corpo bylaws

7/24/2019 Corpo Bylaws

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LOYOLA vs. GRAND

FACTS: Loyola Grand Villas Homeowners Association (LGVHA) was organized on February 8, 198

as t!e association o" !omeowners and residents o" t!e Loyola Grand Villas# $t was registered wit!

t!e Home Financing %or&oration, t!e &redecessor o" !erein res&ondent Home $nsurance and

Guaranty %or&oration (H$G%), as t!e sole !omeowners' organization in t!e said subdiision# $t was

organized by t!e deelo&er o" t!e subdiision and its rst &resident was Victorio V# *olien, !imsel"

t!e owner o" t!e deelo&er# For un+nown reasons, !oweer, LGVHA$ did not le its cor&orate by

laws#

*ometime in 1988, t!e o-cers o" t!e LGVHA$ tried to register its bylaws but "ailed to do so# .!en

t!e o-cers t!at t!ere were two ot!er organizations wit!in t!e subdiision t!e Loyola Grand Villas

!omeowners /ort! Association $ncor&orated (/ort! Association) and t!e Loyola Grand Villas

!omeowners *out! Association $ncor&orated (*out! Association)# According to &riate res&ondents

a nonresident and *olien !imsel", res&ectiely !eaded t!ese associations# .!ey also discoered

t!at t!ese associations !ad e (0) registered !omeowners eac! w!o were also t!e incor&orators,

directors and o-cers t!ereo"# /one o" t!e members o" t!e LGVHA$ was listed as member o" t!e

/ort! Association w!ile t!ree () members o" LGVHA$ were listed as members o" t!e *out!

Association# !en *olien in2uired about t!e status o" LGVHA$, Atty# 3oa2uin A# 4autista, t!e !ead

o" t!e legal de&artment o" t!e H$G%, in"ormed !im t!at LGVHA$ !ad been automatically dissoled

because it did not submit its bylaws wit!in t!e &eriod re2uired by t!e %or&oration %ode and t!ere

was nonuser o" cor&orate c!arter because H$G% !ad not receied any re&ort on t!e association's

actiities# A&&arently, t!is in"ormation resulted in t!e registration o" t!e /ort! and *out!

Association#

ISSUE: !et!er or not "ailure o" LGVHA$ to le its bylaws wit!in one mont! "rom t!e date o" its

incor&oration result in its automatic dissolution#

RULING: NO..!e *u&reme %ourt ruled t!at t!e nonling o" t!e bylaws wit!in t!e &eriod o" 1

mont! "rom t!e issuance by *5% o" t!e %erticate o" $ncor&oration will not result to t!e automatic

dissolution o" t!e cor&oration because t!e word 67*. in *ec :; o" t!e %or&oration %ode is merel

directory not mandatory in meaning# $n "act t!e second &aragra&! allows t!e ling o" bylaws een

&rior to incor&oration#.!is &roision o" t!e %ode rules out mandatory com&liance wit! t!e re2uirement o" ling t!e

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*e&tember 1980 and %4% emerged as t!e !ig!est bidder at C@D,DDD#DD "or t!e &ledged stoc+

%onse2uently, %4% was issued t!e corres&onding certicate o" sale# ?n @1 /oember 1980, VG%%

sent %ala&atia a notice demanding "ull &ayment o" !is oerdue account in t!e amount

C18,8#@:# *aid notice was "ollowed by a demand letter dated 1@ Eecember 1980 "or t!e sam

amount and anot!er notice dated @@ /oember 198; "or C@,:8#@:# ?n : Eecember 198;, VG%%

caused to be &ublis!ed in t!e news&a&er Eaily 5=&ress a notice o" auction sale o" a number o" it

stoc+ certicates, to be !eld on 1D Eecember 198; at 1D>DD a#m# $ncluded t!erein was %ala&atia

own s!are o" stoc+ (*toc+ %erticate 1@19)# .!roug! a letter dated 10 Eecember 198;, VG%%

in"ormed %ala&atia o" t!e termination o" !is members!i& due to t!e sale o" !is s!are o" stoc+ in t!

1D Eecember 198; auction# ?n 0 7ay 1989, %4% adised VG%%$ t!at it is t!e new owner o

%ala&atia's *toc+ %erticate 1@19 by irtue o" being t!e !ig!est bidder in t!e 1 *e&tember 198

auction and re2uested t!at a new certicate o" stoc+ be issued in its name# ?n @ 7arc! 199D

VG%%$ re&lied t!at $n order to be bound, t!e t!ird &arty must !ae ac2uired +nowledge o" t!e &ertinent bylaw

at t!e time transaction or agreement between said t!ird &arty and t!e s!are!older was entere

into# Herein, at t!e time t!e &ledge agreement was e=ecuted# VG%%$ could !ae easily in"orme

%4% o" its bylaws w!en it sent notice "ormally recognizing %4% as &ledgee o" one o" its s!are

registered in %ala&atia's name# %4%'s belated notice o" said bylaws at t!e time o" "oreclosure w

not su-ce# 4ylaws signies t!e rules and regulations or &riate laws enacted by t!e cor&oration t

regulate, goern and control its own actions, aJairs and concerns and its stoc+!olders or member

and directors and o-cers wit! relation t!ereto and among t!emseles in t!eir relation to it# $n ot!e

words, bylaws are t!e relatiely &ermanent and continuing rules o" action ado&ted by t!

cor&oration "or its own goernment and t!at o" t!e indiiduals com&osing it and !aing t!

direction, management and control o" its aJairs, in w!ole or in &art, in t!e management and contr


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o" its aJairs and actiities# .!e &ur&ose o" a bylaw is to regulate t!e conduct and dene t!e dutie

o" t!e members towards t!e cor&oration and among t!emseles# .!ey are sel"im&osed an

alt!oug! ado&ted &ursuant to statutory aut!ority, !ae no status as &ublic law# .!ere"ore, it is t!

generally acce&ted rule t!at t!ird &ersons are not bound by bylaws, e=ce&t w!en t!ey !a

+nowledge o" t!e &roisions eit!er actually or constructiely# For t!e e=ce&tion to t!e gener

acce&ted rule t!at t!ird &ersons are not bound by bylaws to be a&&licable and binding u&on t!

&ledgee, +nowledge o" t!e &roisions o" t!e VG%%$ 4ylaws must be ac2uired at t!e time t!e &ledg

agreement was contracted# Knowledge o" said &roisions, eit!er actual or constructie, at t!e tim

o" "oreclosure will not aJect &ledgee's rig!t oer t!e &ledged s!are# Article @D8 o" t!e %iil %od

&roides t!at it is also o" t!e essence o" t!ese contracts t!at w!en t!e &rinci&al obligation become

due, t!e t!ings in w!ic! t!e &ledge or mortgage consists maybe alienated "or t!e &ayment to t!

creditor# Furt!er, VG%%$'s contention t!at %4% is dutybound to +now its bylaws because o" Articl

@D99 o" t!e %iil %ode w!ic! sti&ulates t!at t!e creditor must ta+e care o" t!e t!ing &ledged wit

t!e diligence o" a good "at!er o" a "amily, "ails to conince# %4% was neer in"ormed o" %ala&atia

un&aid accounts and t!e restrictie &roisions in VG%%$'s bylaws# Furt!ermore, *ection ; o" t!

%or&oration %ode w!ic! &roides t!at


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