G.R. No. 217345 - De Andres vs. Diamond H Marine Services and Shipping Agency, Inc.

Case Summary (G.R. No. 217345)

Defendants’ Answer and Preliminary Motions

Defendants denied illegal removal and asserted that, under the Society’s by‑laws, the Executive Secretary serves at the pleasure of the Board and thus is terminable without cause. They contended that alleged defects in the qualifications of some directors should have been raised at the time of their election, that challenges to director qualifications cannot be made collaterally, and that a director elected without qualifications is, at least, a de facto director whose acts are valid. Defendants further invoked prescription: one year for quo warranto (Section 16, Rule 66). Defendant Adil moved to dismiss asserting the complaint states no cause of action or, if it does, has prescribed as a quo warranto action.

Trial Court’s Ruling and Procedural Posture

The Court of First Instance concluded the suit was one for quo warranto and therefore barred by the one‑year limitation from the date of ouster. It also held petitioner was not illegally removed because her appointment was terminable at the pleasure of the Board (temporary in nature) and thus no due‑process requirements applied. The trial court rejected collateral attack on the qualifications of the directors. The trial court denied reconsideration; the case proceeded on appeal and the Court of Appeals certified legal issues to the Supreme Court.

Supreme Court’s Determination of the Nature of the Action

The Supreme Court reiterated the established rule that the nature of an action is determined by the complaint’s allegations and the relief demanded, not by the defendant’s answer or later characterization. Applying Rone and Baguioro, the Court examined the complaint and concluded that petitioner’s pleading primarily alleges violations of the Society’s by‑laws, the Civil Code and the Constitution, and seeks damages against individuals responsible for those violations. Because most defendants named were not actual holders of the contested office (only Romulo was the occupant), the action did not fall squarely within quo warranto. Therefore the one‑year prescription for quo warranto under Section 16, Rule 66 did not apply.

Prescription and Proper Remedy for the Claims

Given its characterization as an action for injury to petitioner’s rights (including damages), the Supreme Court held the applicable prescriptive period was four years under Article 1146 of the New Civil Code, citing Valencia v. Cebu Portland Cement Co. Accordingly, the action was not time‑barred on that ground.

Legal Analysis on the Merits — Appointment and Tenure under By‑Laws

The Court analyzed the Society’s relevant by‑laws. Section 7.01 lists the Executive Secretary as an executive officer; Section 7.02 provides that the Executive Secretary and Auditor “shall hold office at the pleasure of the Board of Directors, unless their term of employment shall have been fixed in their contract of employment;” Section 7.04 provides for suspension or removal for cause by a majority vote except for certain appointees. Documentary records (meeting minutes and Special Order No. 110, s.1972) showed petitioner initially designated Acting Executive Secretary, then on April 25, 1973 the Board moved and unanimously approved her appointment as Executive Secretary; the appointment notice of April 27, 1973 made no fixed‑term contractual commitment and simply notified her of appointment “effective immediately.” The Court found the absence of any fixed term or employment contract significant and determinative under Section 7.02.

Distinction Between “Removal” and “Expiration of Term” — Effect on Due Process Claims

Relying on precedent (Mojilla v. Marino; Paragas v. Bernal), the Court distinguished a statutory or contractual appointment that is “at the pleasure” of the appointing power from an incumbency that carries civil‑service protections. Where tenure is at the appointing power’s pleasure, termination is, in legal effect, an expiration of term rather than a removal; expiration of term does not require prior notice, cause, or due process proceedings. Because petitioner’s appointment was terminable at the pleasure of the Board (no fixed contractual term), the Board’s action declaring the office vacant was an exercise of that power and not a wrongful removal demanding procedural protections under civil service law or constitutional guarantees invoked in the complaint.

Limits on Invoking General Civil and Constitutional Protections

The Supreme Court emphasized that general provisions of the Civil Code on human relations and abstract constitutional principles of human dignity do not override explicit contractual or by‑law provisions voluntarily accepted by the appointee. In other words, specific governance rules in a corporation’s by‑laws that are lawful and applied in good faith limit the scope of relief that might otherwise be sought under broad civil or constitutional assertions. The Court found the Board’s action to declare the position vacant was taken in connection with internal reorganization and did not evidence dishonesty, bad faith or moral obliquity.

Collateral Attacks, Qualifications of Directors, and De Facto Acts

The trial court had also hel

Case Syllabus (G.R. No. 217345)

Procedural History

On March 23, 1976, plaintiff-appellant Mita Pardo de Tavera filed a complaint in the Court of First Instance of Rizal against the Philippine Tuberculosis Society, Inc. (the Society), and named individual directors and the present Board as defendants.
On April 12, 1976, plaintiff filed an amended complaint adding Francisco Ortigas, Jr. as a defendant.
Defendants filed an answer on May 12, 1976, denying illegal removal and asserting defenses including that the Executive Secretary holds office at the pleasure of the Board, and asserting prescription and procedural preclusion arguments.
On May 12, 1976, defendant Adil moved to dismiss, alleging the complaint stated no cause of action or had prescribed; he contended the action was one for quo warranto requiring commencement within one year of ouster.
Plaintiff opposed the motion to dismiss (May 28, 1976), characterizing the complaint as a suit for damages grounded on constitutional and civil code provisions and invoking equal protection guarantees.
Defendant Adil replied (June 2, 1976) reiterating that allegations of right to office and unlawful possession by Romulo rendered the action one in quo warranto, and alternatively that a damages suit was premature per Section 16, Rule 66 of the Rules of Court.
On September 3, 1976, the trial court held the suit was one for quo warranto, that plaintiff’s appointment was at the pleasure of the Board and terminable without cause, and that qualifications of directors could not be collateral attacked in a quo warranto action; the court dismissed or denied relief accordingly.
Plaintiff moved for reconsideration (October 13, 1976); the trial court denied the motion on November 25, 1976.
Plaintiff appealed; the trial court initially granted extension for the record on appeal but on December 20, 1976 amended its order characterizing the action principally as quo warranto and ordered original records transmitted to the Court of Appeals.
On August 8, 1978, the Court of Appeals certified the case to the Supreme Court, finding no factual issues and only questions of law raised by assignments of error.

Parties and Roles

Plaintiff-Appellant: Mita Pardo de Tavera — physician, recognized specialist in tuberculosis, member of the Society’s Board representing the Philippine Charity Sweepstakes Office, and former Executive Secretary of the Society by appointment dated April 27, 1973.
Defendants-Appellees: Philippine Tuberculosis Society, Inc.; individual directors Miguel Canizares (President), Francisco Ortigas, Jr.; Bernardo P. Pardo; Ralph Nubla; Midpantao Adil; Enrique Garcia; Alberto G. Romulo; and the present Board of Directors of the Society.
Alberto G. Romulo was the individual appointed to the Executive Secretary position immediately after the subject May 29, 1974 meeting and is named as occupying the office; he was sued as present occupant, not as one alleged to have participated in the removal.
Present Board of Directors was impleaded to enable action to reinstate plaintiff if relief were granted.

Facts Alleged by Plaintiff

Plaintiff is a medical doctor, a recognized tuberculosis specialist, practicing continuously since 1945.
She was a member of the Board of Directors representing the Philippine Charity Sweepstakes Office.
She was appointed Executive Secretary on April 27, 1973.
On May 29, 1974, the past Board of Directors summarily declared her position vacant without informing her of lawful cause; defendants then appointed Alberto Romulo by an affirmative vote of seven directors, with two abstentions and one objection.
Plaintiff alleged that Pardo, Nubla, Garcia, and Adil were not members of the Society when elected to the Board and thus not qualified, rendering the May 29, 1974 meeting acts null and void.
Plaintiff asserted causes of action for material, moral, and exemplary damages under Article 21 in relation to Article 32(6) of the New Civil Code and invoked constitutional protections including equal protection and provisions under Section 6, Article II and Section 1, Article IV of the Constitution.

Defendants’ Contentions and Procedural Defenses

Defendants denied illegal removal and contended that under the Society’s Code of By-Laws the Executive Secretary holds office at the pleasure of the Board; thus termination simply meant expiration of term.
Defendants contended that Pardo, Nubla, Adil and Garcia were qualified members of the Society at election time; alternatively, any challenge to their qualification should have been raised at election, not collaterally.
Defendants argued that a director elected without qualifications becomes at least a de facto director whose acts are valid and binding.
Defendants challenged timeliness: they asserted actions to question ouster must be filed within one year if characterized as quo warranto.
Defendant Adil specifically argued the complaint stated no cause of action or was prescribed and moved to dismiss on that ground.

Reliefs Sought by Plaintiff

Reinstatement to the position of Executive Secretary.
Payment of salaries and other benefits corresponding to the period of alleged illegal removal.
Material and moral damages for injury to honor, reputation, and dignity.
Exemplary damages to deter similar illegal and unconstitutional conduct.
Relief against those responsible — primarily the Society and the past members of the Board — with Romulo named as present occupant of the office.

Issues Presented (Assignments of Error)

Whether the lower court erred in holding the present case to be one for quo warranto and not an action for damages.
Whether the lower court erred in failing to uphold the Society’s By-Laws, applicable laws, and pertinent constitutional provisions in favor of plaintiff.
Whether the lower court erred in holding that plaintiff was not in the civil service and therefore not entitled to protection against removal without cause and due process (the Court deemed this issue unnecessary to resolve).

Governing Society By-Laws and Factual Documentary Evidence

Section 7.01 (Officers of the Society): Lists executive officers to inc