010 Roman Catholic vs. LRC

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corporation sole

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010 Roman Cath. Adm. of Davao, Inc. vs. Land Reg. Com. Et al.[G.R. No. L-8451; December 20, 1957]TOPIC: AUTHOR: NOTES: The Roman Catholic Church is a corporation by prescription, with acknowledged juridical personality inasmuch as it is an institution which antedated almost a thousand years any other personality in Europe, and which existed when Grecian eloquence still flourished in Antioch and when idiots were still worshipped in the temple of Mecca. Since it is a corporation by prescription, it has no nationality, and hence, the nationality test does not apply. However, it becomes relevant when the place of incorporation comes into play since the case never sought to touch the place of incorporation test.

NATURE OF THE CASE:Petition for Mandamus

FACTS:

1. Mateo Rodis, a Filipino citizen and resident of Davao, executed a deed of sale of a parcel of land located in the same city in favor of the Roman Catholic Administrator of Davao, a corporation sole organized and existing in accordance with Philippine laws. The incumbent administrator is Msgr. Clovis Thibault, a Canadian citizen2. When the deed was presented to the Register of Deeds for registration, it required them to submit an affidavit stating that the ownership of the corporation is 60% Filipino citizens as required under the Constitution. Roman Catholic stated that it was a corporation sole (meaning only one incorporator) and that the totality of the Catholic population in Davao would become the owner of the property.3. Register of Deeds doubted this and submitted the case for en consulta in the Land Registration Commission.4. LRC ruled that the requirement of the Constitution must be followed and since the 60% cannot be complied with, the registration should be denied. Hence, this appeal.

ISSUE(S): 1.) WON the Roman Catholic Apostolic Church, being a corporation sole, can lawfully acquire lands in the Philippines.2.) Can corporation sole register the property?HELD: Yes. The order is reversed.

RATIO: "SEC. 159. 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 mortgage or sell real property held by it upon obtaining an order for that purpose from the Court of First Instance of the province in which the property is situated; but before making the order proof must be made to the satisfaction of the court that notice of the application for leave to mortgage or sell has been given by publication or otherwise in such manner and for such time as said court or the judge thereof may have directed, and that it is to the interest of the corporation that leave to mortgage or sell should be granted. The application for leave to mortgage or sell must be made by petition, duly verified by the bishop, chief priest, or presiding elder, acting as corporation sole, and may be opposed by any member of the religious denomination, society, or church represented by the corporation sole: Provided, however, That in cases when the rules, regulations and discipline of the religious denomination, society or church concerned represented by such corporation sole regulate the methods 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." (The Corporation Law.)

And in accordance with the above section, the temporalities of the Church or of a parish or diocese are allowed to be registered in the name of the corporation sole for purposes of administration and in trust for the real owners.The mere fact that the Corporation Law authorizes the corporation sole to acquire and hold real estate or other property does not make the latter the real owner thereof, as his tenure of Church property is merely for the purposes of administration. As stated above, the bishop is only the legal (technical) owner or trustee, the parish or diocese being the beneficial owner, or cestui que trust.

The corporation sole is a mere contrivance to enable a church to acquire, own and manage properties belonging to the church. It is only a means to an end. The constitutional provision could not have been meant to apply to the means through which and by which property may be owned or acquired, but to the ultimate owner of the property. Hence, the citizenship of the priest forming the corporation sole should be no impediment if the parish or diocese which owns the property is qualified to own and possess the property.

CASE LAW/ DOCTRINE:CORPORATIONS SOLE; COMPONENTS AND PURPOSE OF; POWER TO HOLD AND TRANSMIT CHURCH PROPERTIES TO HIS SUCCESSOR IN OFFICE. A corporation sole is a special form of corporation usually associated with clergy . . . designed to facilitate the exercise of the functions of ownership of the church which was regarded as the property owner (I Bouviers Law Dictionary, p. 682-683). It consists of one person only, and his successors (who will always be one at a time), in some particular, who are incorporated by law in order to give them some legal advantages particularly that of perpetuity which in their natural persons they could not have . . . (Reid v. Barry, 93 Fla. 849 112 So. 846). Through this legal fiction, church properties acquired by the incumbent of a corporation sole pass, by operation of law, upon his death not to his personal heirs but to his successor in office. A corporation sole, therefore, is created not only to administer the temporalities of the church or religious society where he belongs, but also to hold and transmit the same to his successor in said office.

POWER AND QUALIFICATION TO PURCHASE IN ITS NAME PRIVATE LANDS; 60 PER CENTUM REQUIREMENT NOT INTENDED TO CORPORATION SOLE. Under the circumstances of the present case, it is safe to state that even before the establishment of the Philippine Commonwealth and of the Republic of the Philippines every corporation sole then organized and registered had by express provision of law (Corporation Law, Public Act. 1459) the necessary power and qualification to purchase in its name private lands located in the territory in which it exercised its functions or ministry and for which it was created, independently of the nationality of its incumbent unique and single number and head, the bishop of the diocese. It can be also maintained without fear of being gainsaid that the Roman Catholic Apostolic Church in the Philippines has no nationality and that the frames of the Constitution did not have in mind the religious corporation sole when they provided that 60 per centum of the capital thereof be owned by Filipino citizens. Thus, if this constitutional provision were not intended for corporation sole, it is obvious that this could not be regulated or restricted by said provision.

CONSTITUTIONAL REQUIREMENT LIMITED TO OWNERSHIP NOT TO CONTROL. But the Corporation Law and the Canon Law are explicit in their provisions that a corporation sole or "ordinary" is not the owner of the properties that he may acquire but merely the administrator thereof and holds the same in trust for the church to which the corporation is an organized and constituents part. Being mere administrator of the temporalities or properties titled in his name, the constitutional provision requiring 60 per centum Filipino ownership is not applicable. The said constitutional provision is limited by it terms to ownership alone and does not extend to control unless the control over the property affected has been devised to circumvent the real purpose of the constitution.

CORPORATION SOLE WITHOUT NATIONALITY; NATIONALITY OF CONSTITUENTS DETERMINES WHETHER CONSTITUTIONAL REQUIREMENTS IS APPLICABLE. The corporation sole by reason of their peculiar constitution and form of operation have no designed owner of its temporalities, although by the terms of the law it can be safely implied that they ordinarily hold them in trust for the benefit of the Roman Catholic faithful of their respective locality or diocese. They can not be considered as aliens because they have no nationality at all. In determining, therefore, whether the constitutional provision requiring 60 per centum Filipino capital is applicable to corporations sole, the nationality of the constituents of the diocese, and not the nationality of the actual incumbent of the parish, must be taken into consideration. In the present case, even if the question of nationality be considered, the aforesaid constitutional requirement is fully met and satisfied, considering that the corporation sole in question is composed of an overwhelming majority of Filipinos.

DISSENTING/CONCURRING OPINION(S): Justice JBL Reyes

In requiring corporations or association to have60% of their capital owned by Filipino citizens, the constitution manifestly disregarded the corporate fiction i.e. the juridical personality of such corporation or associations. It went behind the corporate entity and looked at the natural persons that composed it, and demanded that a clear majority in interest (60%) should be Filipino. Since under the rules governing corporation sole, the members of the religious association cannot overrule or override the decisions of the sole corporator, then it would be wrong to conclude that the control of the corporation sole would be in the members of the religious association.