Group IV .

Bernadas, Rosales, Villagracia

Group Case Study:

Y is a registered unit owner of Amaya Golden Steps, a condominium project of Ayalax Land (AL).
Golden CondoCor (GCC), a non-stock, non-profit corporation, is the registered condominium
corporation for Amaya Golden Steps. AL continues to own 220 unsold units in Amaya Golden
Steps and on the basis of such ownership became a member of GCC. AL is represented by A, B,
and C in GCC.
During the annual general membership meeting, A, B, and C declared the presence of quorum
even though only 29 of the 108 current duly registered unit owners were present. The declaration
was based on the presence of the majority of the voting rights, including those pertaining to the
220 unsold units held by AL through its representatives, A, B, and C.
Additionally, Section 6 of GCC's By-Laws provides that: "The attendance of a simple majority of
the members who are in good standing shall constitute a quorum ... xxx" Relative thereto, Section
73 of the By-Laws, referring to voting rights, further qualifies that only those members in good
standing are entitled to vote. Y objected to the validity of the meeting.

Questions:
1. Is Y’s objection correct? Why or why not?
Yes. In Tan vs. Sycip, the Court held that in non-stock corporations, only those who are
actual, living members with voting rights shall be counted in determining the existence of
a quorum during members’ meetings.

In one SEC Opinion, it has been ruled that only those persons under whose names the
condominium certificates of titles are issued can be considered as members of the
condominium corporation.

Accordingly, in the present case, there are 108 duly registered owners of the condominium
units. Hence, following the simple majority rule in constituting a quorum, there should have
been 55 members present in order to that a quorum may be determined.
Therefore, Y’s objection is correct.

2. May AL be a valid member of GCC? Why or why not?

No, AL cannot be a valid member of GCC.

In SEC Opinion XXVIII, Jan. 10, 1994, the SEC ruled that only those persons under whose
names the condominium certificates of titles are issued can be considered as members of
the condominium corporation. Hence, to be a member one’s name must appear in the
CCTs.

Since the units owned by AL are still unsold, it may be presumed that there are no CCTs
under their name. Accordingly, AL cannot be a valid member of GCC.

3. May AL appoint a representative/s to vote on its behalf? Why or why not? May the
representatives be voted as Directors? Why or why not?
Group IV . Bernadas, Rosales, Villagracia

No, AL cannot appoint a representative to vote on its behalf.

Under the law, only members of a condominium corporation are entitled to vote. Given
that we have established that AL Corporation is not a valid member or the condominium
corporation, it cannot therefore, appoint representatives to vote on its behalf.

No, representatives cannot be voted as Directors or Trustees.

Sec. 90 of the Corporation Code provides for the non-transferability of membership stating
that membership in a non-stock corporation and all rights arising therefrom are personal
and non-transferable, unless the articles of incorporation or the bylaws otherwise provides.

Even if A, B and C are valid representatives of AL as a valid member, the law provides
that only members may be elected as Directors of Trustees in a corporation. And since
the member’s rights are non-transferable, the representatives are precluded to be elected
as Directors or Trustees.

4. Assume that GCC’s principal office is in Lacson Street, Bacolod City. May it hold its
meetings in Palawan? Why or why not? How about in Australia? Why or why not?

Yes, the GCC may hold its annual general membership meeting in Palawan, under Sec.
93. of the Corporation Code, as to the place of meetings. The by-laws may provide that
the members may hold their meetings at any place even outside the place where the
principal office of the corporation is located, provided that such place is within the
Philippines. Hence, they are allowed to hold its meeting in Palawan.

Therefore, pursuant to the mentioned provision, the corporation is precluded from holding
its meeting in Australia. Unless it is otherwise stated in the articles of incorporation and
bylaws.

5. Assume that the general membership meeting is valid, may A, B, and C accumulate their
votes and elect as many Trustees as their votes may allow? Why or why not?

No, even if the meeting held is valid yet the membership of the corporation they are
representing is invalid, they cannot therefore be allowed to accumulate their votes and
elect as many trustees as their votes may allow.

In one SEC Opinion, it has been ruled that only those persons under whose names the
condominium certificates of titles are issued can be considered as members of the
condominium corporation. Under the law, only members are allowed to vote in a
membership meeting, hence, AL being an invalid member, it is restricted from voting in
such. As such, its representatives are also barred from voting in such meetings.