Facts:

• Simeon Capule served as the president of the Orient Protective Assurance Association, a mutual benefit society in the Philippines.
• Between November 1934 and May 1935, he faced accusations of misappropriating funds from the travelers' accident fund for unauthorized uses.
• The trial court determined that Capule had diverted funds for expenses unrelated to member benefits, including office equipment and printing costs.
• The lower court ruled against him, imposing a fine of one hundred pesos and subsidiary imprisonment if he became insolvent.
• Capule appealed, claiming that the treasurer was responsible for the funds and that temporary borrowing from the fund did not constitute a legal violation.

Issue:

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Ruling:

• The Supreme Court upheld the lower court's judgment, affirming Capule's responsibility for the violation of Section 1628-E.
• The Court concluded that diverting funds from the travelers' accident fund constituted a legal breach.
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Ratio:

• The Court interpreted Section 1628-E, which requires that benefit funds be used exclusively for authorized benefits and related operational expenses.
• The travelers' accident fund was categorized as a relief fund, and using these funds for office equipment was deemed impermissible.
• The association's by-laws assigned operational responsibility t...continue reading