondents' case regarding BUCCI's sole prerogative.
- Fonacier v. Court of Appeals — Referenced for holding that amendments to a church's constitution, restatement of articles of religion, and matters of faith, practice, and doctrine are unquestionably ecclesiastical matters outside civil court province. The Court used this to distinguish that BUCCI's disaffiliation was a corporate act, not purely ecclesiastical.
- Philips Export B.V. vs. Court of Appeals — Cited for the two requisites to prove a corporate name falls within legal prohibition: prior right over the name by the complainant, and the proposed name being identical, deceptively similar, or patently deceptive. Applied to determine BUCCI could use its name.
- Huertas v. Gonzalez; Atlantic Erectors, Inc. v. Herbal Cove Realty Corporation — Cited for the rule that a party cannot invoke a court's jurisdiction and then repudiate it upon an adverse decision.
- Cloma v. Court of Appeals — Cited for the rule against attacking jurisdiction after submitting to it and receiving an adverse judgment.
- Tan Chun Suy v. Court of Appeals — Cited for the principle that new matters cannot be raised for the first time on appeal.
- Pastor Austria v. National Labor Relations Commission — Cited for the definition of an "ecclesiastical affair."
- Gonzalez v. Roman Catholic Archbishop of Manila — Cited in a footnote regarding the rule that civil tribunals take ecclesiastical decisions as they find them when a civil right depends on an ecclesiastical matter.
- Planters Products, Inc. v. Fertiphil Corporation — Cited for the definition of locus standi and "real party in interest."
- Shipside Inc. v. Court of Appeals — Cited for the definition of "real party in interest" as one with a present substantial interest.
- Rizal Commercial Banking Corporation v. Marcopper Mining Corporation — Cited for the principle that shifting to a new theory on appeal is disingenuous.
Provisions
- Presidential Decree No. 902-A, Section 3 — Provides that the SEC shall have absolute jurisdiction, supervision and control over all corporations. Referenced to support SEC's jurisdiction over UCCP and BUCCI as corporate entities, even with their religious nature, in matters that are legal and corporate.
- 1974 UCCP Constitution, Section 4 (Local Church Autonomy) — States that the autonomy of the local church in matters pertaining to its life in its own particular community shall be respected. Used to support BUCCI's right to disaffiliate.
- UCCP Basis of Union, Article IV (Church Practices and Worship) — States congregations may follow their customary practices and worship. Cited to show the congregationalist system and local autonomy within UCCP.
- UCCP Declaration of Union, Statement IV — States that adoption of the UCCP name does not surrender any rights, interest, or title of uniting Churches to their respective names. Cited to support BUCCI's retention of its identity.
- 2005 UCCP Amended Constitution, Article II, Section 14 — Reiterates respect for local church autonomy.
- UCCP By-laws, Article III, Section 28 (Scope of Local Autonomy) — Details the specific authorities of a local church, including administering its properties and admitting members. Used to demonstrate the extent of BUCCI's autonomy.
- Rules of Court, Rule 45, Section 4(a) — Requires the petition for review to state the full name of the appealing party as petitioner and the adverse party as respondent. UCCP's failure to implead BUCCI as respondent in its SC petition was noted as a disregard of this rule.
- Rules of Evidence, Rule 131, Section 3(m) — Disputable presumption that official duty has been regularly performed. Applied to the SEC's approval of BUCCI's amendments.