Beruflich Dokumente
Kultur Dokumente
SERGE CENIA
** BY-LAWS **
CASE 35 After due notice and hearing, LGVHAI obtained a favorable ruling
from HIGC recognizing them as the duly registered and existing
LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION INC. homeowners association, and declared the North and South
VS CA GR 117188 Associations as revoked or cancelled, among others.
AUGUST 7, 1997
The South Association appealed to the Appeals Board which
FACTS: Loyola Grand Villas Homeowners Association (LGVHAI) was dismissed the appeal for lack of merit. The South Association in turn
organized as the association of homeowners and residents of the appealed to the Court of Appeals. However the Court of Appeals
Loyola Grand Villas. It was registered with the Home Financing affirmed the Resolution. The South Association filed the petition for
Corporation, the predecessor Home Insurance and Guaranty review on certiorari.
Corporation (HIGC), as the sole homeowners' organization in the
subdivision. It was organized by the developer and its first president ISSUE: WON failure by LGVHAI to file its by-laws within the period
was Soliven, himself the owner of the developer. However, LGVHAI prescribed by Section 46 of the Corporation Code had the effect of
did not file its corporate by-laws. automatically dissolving the said corporation.
Sometime in 1988, the officers of the LGVHAI tried to register its by- RULING: NO. Section 46 reveals the legislative intent to attach a
laws but they failed to do so. To the officers consternation, they directory, and not mandatory, meaning for the word ''must" in the
discovered that there were two other organizations within the first sentence thereof. The second paragraph of the law which
subdivision, a LGVHAI North, and a LGVHAI South Association. allows the filing of by-laws even prior to incorporation. This
provision in the same section of the Code rules out mandatory
In July 1989, when Soliven inquired about the status of LGVHAI, the compliance with the requirement of filing the by-laws, within 1
head of the legal dept. of the HIGC, informed him that LGVHAI had month after receipt of official notice of the issuance of its certificate
been automatically dissolved for two reasons: First, it did not submit of incorporation by the SEC." It necessarily follows that failure to file
its by-laws within the period required by the Corporation Code and, the by-laws within that period does not imply the "demise" of the
second, there was non-user of corporate charter because HIGC had corporation.
not received any report on the association's activities.
There can be no automatic corporate dissolution simply because the
These developments prompted the officers of the LGVHAI to lodge a incorporators failed to abide by the required filing of by-laws in sec.
complaint with the HIGC. They questioned the revocation of 46 of the Corporation Code. Proper notice and hearing are cardinal
LGVHAI's certificate of registration without due notice and hearing components of due process. The incorporators must be given the
and concomitantly prayed for the cancellation of the North and chance to explain their neglect or omission and remedy the same.
South Associations by reason of the earlier issuance of a certificate The case of Chung Ka Bio vs IAC states that:
of registration in favor of LGVHAI.
CORPORATION LAW CASE COMMERCIAL LAW REVIEW ATTY. SERGE CENIA
** BY-LAWS **
Non-filing of the by-laws will not result in automatic dissolution of CASE 36
the corporation. Under Section 6(I) of PD 902-A, the SEC is
empowered to suspend or revoke, after proper notice and hearing, BARAYUGA V. ADVENTIST UNIVERSITY OF THE PHILIPPINES
the franchise or certificate of registration of a corporation on the G.R. NO. 168008, 17 AUGUST 2011
ground inter alia of failure to file by-laws within the required period.
It is clear from this provision that there must first of all be a hearing FACTS: AUP, a non-stock and non-profit domestic educational
to determine the existence of the ground, and secondly, assuming institution is incorporated under Philippine laws. Petitioner being a
such finding, the penalty is not necessarily revocation but may be member of the board of trustees (BOT) of AUP was elected the
only suspension of the charter. In fact, under the rules and corporations secretary. Almost 2 months following such election, on
regulations of the SEC, failure to file the by-laws on time may be Januarty 23, 2001, the BOT appointed petitioner a president of AUP.
penalized merely with the imposition of an administrative fine There was an audit which concluded that the president had
without affecting the corporate existence of the erring firm. committed serious violation of fundamental rules and procedure in
the disbursement and use of funds. After investigation, notice and
WHEREFORE, the instant petition for review on certiorari is hereby hearing, the members by secret ballots voted for the removal of
DENIED and the questioned Decision of the Court of Appeals petitioner as president on January 27, 2003.
AFFIRMED.
On February 4, 2003, petitioner brought the suit of injunction and
damages before trial court alleging that the BOT had relieved him as
president without valid grounds despite five-year term as provided
by Section 108 of the Corporation Code. The trial court ruled in
favour of the petitioner which AUP forthwith filed a petition for
certiorari before the Court of Appeals, contending that petitioner, as
president has a term of office of only two years, not five years,
based on AUPs amended by-laws. CA reversed trial courts decision,
hence the petition.
As AUPs amended by-laws provides for the term of members of FACTS: Valley Golf & Country Club (Valley Golf) is a duly constituted
BOT. each of whom shall hold his office for a term of two years, or non-stock, non-profit corporation which operates a golf course. Its
until his successor has been elected and qualified. The term of shareholders are likewise assessed with monthly dues. The husband
office of only two years; the officers, including the President, were of Rosa subscribed and paid in full one share in the Valley Golf. For a
to exercise the powers vested by Section 2 of the amended By-Laws period of 7 years, Caram failed to pay its monthly dues. Valley sent 5
for a term of only two years, not five years. the petitioner, having letters to Caram informing him that his account is delinquent and all
assumed as President of AUP on January 23, 2001, could serve for his privileges were suspended pursuant to its Articles of
only two years, or until January 22, 2003. By the time of his removal Incorporation. On the last letter he was informed that his share will
for cause as President on January 27, 2003, he was already be sold to satisfy the claim of the petitioner. However, it was found
occupying the office in a hold-over capacity, and could be removed out that Caram already died before the 3 rd letter was sent to him
at any time, without cause, upon the election or appointment of his mail adresss.
successor. His insistence on holding on to the office was untenable,
therefore, and with more reason when one considers that his After publication and approval of the board, the share was sold.
removal was due to the loss of confidence on the part of the Board Unaware of the controversy in Valley Golf, respondent initiated an
of Trustees. intestate proceeding wherein the court awarded the Golf share to
the respondent.
It was only through a letter after 3 years from sale, that the heirs of
Caram, learned of the sale but they were entitled for refund out of
the proceeds of the sale. Respondent filed an action for
reconveyance of the share with damages before the Securities and
Exchange Commission (SEC) against Valley Golf claiming violation of
due process.