Case Digest: Grace Christian High School v. CA

GRACE CHRISTIAN HIGH SCHOOL, petitioner,vs. THE COURT OF APPEALS, GRACE VILLAGE ASSOCIATION, INC., ALEJANDRO G. BELTRAN, and ERNESTO L. GO, respondents.

G.R. No. 108905 October 23, 1997

MENDOZA, J.:

Petitioner Grace Christian High School is an educational institution located at the Grace Village in Quezon City, while Private respondent Grace Village Association, Inc. ["Association'] is an organization of lot and/or building owners, lessees and residents at Grace Village.

The original 1968 by-laws provide that the Board of Directors, composed of eleven (11) members, shall serve for one (1) year until their successors are duly elected and have qualified.

On 20 December 1975, a committee of the board of directors prepared a draft of an amendment to the
by-laws which provides that "GRACE CHRISTIAN HIGH SCHOOL representative is a permanent
Director of the ASSOCIATION."

However, this draft was never presented to the general membership for approval. Nevertheless, from 1975 to 1990, petitioner was given a permanent seat in the board of directors of the association.

On 13 February 1990, the association's committee on election sought to change the by-laws and informed the Petitioner's school principal "the proposal to make the Grace Christian High School representative as a permanent director of the association, although previously tolerated in the past elections should be reexamined."

Following this advice, notices were sent to the members of the association that the provision on election of directors of the 1968 by-laws of the association would be observed.  Petitioner requested the chairman of the election committee to change the notice to honor the 1975 by-laws provision, but was denied.

The school then brought suit for mandamus in the Home Insurance and Guaranty Corporation (HIGC) to compel the board of directors to recognize its right to a permanent seat in the board.

Meanwhile, the opinion of the SEC was sought by the association, and SEC rendered an opinion to the effect that the practice of allowing unelected members in the board was contrary to the existing by-laws of the association and to §92 of the Corporation Code (B.P. Blg. 68). This was adopted by the association in its Answer in the mandamus filed with the HIGC.

The HIGC hearing officer ruled in favor of the association, which decision was affirmed by the HIGC Appeals Board and the Court of Appeals.

Issue: W/N the 1975 provision giving the petitioner a permanent board seat was valid.

Ruling: No.

Section 23 of the Corporation Code (and its predecessor Section 28 and 29 of the Corporation Law) leaves no room for doubt that the Board of Directors of a Corporation must be elected from among the stockholders or members.

There may be corporations in which there are unelected members in the board but it is clear that in these instances, the unelected members sit as ex officio members, i.e., by virtue of and for as long as they hold a particular office (e.g. whoever is the Archbishop of Manila is considered a member of the board of Cardinal Santos Memorial Hospital, Inc.)

But in the case of petitioner, there is no reason at all for its representative to be given a seat in the board. Nor does petitioner claim a right to such seat by virtue of an office held. In fact it was not given such seat in the beginning. It was only in 1975 that a proposed amendment to the by-laws sought to give it one.

Since the provision in question is contrary to law, the fact that it has gone unchallenged for fifteen years cannot forestall a later challenge to its validity. Neither can it attain validity through acquiescence because, if it is contrary to law, it is beyond the power of the members of the association to waive its invalidity.

It is more accurate to say that the members merely tolerated petitioner's representative and tolerance cannot be considered ratification.

Nor can petitioner claim a vested right to sit in the board on the basis of "practice." Practice, no matter how long continued, cannot give rise to any vested right if it is contrary to law.

Case Digest: Loyola Grand Villas Homeowners (South) Association v. CA

LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION, INC., petitioner, vs. HON. COURT OF APPEALS, HOME INSURANCE AND GUARANTY CORPORATION, EMDEN ENCARNACION and HORATIO AYCARDO, respondents.

G.R. No. 117188 August 7, 1997

ROMERO, J.:

Loyola Grand Villas Homeowners Association, Inc. (LGVHAI) was organized on 8 February 1983 as the homeoenwers' association for Loyola Grand Villas. It was also registered as the sole homeowners' association in the said village with the Home Financing Corporation (which eventually became Home Insurance Guarantee Corporation ["HIGC"]). However, the association was not able file its corporate by-laws.

The LGVHAI officers then tried to registered its By-Laws in 1988, but they failed to do so. They then discovered that there were two other homeowners' organizations within the subdivision - the Loyola Grand Villas Homeowners (North) Association, Inc. [North Association] and herein Petitioner Loyola Grand Villas Homeowners (South) Association, Inc.["South Association].

Upon inquiry by the LGVHAI to HIGC, it was discovered that LGVHAI was dissolved for its failure to submit its by-laws within the period required by the Corporation Code and for its non-user of corporate charter because HIGC had not received any report on the association's activities. These paved the way for the formation of the North and South Associations.

LGVHAI then lodged a complaint with HIGC Hearing Officer Danilo Javier, and questioned the revocation of its registration.  Hearing Officer Javier ruled in favor of LGVHAI, revoking the registration of the North and South Associations.

Petitioner South Association appealed the ruling, contending that LGVHAI's failure to file its by-laws within the period prescribed by Section 46 of the Corporation Code effectively automatically dissolved the corporation. The Appeals Board of the HIGC and the Court of Appeals both rejected the contention of the Petitioner affirmed the decision of Hearing Officer Javier.

Issue: W/N LGVHAI's failure to file its by-laws within the period prescribed by Section 46 of the Corporation Code had the effect of automatically dissolving the said corporation.

Ruling: No.

The pertinent provision of the Corporation Code that is the focal point of controversy in this case states:

Sec. 46. Adoption of by-laws. - Every corporation formed under this Code, must within one (1) month after receipt of official notice of the issuance of its certificate of incorporation by the Securities and Exchange Commission, adopt a code of by-laws for its government not inconsistent with this Code.

Ordinarily, the word "must" connotes an imposition of duty which must be enforced. However, the word "must" in a statute, like "shall," is not always imperative. It may be consistent with an ecercise of discretion. If the language of a statute, considered as a whole with due regard to its nature and object, reveals that the legislature intended to use the words "shall" and "must" to be directory, they should be given that meaning.

The legislative deliberations of the Corporation Code reveals that it was not the intention of Congress to automatically dissolve a corporation for failure to file the By-Laws on time.

Moreover, By-Laws may be necessary to govern the corporation, but By-Laws are still subordinate to the Articles of Incorporation and the Corporation Code. In fact, there are cases where By-Laws are unnecessary to the corporate existence and to the valid exercise of corporate powers.

The Corporation Code does not expressly provide for the effects of non-filing of By-Laws. However, these have been rectified by Section 6 of PD 902-A which provides that SEC shall possess the power to suspend or revoke, after proper notice and hearing, the franchise or certificate of registration of corporations upon failure to file By-Laws within the required period.

This shows that there must be notice and hearing before a corporation is dissolved for failure to file its By-Laws. Even assuming that the existence of a ground, the penalty is not necessarily revocation, but may only be suspension.

By-Laws are indispensable to corporations, since they are required by law for an orderly management of corporations. However, failure to file them within the period prescribed does not equate to the automatic dissolution of a corporation.

Why President-Elect?

Today marks a momentous occasion in which Noynoy Aquino and Jejomar Binay were proclaimed by the joint congress as President-elect and Vice-President-elect, respectively.

The term President-elect has been thrown around lately, although as to why the term is being used may be unclear to Juan dela Cruz.

Why can't we call Aquino Mr. President yet? Because the Presidency will be turned over only June 30, when he will be inaugurated as the President.

Until then, our president is still you-know-who.

Before today (when Congress was still canvassing the votes), Aquino was not even President-elect yet. We only assumed that he's going to be the next President because partial and unofficial counts showed he was ahead by a wide margin.

In the eyes of the Constitution, he was still a mere candidate.

But after the proclamation by Congress earlier, we can now officially refer to him as the President-elect.

It has important consequences, especially when it comes to vacancy.

Section 7, Article VII of the 1987 Constitution reads:

The President-elect and the Vice President-elect shall assume office at the beginning of their terms.

If the President-elect fails to qualify, the Vice President-elect shall act as President until the President-elect shall have qualified.

If a President shall not have been chosen, the Vice President-elect shall act as President until a President shall have been chosen and qualified.

If at the beginning of the term of the President, the President-elect shall have died or shall have become permanently disabled, the Vice President-elect shall become President.

Where no President and Vice-President shall have been chosen or shall have qualified, or where both shall have died or become permanently disabled, the President of the Senate or, in case of his inability, the Speaker of the House of Representatives, shall act as President until a President or a Vice-President shall have been chosen and qualified.

xxx

The first paragraph pertains to the start of their term, "which shall begin at noon on the thirtieth day of June next following the day of the election and shall end at noon of the same date, six years thereafter." (Sec 4, Art VII)

The second paragraph will not come into operation, presumably because both Aquino and Binay are qualified.

(Note: It's not really hard to be a qualified candidate, you just need to be a natural-born citizen, registered voter, be able to read and write, be at least 40 years old on election day, and be a resident for at least 10 years prior to elections. [Sec 2, Art VII])

Third paragraph will not come into play, since there is no question that the voters had chosen their President-elect.

The fourth and fifth paragraphs are crucial: if something untoward happens to Aquino and/or Binay (knock on wood), these will come into play.

Hopefully, nothing bad happens to both Aquino and Binay between now and June 30. The Constitution's Section 7, Article VII works best if it's not used at all, and relegated to sexennial trivia.


Photo: Jeffrey Avellanosa, Wikimedia, Creative Commons

Absent!

One news bit has caught my attention today, headlined Lack of quorum delays canvassing for president, VP.

Just a few days ago, the lower house was in the news because they failed to reach a quorum upon the reading of the Freedom of Information Bill.

It's just funny that our congressmen do not bother to attend congressional sessions. Attending these sessions are the most important of their job; if they do not attend these sessions, how in the world will they know about the bills that are being passed? In fact, how will they pass a bill when the required minimum number of congressmen are not present?

It is normal practice to cajole (bribe?) our solons in order to pass important bills. Which means that our congressmen are like 5-year-old kids - they need to have an incentive in order to do something they are supposed to do in the first place.

However, I'm doing a great disservice to the 5-year-olds. They need less coaxing, if at all.

If these congressmen were working in normal jobs, they would have received a major tongue-lashing from their boss. Or worse, they wouldn't have received their pay. Or worst, they would have been fired long ago for not doing their jobs.

But no, these congressmen are special. And we're stuck with them.


Photo: Robert S. Donovan, Flickr, Creative Commons

Voter's Guide for the 2010 Philippine Elections

I have prepared a simple primer for all of you voting on May 10. We only have 6 days to go, so by now you should know what to do. If not, here is a quick guide.


BEFORE THE ELECTION DAY

Voter eligibility
The first question is: are you eligible to vote? If you have just registered last year, you obviously are.

If you have already previously voted, you are eligible UNLESS you have not voted in the last two consecutive elections. This means that if you have not voted during the May 2007 national elections AND the October 2007 Barangay elections, you cannot vote on May 10. You're probably in the deactivated list. Stop wasting the other voters' time and yours. Stay at home and watch the elections unfold on TV.

If you voted on either May 2007 or October 2007 elections, but not on both, you can still vote.

Precinct Number
Know your precinct beforehand so you don't have to shove your way to the voter's list posted outside the precincts (they're not official anyway).

Find out your precinct number now by clicking here. With your precinct number at hand, you can go to your designated precinct directly on election day.

Note: If your name is not on the list that is posted outside the precinct (aka PCVL or posted computerized voter's list), don't panic. The EDCVL (or election day computerized voter's list - the official list. The Board of Election Inspectors (aka BEI aka teachers) of your precinct has a copy. That is why you can just go straight to your designated precinct. If your name is still not on the EDCVL, you have probably been deactivated.

Sample Ballot
You already know who to vote for, right?

For those who are already decided (good for you!), prepare your cheat sheet. You can get a copy of the sample ballot here (national posts only).


ON ELECTION DAY

Things to Bring:

• COMELEC ID / Official ID / Student's ID
• Sample Ballot/ Cheat Sheet
• Hanky / Tissue Paper / Hand Sanitizer (to keep your hands dry and clean)

Vote Early
Voting is from 6 AM to 6 PM, but I advise everyone to vote early.

All of us are unfamiliar with the automated system, even the BEI members. There are many unknowns on May 10, so it is better to be there early.

While the rules state that you can still vote if at 6PM you are within 30 meters from the precinct, it's better not to risk it.

There is also the slim chance that the precinct runs out of ballots. Take note, a particular ballot can be read by only one PCOS machine and no other.

So if you go to the precinct late, you might not be able to cast your vote.

Accomplishing the Ballot
Read the COMELEC guide, Pinoy Voter's Academy guide (HT: BenTambling) and the Inquirer guide. They do a much better job at explaining the process than I ever will.

I'm just going to add some things:

• When filling out the ballot, be quick, but don't hurry. This is when your sample ballot comes in handy. Be careful when shading, though. Avoid smudges.
• Handle the ballot with care. Keep your hands clean. Don't crease the ballot. If your ballot is dirty, the PCOS machine might not read it. After feeding it four times, your ballot will be nullified. You cannot fill out another ballot - there is no second try.
• It's ok to under vote, but never over vote.
• Feed the ballot into the PCOS machine yourself. Do not let a BEI member do it. This is part of making your vote count.
• When feeding the ballot to the machine, make sure the ballot is sandwiched between the secrecy folder, with the ballot's top part jutting out.

Planting Seeds of Doubt

Back in January, perhaps the biggest boxing match of the decade was all but set. There were no problems with the venue, the catch weight, the date and the purse split. The Floyd Mayweather- Manny Pacquiao match was all but signed.

But then, the negotiations were brought to a standstill, because the Mayweather camp insisted on random blood testing. They pushed for the drug testing because they thought Pacquiao couldn't have demolished his past opponents so easily without the help of performance-enhancing drugs.

The Pacquiao camp cried foul. They were adamant that Pacquiao should not be subjected to drug testing outside the Nevada state-sanctioned requirements. There was no reason for Pacquiao to undergo additional testing, he was never caught of using illegal substance from all his previous fights.

But it didn't matter by then. The seeds of doubt have already been planted. While many supporters backed Pacquiao's stance, there was arguably an equal number of doubters who said that if Pacquiao wasn't hiding something, then he should not be afraid of undergoing blood testing. Whatever the case, the Filipino's reputation has been tarnished. There will always be an asterisk after his name, all because of the accusation.

An eerie parallel has cropped up in the local political scene. A document has popped up alleging that Noynoy Aquino is insane (or mentally imbalanced, or whatever the term PC people call such a condition nowadays).

The Aquino camp cried foul. The document is a fake, they said (the blogger who first released the document had since deleted his blog). There is no reason to suppose that the presidential candidate is suffering from some mental infirmity.

But then, the seeds of doubt have already been planted. Tina Monzon-Palma of ABS-CBN (the news org that first leaked the news) suggested that if Aquino isn't hiding something, then he should undergo psychiatric tests. This call was echoed by his main rival in the surveys.

Aquino is now in a quandary. Should he or should he not take the psychiatric tests? If he is truly sane, then there is no reason not to take the test. But should he succumb to pressure and take the test anyway? All because of a baseless accusation?

There are baseless accusations and accusations founded on a nugget of truth. There is a world of difference between an accusation out of thin air and an accusation corroborated by evidence (or at the very least, conjectures). The accusation on Aquino falls in the first category.

I don't see any reason why people would think he has a psychological problem. After all, we see Aquino everyday on the news, with nary a shred of insanity. He may be eccentric, yes. But all people have some certain quirks and eccentricities.

I think Aquino can be aloof sometimes, which is somewhat of an abnormality among ever-smiling politicians. However, that reason alone will not suffice to doubt his lucidity. I actually find it refreshing to see politicians without the fake smile plastered on their face.

And one thing I am sure of: at least he is not suffering from megalomania, unlike many political aspirants out there.


Photo: David Midgly, Flickr, Creative Commons

Hierarchy of Values

Question: What is more immoral: greed (e.g. theft), intemperance (e.g. premarital sex), or hypocrisy (umm...)?


Photo: Andreanna Moya, Flickr, Creative Commons