These cases, presenting substantially the same question, were argued and will be considered and disposed of together. In each case an action in the nature of quo warranto was brought in the court below challenging the right to hold office of directors of certain corporations organized under the legislative authority of the Philippine Islands; No. 564 involving directors of the National Coal Company, and No. 573 involving directors of the Philippine National Bank.
The National Coal Company was created by Act 2705, approved March 10, 1917, subsequently amended by Act 2822, approved March 5, 1919. The Governor General, under the provisions of the amended act, subscribed on behalf of the Philippine Islands for substantially all of the capital stock. The act provides:
'The voting power of all such stock owned by the government of the Philippine Islands shall be vested exclusively in a committee, consisting of the Governor General, the President of the Senate and the Speaker of the House of Representatives.'
The National Bank was created by Act 2612, approved February 4, 1916, subsequently amended by Act 2747, approved February 20, 1918, and Act 2938, approved January 30, 1921. The authorized capital of the bank, as finally fixed, was 10,000,000 pesos, consisting of 100,000 shares, of which, in pursuance of the legislative provisions, the Philippine Government acquired and owns 97,332 shares; the reaminder being held by private persons. By the original act the voting power of the government-owned stock was vested exclusively in the Governor General, but by the amended acts now in force that power was 'vested exclusively in a board, the short title of which shall be 'board of control,' composed of the Governor General, the President of the Senate, and the Speaker of the House of Representatives.' The Governor General was also divested of the power of appointment of the president and vice president of the bank, originally vested in him, and their election was authorized to be made by the directors from among their own number. Provision was also made for a general manager, to be appointed or removed by the board of directors with the advice and consent of the board of control. The manager was to be chief executive of the bank, with an annual salary to be fixed by the board of directors with the approval of the board of control. Further duties were conferred upon the board of control in connection with the management of the bank which it does not seem necessary to set forth.
It is worthy of note that this voting power has been similarly devolved by the Legislature upon at least four other corporations: The National Petroleum Company, by Act 2814; the National Development Company, by Act 2849; the National Cement Company, by Act 2855; and the National Iron Company, by Act 2862-and the suggestion of the Solicitor General that this indicates a systematic plan on the part of the Legislature to take over, through its presiding officers, the direct control generally of nationally organized or controlled stock corporations would seem to be warranted.
In pursuance of the first-quoted provision, petitioners in No. 564 were elected directors of the National Coal Company by a vote of the government-owned shares cast by the Presidnet of the Senate and the Speaker of the House; and, in purusance of the second quoted provision, petitioners in No. 573 were elected directors of the National Bank in the same way. The Governor General, challenging the validity of the legislation, did not participate in either election. While there are some differences between the two actions in respect of the facts, they are differences of detail which do not affect the substantial question to be determined.
On behalf of the Philippine government, respondent in both cases, it is contended that the election of directors and managing agents by a vote of the government-owned stock was an executive function intrusted by the Organic Act of the Philippine Islands to the Governor General, and that the acts of the Legislature divesting him of that power and vesting it, in the one case, in a 'board,' and, in the other, in a 'committee,' the majority of which in each instance consisted of officers and members of the Legislature, were invalid as being in conflict with the Organic Act. The court below sustained the contention of the government and entered judgments of ouster against the petitioners in each case.