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G.R. No. 117188. August 7, 1997] LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION, INC., petitioner, vs. HON.

COURT OF APPEALS, HOME INSURANCE AND GUARANTY CORPORATION, EMDEN ENCARNACION and HORATIO AYCARDO, respondents. FACTS: LGVHAI, the association of homeowners and residents of the Loyola Grand Villas, is registered with the Home Financing Corporation, the predecessor of herein respondent HIGC, as the sole homeowners organization in the said subdivision. Sometime in 1988, the officers of the LGVHAI tried to register its by-laws. They failed to do so. Later, it was discovered that there were two other organizations within the subdivision the South Association and the North Association, which is registered with HIGC and has filed its by-laws. When the president of the subdivision inquired about the status of LGVHAI, Atty. Joaquin A. Bautista, the head of the legal department of the HIGC, informed him that LGVHAI had been automatically dissolved for two reasons. First, it did not submit its by-laws within the period required by the Corporation Code and, second, there was non-user of corporate charter because HIGC had not received any report on the associations activities. Apparently, this information resulted in the registration of the South Association with the HIGC and the filing of its by-laws. LGVHAI complained and got a favourable result from Respondent HIGC declaring the registration of Petitioner association cancelled and Respondent CA subsequently affirmed the said decision. Hence, Petitioner association filed a petition for certiorari. ISSUE: Whether or not LGVHAIs failure to file its by-laws within the period prescribed by Section 46 of the Corporation Code resulted in the automatic dissolution of LGVHAI. RULING: No. The records of the deliberations of the Batasang Pambansa No. 68 suggest that automatic corporate dissolution for failure to file the by-laws on time was never the intention of the legislature. Taken as a whole and under the principle that the best interpreter of a statute is the statute itself, reveals the legislative intent to attach a directory, and not mandatory, meaning for the word must in the first sentence of Section 46 of the Corporation Code. Note should be taken of the second paragraph of the law which allows the filing of the by-laws even prior to incorporation. This provision in the same section of the Code rules out mandatory compliance with the requirement of filing the by-laws within one (1) month after receipt of official notice of the issuance of its certificate of incorporation by the Securities and Exchange Commission. It necessarily follows that failure to file the by-laws within that period does not imply the demise of the corporation. Bylaws may be necessary for the government of the corporation but these are subordinate to the articles of incorporation as well as to the Corporation Code and related statutes. There can also be no automatic corporate dissolution simply because the incorporators failed to abide by the required filing of by-laws embodied in Section 46 of the Corporation Code. There is no outright demise of corporate existence. Proper notice and hearing are cardinal components of due process in any democratic institution, agency or society. In other words, the incorporators must be given the chance to explain their neglect or omission and remedy the same.

G.R. No. 116695 June 20, 1997 VICTORIA G. GACHON and ALEX GUEVARA, petitioners, vs. HON. NORBERTO C. DEVERA, JR., FACTS: A complaint for forcible entry was filed by Private Respondent Susana Guevara against Patricio Guevara and Petitioners Victoria Gachon and Alex Guevara before the MTCC of Iloilo City. Summons was served on and received by petitioners on August 25, 1993, directing them to file an answer within the reglementary period of 10 days. Patricio Guevara was abroad at that time; hence, the MTCC did not acquire jurisdiction over him. On September 4, 1993, petitioners filed with the MTCC an urgent motion for extension of time to file an answer. On September 7, 1993, the MTCC denied the motion on the ground that it was a prohibited pleading under the Rule on Summary Procedure. On September 8, 1993, or more than ten days from their receipt of the summons, petitioner submitted an urgent motion praying for the admission of their answer, which was attached thereto. Two days later, petitioners filed another motion pleading for the admission of an amended answer. On September 23, 1993, the MTCC denied the motions and considered the case submitted for resolution. On October 27, 1993, the MTCC also denied the petitioners' motion for reconsideration. Thereafter, on November 26, 1993, the MTCC issued a decision resolving the complaint for forcible entry in favor of herein private respondents. Instead of filing an appeal, petitioners filed a petition for certiorari and injunction before the RTC of Iloilo City praying mainly that the MTCC be ordered to admit the amended answer and to conduct further proceedings in the civil case for forcible entry. As prayed for, a temporary restraining order was issued by the RTC. Thereafter, the RTC issued the assailed Decision dismissing the petition. ISSUE: Whether or not the Rule on Summary Procedure may be liberally construed. RULING: No. As a general principle, rules prescribing the time within which certain acts must be done, or certain proceedings taken, are considered absolutely indispensable to the prevention of needless delays and to the orderly and speedy discharge of judicial business. By their very nature, these rules are regarded as mandatory. 25 The Rule on Summary Procedure, in particular, was promulgated for the purpose of achieving "an expeditious and inexpensive determination of cases." 26 For this reason, the Rule frowns upon delays and prohibits altogether the filing of motions for extension of time. Consistent with this reasoning is Section 6 of the Rule which allows the trial court to render judgment, even motu proprio, upon the failure of a defendant to file an answer within the reglementary period. Indeed, the Judiciary Reorganization Act of 1980, mandating the promulgation of the Rule on Summary Procedure, authorizes the Court to stipulate that the period for filing pleadings in cases covered by the Rule on Summary Procedure shall be "non-extendible." 27 It is clear that the use of the word "shall" in the Rule on Summary Procedure underscores the mandatory character of the challenged provisions. Giving the provisions a directory application would subvert the nature of the Rule on Summary Procedure and defeat its objective of expediting the adjudication of suits. Indeed, to admit a late answer, as petitioners suggest, is to put premium on dilatory maneuvers the very mischief that the Rule seeks to redress.

[G.R. No. 147964. January 20, 2004] FAR EAST BANK & TRUST CO., petitioner, vs. ARTURO L. MARQUEZ, respondent. FACTS: Respondent Arturo Marquez entered into a Contract to Sell with Transamerican Sales and Exposition (TSE), through the latters Owner/General Manager involving a lot in Diliman, Quezon City with a three-storey townhouse unit to be constructed thereon for a total consideration of P800,000.00. TSE obtained a loan from petitioner FEBTC in the amount of P7,650,000.00 and mortgaged the subject property. For failure of TSE to pay its obligation, petitioner FEBTC extra-judicially foreclosed the real estate mortgage and became the highest bidder in the auction sale. Respondent had already paid a total of P600,000.00 when he stopped payment because the construction of his townhouse unit slackened due to the foreclosure. Consequently, [respondent] instituted a case with the Office of Appeals, Adjudication and Legal Affairs (OAALA) of the Housing and Land Use Regulatory Board (HLURB) to compel TSE to complete the construction of the townhouse and to prevent the enforceability of the extra-judicial foreclosure made by petitioner FEBTC and to have the mortgage between TSE and petitioner FEBTC declared invalid, said mortgage having been entered into by the parties in violation of section 18 of P.D. 957. The OAALA ruled in favor of the respondent. Petitioner FEBTC interposed a Petition for Review from the decision issued by the OAALA with the Board of Commissioners of the HLURB who affirmed in toto the OAALA decision. Hence, petitioner FEBTC appealed the Decision dated 18 July 1994 to the Office of the President, which dismissed the appeal and affirmed the subject Decision. Petitioner then elevated the case to the CA through a Petition for review. The CA found that petitioner had known that a subdivision was forthcoming inasmuch as the loan was obtained by TSE to partially finance the construction of a 20-unit townhouse project, as stated in the Whereas clause in the mortgage contract.5 Thus, the CA ruled that petitioner should not have merely relied on the representation of TSE that it had obtained the approval and authorization of the proper government agencies but should have required the submission of said documents. Hence, this Petition. Petitioner contends, among others, that Section 18 of PD 957 is merely a directory provision, noncompliance with which does not render the mortgage transaction void. ISSUE: Whether or not Sec. 18 of PD 957 is a directory provision. RULING: No. In determining whether a law is mandatory, it is necessary to ascertain the legislative intent. PD 957 aims to protect innocent lot buyers. Section 18 of the decree directly addresses the problem of fraud committed against buyers when the lot they have contracted to purchase, and which they have religiously paid for, is mortgaged without their knowledge. The avowed purpose of PD 957 compels the reading of Section 18 as prohibitory -- acts committed contrary to it are void.13 Such construal ensures the attainment of the purpose of the law: to protect lot buyers, so that they do not end up still homeless despite having fully paid for their home lots with their hard-earned cash.

[G.R. No. 131429. August 4, 1999] OSCAR BERMUDEZ, ARTURO A. LLOBRERA and CLAUDIO L. DAYAON, petitioners, vs. EXECUTIVE SECRETARY RUBEN TORRES, BUDGET SECRETARY SALVADOR ENRIQUEZ, JR., JUSTICE SECRETARY TEOFISTO GUINGONA, JR., and ATTY. CONRADO QUIAOIT, respondents. FACTS: The occurrence of a vacancy in the Office of the Provincial Prosecutor of Tarlac impelled the main contestants in this case. Petitioner Oscar Bermudez, the First Assistant Provincial Prosecutor of Tarlac and Officer-in-Charge of the Office of Provincial Prosecutor, was a recommendee of then Sec. of Justice Guingona for the position of Provincial Prosecutor. On the other hand, private respondent Atty. Conrado Quiaoit had the support of then Representative Yap of the Second District of Tarlac. Thereafter, Quiaoit was appointed by Pres. Ramos to the office, took his oath and assumed office. Bermudez refused to vacate the Office of the Provincial Prosecutor. Nonetheless, Quiaoit, performed the duties and functions of the subject position. Petitioner Bermudez challenged the appointment of Quiaoit primarily on the ground that the appointment lacks the recommendation of the Sec. Of Justice prescribed under the Revised Administrative Code of 1987. Section 9, Chap. II, Title III, Book IV of the Revised Administrative Code provides that all provincial and city prosecutors and their assistants shall be appointed by the Pres. upon the recommendation of the Secretary. ISSUE: Whether or not the absence of a recommendation of the Secretary of Justice to the President can be held fatal to the appointment of respondent Conrado Quiaoit. RULING: No. In the exercise of the power of appointment, discretion is an integral part thereof. When the Constitution[17] or the law[18] clothes the President with the power to appoint a subordinate officer, such conferment must be understood as necessarily carrying with it an ample discretion of whom to appoint. It should be here pertinent to state that the President is the head of government whose authority includes the power of control over all executive departments, bureaus and offices. Control means the authority of an empowered officer to alter or modify, or even nullify or set aside, what a subordinate officer has done in the performance of his duties, as well as to substitute the judgment of the latter,[19] as and when the former deems it to be appropriate. Expressed in another way, the President has the power to assume directly the functions of an executive department, bureau and office.[20] It can accordingly be inferred therefrom that the President can interfere in the exercise of discretion of officials under him or altogether ignore their recommendations.[21] It is the considered view of the Court, given the above disquisition, that the phrase upon recommendation of the Secretary, found in Section 9, Chapter II, Title III, Book IV, of the Revised Administrative Code, should be interpreted, as it is normally so understood, to be a mere advise, exhortation or indorsement, which is essentially persuasive in character and not binding or obligatory upon the party to whom it is made.[22] The recommendation is here nothing really more than advisory in nature.[23] The President, being the head of the Executive Department, could very well disregard or do away with the action of the departments, bureaus or offices even in the exercise of discretionary authority, and in so opting, he cannot be said as having acted beyond the scope of his authority.