Loyola Grand Villas Homeowners

(South) Association, Inc. vs Court

of Appeals

276 SCRA 681 – Business Organization – Corporation Law – Failure to File By-Laws
In 1983, the Loyola Grand Villas Association, Inc. (LGVAI) was incorporated by the homeowners
of the Loyola Grand Villas (LGV), a subdivision. The Securities and Exchange Commission (SEC)
issued a certificate of incorporation under its official seal to LGVAI in the same year. LGVAI was
likewise recognized by the Home Insurance and Guaranty Corporation (HIGC), a government-
owned-and-controlled corporation whose mandate is to oversee associations like LGVAI.
Later, LGVAI later found out that there are two homeowners associations within LGV, namely:
Loyola Grand Villas Homeowners (South) Association, Inc. (LGVAI-South) and Loyola Grand
Villas Homeowners (North) Association, Inc. (LGVAI-North). The two associations asserted that
they have to be formed because LGVAI is inactive. When LGVAI inquired about its status with
HIGC, HIGC advised that LGVAI was already terminated; that it was automatically dissolved when
it failed to submit it By-Laws after it was issued a certificate of incorporation by the SEC.
ISSUE: Whether or not a corporation’s failure to submit its by-laws results to its automatic
dissolution.
HELD: No. A private corporation like LGVAI commences to have corporate existence and
juridical personality from the date the Securities and Exchange Commission (SEC) issues a
certificate of incorporation under its official seal. The submission of its by-laws is a condition
subsequent but although it is merely such, it is a MUST that it be submitted by the corporation.
Failure to submit however does not warrant automatic dissolution because such a consequence
was never the intention of the law. The failure is merely a ground for dissolution which may be
raised in a quo warranto proceeding. It is also worthwhile to note that failure to submit can’t
result to automatic dissolution because there are some instances when a corporation does not
require a by-laws.