JAPANESE WAR NOTES CLAIMANTS ASSOCIATION OP THE PHILIPPINES, INC., PETITIONER, VS. SECURITIES AND EXCHANGE COMMISSION, RESPONDENT.

On August 25, 1954 the Securities and  Exchange  Commissioner issued an order, requiring petitioner herein and its President, Mr. Alfredo Abcede,  to show  cause why it should  not  be  proceeded  against  for  making misrepresentations  to the public about the need of  registering and  depositing  Japanese war notes, with  a view to their probable  redemption  as contemplated in  Senate  Bill  No. 163  and  in  Senate  Concurrent  Resolution No.  14,  for otherwise  they  would be valueless.  At the investigation that was conducted in connection  with the above order, the petitioner tried to show that there were no misrepresentations made by them in their   publications and  that the  mistake  made by  them  (that  President  Magsaysay would  soon make  representations  to  the United  States Government to  have  the war  notes redeemed)  was  made in good faith  as it was  later  retracted and  rectified. They also stated that they longed and hoped that the war notes would be  redeemed; that they are sincere and honest in their activities;  and that they  are entitled  to  their beliefs.   After the investigation, in which it was disclosed that the petitioner claimed  the right to  continue in the above-mentioned activities,  the Commissioner found that according to its articles the petitioner has the privilege  to work for the redemption of the war notes of its members alone,  but that it can not. offer its  services to the public for a valuable  consideration, because  there is  nothing definite and tangible about the redemption of the war notes and its success  is  speculative; that  any  authority given  to  offer services  can easily degenerate  into  a racket; that  under its articles  of  incorporation  the petitioner is  a civic and non-stock corporation  and should not engage in business for profit;  that it has received war notes for deposit,  upon payment of fees, without  authority in its articles  to  do so;  that it had  previously been  ordered  to desist  from collecting fees for  those  registering the  war  notes, but notwithstanding  this  prohibiton  it  has  done  so in the guise of  service fees.   Hence the  Commissioner ordered:

(1) That the Association,  and all/any of its officers, directors, employees, representatives, or agents stop immediately the registration  of Japanese War Notes, receiving the  same for deposit, and. charging   fees  therefor.  It  is  not,  however,   prohibited  from admitting  members, with the  corresponding  rights and obligations as such.

“(2) That  the Association and all/any  of its  officers, directors, employees, representatives, or agents,  desist forthwith from accepting and collecting’ fees for reparation claims for civilian casualties and other injuries, as it is not authorized so to do under its articles of incorporation.”  (Order of the Securities and Exchange Commission dated February 28, 1955.)

The case at bar is foria review of the above order.  It is contended that the Commissioner  erred  (1)  in finding that  petitioner made misrepresentations to the  public  so as to induce holders of war notes to  register them  with petitioner,  (2)  in ordering the  petitioner  to stop the reg- istration  of Japanese war notes,  receiving same for deposit and charging fees therefore, and (3) in ordering petitioner to desist  from accepting and  collecting fees for reparation; claims for  civilian casualties and injuries.

We  are not permitted to examine the correctness of the first contention  as above set forth, as  the same involves questions  of fact; only  questions of law may  be raised in this case for review  (section  2, Rule 43 of  the Rules of  Court).

In support of  the second contention it is claimed that the order  was beside the issue’investigated.   While it’may be true  that the issue which started’ the investigation ha’s been  the  misrepresentations made to  the public  by the petitioner herein, the order is based on the findings  of fact made in the course of the investigation and the prohibition stated in  the  order  aims  at  the eradication of the source of  the  evil  of  misrepresentation that was  the  subject of the “investigation.  It  can not be  said,  therefore, that the resultant  order  is not germane or related to the sub- ject-matter  of the investigation.

It  is  also argued  that the  registration  of war notes and the  collection of fees therefor  is  not  prohibited  by the corporation law and the  authority of  the  petitioner to engage therein  is implied from its articles of  incorpora- tion,  the  purposes  of which  are:

“(1)  To consecrate and. sanctify .in a strong and militant organization  in the furtherance of the financial conditions of its  members toward the attainment of their claims;
“(2) To take a position which is only secondary and complimentary to that of our constituted government  in campaigning for  the welfare of our people, especially when it ia to demand  redemption .of currency  from foreign  country;
“(3) To work  for,  and  to make due  representations  with  the United States and Japanese Governments, for the redemption and, or,  for the future payments  of  the Japanese War Notes  (mickey mouse  money);
“(4). To instill  the ties  of comradeship through this and noble gesture of goodwill between our people and country with the people and countries of the United States and Japan;
“(5) To do any and all acts and things which are naturally incidental on arising out of the purpose or any others.”.  (Petitioner’s brief, pp. 57-58.)

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We do not find  any merit in the contention.  The  articles authorize collection of  fees  from members; but  they do not authorize the corporation to engage  in the business of registering  and accepting war notes  for  deposit  and collecting fees  from  such services.  This was the ruling of the Commissioner  and this we find to  be correct.

Neither do we find any  merit in the third contention that the association  has authority to accept and collect fees for reparation claims for civilian casualties and other injuries.   This is beyond any of the  powers of the association as  embodied  in  its  articles  and  have  absolutely no relation  to  the  avowed  purpose of the  association to work for the redemption  of war notes.

The order of the Securities and Exchange Commissioner was evidently promulgated under the  authority  of section 1  (b)  of Republic Act  No.  1143 which  reads:

“(b) To penalize any violation of or noncompliance with  any terms  of  conditions of  any  certificate, license, or permit  issued by the Commission or of any order, decision, ruling  or regulation thereof, by a “fine of not exceeding two hundred  pesos per day for every day during which such violation  or  default continues:  and the Commission is hereby authorized and empowered to impose  and collect such fine after due notice and hearing.”

The  order sought  to  be  reviewed  is  hereby affirmed. with costs against  the petitioner.  So ordered.

Bengzon, Padilla, Montemayor,  Bautista  Angela, Conception, Reyes, J. B. L.,  Endencia, and Felix,  JJ.,  concur.
Reyes, A.,  J., concurs  in the  result.