NORBERTO ASUNCION ET AL., PETITIONERS AND APPELLANTS, VS. MANUEL DE YRIARTE, RESPONDENT AND APPELLEE.

This is an action to obtain a writ of mandamus to compel the chief of the
division of archives of the Executive Bureau to file certain articles of
incorporation.

The chief of the division of archives, the respondent refused to file the
articles of incorporation, hereinafter referred to, upon the ground that the
object of the corporation, as stated in the articles, was not lawful and that,
in pursuance of section 6 of Act No. 1459, they were not registerable.

The proposed incorporators began an action in the Court of First Instance of
the city of Manila to compel the chief of the division of archives to receive
and register said articles of incorporation and to do any and all acts necessary
for the complete incorporation of the persons named in the articles. The court
below found in favor of the defendant and refused to order the registration of
the articles mentioned, maintaining and holding that the defendant, under the
Corporation Law, had authority to determine both the sufficiency of the form of
the articles and the legality of the object of the proposed corporation. This
appeal is taken from that judgment.

The first question that arises is whether or not the chief of the division of
archives has authority, under the Corporation Law, on being presented with
articles of incorporation for registration, to decide not only as to the
sufficiency of the of the articles, but also as to the lawfulness of the
purposes of the proposed corporation.

It is strongly urged on the part of the appellants that the duties appellants
that the duties of the defendant are purely ministerial and that he has no
authority to pass upon the lawfulness, of the object for which the incorporators
propose to organize. No authorities are cited to support this proposition and we
are of the opinion that it is not sound.

Section 6 of the Corporation Law reads in part as follows:

“Five or more persons, not exceeding fifteen, a majority of whom are
residents of the Philippine Islands, may form a private corporation for any
lawful purpose by filing with the division of archives, patents, copyrights, and
trademarks of the Executive Bureau articles of incorporation duly executed and
acknowledged before a notary public, * * *”

Simply because the duties of an official happen to be ministerial, it does
not necessarily follow that he may not, in the administration of his office,
determine questions of law. We are of the opinion that it is the duty of the
when articles of incorporation are presented for registration, to determine
whether the objects of the corporation expressed in the articles are lawful. We
do not believe that, simply because articles of incorporation presented for
registration are perfect in form, the division of archives must accept and
register them and issue the corresponding certificate of incorporation no matter
what the purpose of the corporation may be as expressed in the articles. We do
not believe it was intended that the division of archives should issue a
certificate of incorporation to, and thereby put the seal of approval of the
Government upon, a corporation which was organized for base or immoral purposes.
That such corporation might later, if it sought to carry out such purposes, be
dissolved, or its officials imprisoned or itself heavily fined furnishes no
reason why it should have been created in the first instance. It seems to us to
be not only the right but the duty of the division of archives to determine the
lawfulness of the objects and purposes of the corporation before it issues a
certificate of incorporation.

It having been determined that the division of archives, through its
officials, has authority to determine not only the sufficiency as to form of the
articles of incorporation offered for registration, but also the lawfulness of
the purposes of the corporation as stated in those articles, the next inquiry
leads us to the determination of the question whether or not the chief of the
division of archives, who is the representative thereof and clothed by it with
authority to deal with articles of incorporation offered for registration, is
subject to mandamus in the performance of his duties.

We are of the opinion that he may be mandamused if he act in violation of law
or if he refuses, unduly, to comply with the law. While we have held that
defendant has power to pass upon the lawfulness of the purposes of the proposed
corporation and that he may, in the fulfillment of his duties, determine the
question of law whether or not those purposes are lawful and embraced within
that class concerning which the law permits corporations to be formed, this does
not necessarily mean, as we have already intimated, that his duties are not
ministerial. On the contrary, there is no incompatibility in holding, as we do
hold, that his duties are ministerial and that he has no authority to exercise
discretion in receiving and registering articles of incorporation. He may
exercise judgment—that is, the judicial function—in the determination of the
question of law referred to, but he may not use discretion. The question whether
or not the objects of a proposed corporation are lawful is one that can be
decided one way only. If he err in the determination of that question and refuse
to file articles which should be filed under the law, that decision is subject
to review and correction and, upon proper showing, he will be ordered to file
the articles. This is the same kind of determination which a court makes when it
decides a case upon the merits. When, a case is presented to a court upon the
merits, the court can decide only one way and be right. As a matter of law,
there is only one course to pursued. In a case where the court or other official
has discretion in the resolution of a question, then, within certain
limitations, he may decide the question either way and still be right.
Discretion, it may be said generally, is a faculty conferred upon a court or
other official by which he may decide a question either way and still be right.
The power conferred upon the division of archives with respect to the
registration of articles of incorporation is not of that character. It is of the
same character as the determination of a lawsuit by a court upon the merits. It
can be decided only one way correctly.

If, therefore, the defendant erred in determining the question presented when
the articles were offered for registration, then that error will be corrected by
this court in this action and he will be compelled to register the articles as
offered. If, however, he did not commit an error, but decided that question
correctly, then, of course, his action will be affirmed to the extent that we
will deny the relief prayed for.

The next question leads us to the determination of whether or not the
purposes of the corporation as stated in the articles of incorporation are
lawful within the meaning of the Corporation Law.

The purpose of the incorporation as stated in the articles is: “That the
object of the corporation is (a) to organize and regulate the
management, disposition, administration and control which the barrio of Pulo or
San Miguel or its inhabitants or residents have over the common property of said
residents or inhabitants or property belonging to the whole barrio as such; and
(b) to use the natural products of the said property for institutions,
foundations, and charitable works of common utility and advantage to the barrio
or its inhabitants.”

The municipality of Pasig as recognized by law contains within its limits
several barrios or small settlements, like Pulo or San Miguel, which have no
local government of their own but are governed by the municipality of Pasig
through its municipal president and council. The president and members of the
municipal council are elected by a general vote of the municipality, the
qualified electors of all the barrios having the right to participate.

The municipality of Pasig is a municipal corporation organized by law. It has
the control of all property of the municipality. The various barrios of the
municipality have no right to own or hold property, they not being recognized as
legal entities by any law. The residents of the barrios participate in the
advantages which accrue to the municipality from public property and receive all
of the benefits incident to residence in a municipality organized by law. If
there is any public property situated in the barrio of Pulo or San Miguel not
belonging to the general government or the province, it belongs to the
municipality of Pasig and the sole authority to manage and administer the same
resides in that municipality. Until the present laws upon the subject are
changed no other entity can be the owner of such property or control or
administer it.

The object of the proposed corporation, as appears from the articles offered
for registration, is to make of the barrio of Pulo or San Miguel a corporation
which will become the owner of and have the right to control and administer any
property belonging to the municipality of Pasig found within the limits of that
barrio. This clearly cannot be permitted. Otherwise municipalities as now
established by law could be deprived of the property which they now own and
administer. Each barrio of the municipality would become, under the scheme
proposed, a separate corporation, would take over the ownership, administration,
and control of that portion of the municipal territory within its limits. This
would disrupt, in a sense, the municipalities of the Islands by dividing them
into a series of smaller municipalities entirely independent of the original
municipality.

What the law does not permit cannot be obtained by indirection. The object of
the proposed corporation is clearly repugnant to the provisions of the Municipal
Code and the governments of municipalities as they have been organized
thereunder. (Act.No. 82, Philippine Commission.)

The judgment appealed from is affirmed, with costs against appellants.

Arellano, C. J., Torres, Johnson, Carson, and Araullo, JJ.,
concur.