Case Digest (G.R. No. L-3186)
Facts:
The case, The Great Council of the United States of the Improved Order of Red Men vs. The Veteran Army of the Philippines, was decided by the Philippine Supreme Court on March 7, 1907. The dispute arose out of a contract of lease signed on March 1, 1903, between W. W. Lewis, E. C. Stovall, and V. O. Hayes, the trustees of the Apache Tribe, No. 1, Improved Order of Red Men (the lessors), and Albert E. McCabe, who acted on behalf of the Lawton Post of the Veteran Army of the Philippines (the lessee). The lease was intended for a period of two years, commencing on February 1, 1903, and concluding on February 28, 1905. The Lawton Post occupied the premises for approximately thirteen months and subsequently abandoned the property. The plaintiff sought to recover unpaid rent for the remainder of the lease term. The lower court ruled in favor of McCabe, acquitting him, while also rendering a judgment against the Veteran Army of the Philippines for P1,738.50, plus costs. The Veteran ArmCase Digest (G.R. No. L-3186)
Facts:
- Background of the Organizations
- The Veteran Army of the Philippines was organized under a constitution containing several articles:
- Article 3 states that the objective of the association is to perpetuate patriotism and fraternity among veterans of the Stars and Stripes in the Philippine Islands, and to promote the welfare of its members by assisting the sick and afflicting, burying the dead, and maintaining unity during peace and war.
- Article 5 provides that the association shall consist of a department and two or more posts.
- Article 6 establishes that the department is composed of a department commander, fourteen officers, and the commander (or an appointed member) of each post, with six members constituting a quorum for transacting business.
- Among the posts organized under the Veteran Army is the General Henry W. Lawton Post, No. 1.
- The Lease Contract
- On March 1, 1903, a contract of lease was executed in the city of Manila involving:
- Lessors: W. W. Lewis, E. C. Stovall, and V. O. Hayes, acting as trustees of Apache Tribe, No. 1, Improved Order of Red Men.
- Lessee: Albert E. McCabe, acting on behalf of the Lawton Post, Veteran Army of the Philippines.
- Term and Execution:
- The lease term was for two years, effective from February 1, 1903, to February 28, 1905.
- The Lawton Post occupied the premises for thirteen months, during which rent was duly paid.
- Subsequent Developments:
- After occupying the premises, the Lawton Post abandoned the leased property.
- An action was initiated to recover the rent corresponding to the unexpired term of the lease.
- Proceedings in the Lower Court:
- Judgment was rendered in favor of defendant McCabe, thereby acquitting him of the complaint.
- Simultaneously, a judgment was rendered against the Veteran Army of the Philippines for P1,738.50 in addition to costs.
- Appeals:
- The Veteran Army of the Philippines appealed from the judgment against it.
- The plaintiff, The Great Council of the United States of the Improved Order of Red Men, did not appeal the acquittal of McCabe.
- Contention Raised:
- The appellant contended that the Great Council could not maintain the action as it did not execute the lease contract.
- It was also argued that the Veteran Army of the Philippines should not be held liable since it neither made the contract with the plaintiff or Apache Tribe, No. 1, nor authorized anyone to bind it in such transactions.
- Nature of the Organization Disputed
- There was ambiguity regarding the precise nature of the Veteran Army of the Philippines.
- It was noted that the organization did not constitute a mercantile partnership.
- There was uncertainty whether it could be seen as a civil partnership under Article 1665 of the Civil Code.
- Opinions from commentators suggested:
- A society not organized for the purpose of gain might fall outside the definition of a partnership as defined in the Civil Code.
- Such societies are normally governed by the Law of Associations of 1887, which, however, was not extended to the Philippine Islands.
Issues:
- Jurisdiction and Proper Party Involvement
- Whether The Great Council of the United States of the Improved Order of Red Men could maintain the action, given that it was not the party that executed the lease contract.
- Authority to Bind the Veteran Army of the Philippines
- Whether the Veteran Army of the Philippines can be held liable under a contract purportedly executed on its behalf without evidence of proper authority.
- Whether any single officer or member of the Veteran Army was empowered to enter into contracts that bind the organization.
- Interpretation of the Organizational Constitution
- The extent to which the Veteran Army’s constitutional articles and internal rules vest the power of making contracts in the department as a collective body.
- Whether the absence of an express delegation in the articles implies that no officer had the requisite authority to bind the organization unilaterally.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)