resor ing o he records of delibera ions of he Ba asang

Pambansa, he la i self pro ides he ans er o he iss e

propo nded b pe i ioner.

______________

. 276, A 7, 1997 681 * SECOND DIVISION.

Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.

. Co r of Appeal 6 2

*
G.R. No. 117188. A g 7, 1997.
682 E EC E A A ED

LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) Loyola Grand Villas Homeowners (South) Association, Inc. vs.
ASSOCIATION, INC., pe i ioner, . HON. COURT OF Court of Appeals
APPEALS, HOME INSURANCE AND GUARANTY
CORPORATION, EMDEN ENCARNACION and Sa ; Sa ; Sa ; Ta a a a
HORATIO AYCARDO, re ponden . a b a a a ( a
a a a ), S 46
C a Ca a a a
a
C a La ; Sa C ; W a
,a a a , a
P a ; O a , a a a
. Taken as a hole and nder he principle
a a a b
ha he bes in erpre er of a s a e is he s a e i self ( a
a a a ), Sec ion 46 aforeq o ed
a a a a , a ,
re eals he legisla i e in en o a ach a direc or , and no
a a a a a b a
manda or , meaning for he ord m s in he firs sen ence
. As correc l pos la ed b he pe i ioner,
hereof. No e sho ld be aken of he second paragraph of he la
in erpre a ion of his pro ision of la begins i h he
hich allo s he filing of he b -la s e en o incorpora ion.
de ermina ion of he meaning and impor of he ord in
This pro ision in he same sec ion of he Code r les o
his sec ion. Ordinaril , he ord m s conno es an impera i e
manda or compliance i h he req iremen of filing he b -la s
ac or opera es o impose a d hich ma be enforced. I is
i hin one (1) mon h af er receip of official no ice of he iss ance
s non mo s i h o gh hich conno es comp lsion or
of i s cer ifica e of incorpora ion b he Sec ri ies and E change
manda oriness. Ho e er, he ord m s in a s a e, like
Commission. I necessaril follo s ha fail re o file he b -la s
shall, is no al a s impera i e. I ma be consis en i h an
i hin ha period does no impl he demise of he corpora ion.
e ercise of discre ion. In his j risdic ion, he endenc has been
o in erpre shall as he con e or a reasonable cons r c ion of
he s a e in hich i is sed demands or req ires. This is Sa ; Sa ; Sa
; B -a a b a
eq all r e as regards he ord m s . Th s, if he lang age of a b a b a
a s a e considered as a hole and i h d e regard o i s na re a a a a C a C a
and objec re eals ha he legisla re in ended o se he ords a a . B -la s ma be necessar for he go ernmen
shall and m s o be direc or , he sho ld be gi en ha of he corpora ion b hese are s bordina e o he ar icles of
meaning. incorpora ion as ell as o he Corpora ion Code and rela ed
s a es. There are in fac cases here b -la s are nnecessar o
corpora e e is ence or o he alid e ercise of corpora e po ers,
Sa ; Sa ;
B -La ; T a b a
h s: In he absence of char er or s a or pro isions o he
a a a a a a
con rar , b -la s are no necessar ei her o he e is ence of a
b a a a .
corpora ion or o he alid e ercise of he po ers conferred pon
This e change of ie s demons ra es clearl ha a oma ic
i , cer ainl in all cases here he char er s fficien l pro ides for
corpora e dissol ion for fail re o file he b -la s on ime as
he go ernmen of he bod ; and e en here he go erning s a e
ne er he in en ion of he legisla re. Moreo er, e en i ho
in e press erms confers pon he corpora ion he po er o adop a . E er s a e m s be so cons r ed and
b -la s, a b a b harmoni ed i h o her s a es as o form a niform s s em of
a a a a j rispr dence.
b a . (I alics s pplied.)
Sa ; B -La ; Fa b -a
Sa ; Sa ; Sa ; D P ; T a b a a b a b a a a a
a b a a a a . As he r les and reg la ions or pri a e la s
ab b b -a a b enac ed b he corpora ion o reg la e, go ern and con rol i s o n
a a a ac ions, affairs and concerns and i s s ockholders or members and
a . E en nder he foregoing e press gran of po er and direc ors and officers i h rela ion here o and among hemsel es
a hori , here can be no a a a simpl in heir rela ion o i , b -la s are indispensable o corpora ions
beca se he in his j risdic ion. These ma no be essen ial o corpora e bir h
b cer ainl , hese are req ired b la for an orderl go ernance
6 3 and managemen of corpora ions. None heless, fail re o file hem
i hin he period req ired b la b no means olls he a oma ic
dissol ion of a corpora ion.

. 276, A 7, 1997 683

6 4
Loyola Grand Villas Homeowners (South) Association, Inc. vs.
Court of Appeals
684 E EC E A A ED
incorpora ors failed o abide b he req ired filing of b -la s
Loyola Grand Villas Homeowners (South) Association, Inc. vs.
embodied in Sec ion 46 of he Corpora ion Code. There is no Court of Appeals
o righ demise of corpora e e is ence. Proper no ice and
hearing are cardinal componen s of d e process in an democra ic
ins i ion, agenc or socie . In o her ords, he incorpora ors Sa ; A a La ; S b ; H I a
m s be gi en he chance o e plain heir neglec or omission and a G a a C a ; J ; W
remed he same. a a , HIGC a a ,
a a b a a S
a E a C . Tha he corpora ion in ol ed
Sa ; Sa ; Sa ; P a D 902-A; S a
herein is nder he s per ision of he HIGC does no al er he
Ma a; S a E a C ;T a
res l of his case. The HIGC has aken o er he speciali ed
C a C -
f nc ions of he former Home Financing Corpora ion b ir e of
b -a a b b P.D. N . 902-A; E
E ec i e Order No. 90 da ed December 17, 1986. Wi h respec o
a b a a a
homeo ners associa ions, he HIGC shall e ercise all he po ers,
a a . Al ho gh he
a hori ies and responsibili ies ha are es ed on he Sec ri ies
Corpora ion Code req ires he filing of b -la s, i does no
and E change Commission , he pro ision of Ac 1459, as
e pressl pro ide for he conseq ences of he non-filing of he
amended b P.D. 902-A, o he con rar no i hs anding.
same i hin he period pro ided for in Sec ion 46. Ho e er, s ch
omission has been rec ified b Presiden ial Decree No. 902-A, he
PETITION for re ie on cer iorari of a deci ion of he
per inen pro isions on he j risdic ion of he Sec ri ies and
Co r of Appeal .
E change Commission of hich s a e: * * * Tha he fail re o file
b -la s is no pro ided for b he Corpora ion Code b in The fac are a ed in he opinion of he Co r .
ano her la is of no momen . P.D. No. 902-A, hich ook effec Re e A. Di k for pe i ioner.
immedia el af er i s prom lga ion on March 11, 1976, is er Re , De Ve a, Ti , D i g & Sa for pri a e
m ch apposi e o he Code. Accordingl , he pro isions re ponden .
abo eq o ed s ppl he la go erning he si a ion in he case a
bar, inasm ch as he Corpora ion Code and P.D. No. 902-A are ROMERO, J.:
s a es in a a a. I a a b
Ma he fail re of a corpora ion o file i b -la i hin di co ered ha he e a ocia ion had fi e (5) regi ered
one mon h from he da e of i incorpora ion, a manda ed homeo ner each ho ere al o he incorpora or ,
b Sec ion 46 of he Corpora ion Code, re l in i direc or and officer hereof. None of he member of he
a oma ic di ol ion? LGVHAI a li ed a member of he Nor h A ocia ion
Thi i he i e rai 1ed in hi pe i ion for re ie on hile hree (3) member of LGVHAI 3
ere li ed a
cer iorari of he Deci ion of he Co r of Appeal affirming member of he So h A ocia ion. The Nor h A ocia ion
he deci ion of he Home In rance and G aran a regi ered i h he HIGC on Febr ar 13, 1989 nder
Corpora ion (HIGC). Thi q a i-j dicial bod recogni ed Cer ifica e of Regi ra ion No. 04-1160 co ering Pha e
Lo ola Grand Villa Homeo ner A ocia ion (LGVHA) a We II, Ea III, We III and Ea . IV. I bmi ed i b -
he ole homeo ner a ocia ion in Lo ola Grand Villa , a la on December 20, 1988.
d l regi ered bdi i ion in Q e on Ci and Marikina In J l , 1989, hen Soli en inq ired abo he a of
Ci ha a o ned LGVHAI, A . Joaq in A. Ba i a, he head of he legal
depar men of he HIGC, informed him ha LGVHAI had
_______________
______________
1 Penned b Associate Justice Antonio M. Martine and concurred in b
Associate Justices Quirino D. Abad Santos, Jr. and 2 On March 4, 1993, LGVHAI filed its b -laws with the HIGC. Its filing
Godardo A. Jacinto. fee was dul receipted for under O.R. No. 6393291 (Private Respondents
Comment, p. 5; Rollo, p. 72).
685 3 Private Respondents Comment, pp. 3-4.

686
. 276, A 7, 1997 685
Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.
. Co r of Appeal 686 E EC E A A ED
Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.
and de eloped b Solid Home , Inc. I re oked he . Co r of Appeal
cer ifica e of regi ra ion i ed o Lo ola Grand Villa
Homeo ner (Nor h) A ocia ion Incorpora ed ( he Nor h been a oma icall di ol ed for o rea on . Fir , i did
A ocia ion for bre i ) and Lo ola Grand Villa no bmi i b -la i hin he period req ired b he
Homeo ner (So h) A ocia ion Incorpora ed ( he So h Corpora ion Code and, econd, here a non- er of
A ocia ion). corpora e char er beca e HIGC had no recei ed an
LGVHAI a organi ed on Febr ar 8, 1983 a he repor on he a ocia ion' ac i i ie . Apparen l , hi
a ocia ion of homeo ner and re iden of he Lo ola informa ion re l ed in he regi ra ion of he So h
Grand Villa . I a regi ered i h he Home Financing A ocia ion i h he HIGC on J l 27, 1989 co ering
Corpora ion, he predece or of herein re ponden HIGC, Pha e We I, Ea I and Ea II. I filed i b -la on
a he ole homeo ner organi a ion in he aid J l 26, 1989.
bdi i ion nder Cer ifica e of Regi ra ion No. 04-197. I The e de elopmen promp ed he officer of he
a organi ed b he de eloper of he bdi i ion and i LGVHAI o lodge a complain i h he HIGC. The
fir pre iden a Vic orio V. Soli en, him elf he o ner of q e ioned he re oca ion of LGVHAI cer ifica e of
he de eloper. For nkno n rea on , ho e er, LGVHAI regi ra ion i ho d e no ice and hearing and
did no file i corpora e b -la . concomi an l pra ed for he cancella ion of he cer ifica e
Some ime in 1988, he officer of he LGVHAI
2
ried o of regi ra ion of he Nor h and So h A ocia ion b
regi er i b -la . The failed o do o. To he officer rea on of he earlier i ance of a cer ifica e of regi ra ion
con erna ion, he di co ered ha here ere o o her in fa or of LGVHAI.
organi a ion i hin he bdi i ion he Nor h On Jan ar 26, 1993, af er d e no ice and hearing,
A ocia ion and he So h A ocia ion. According o pri a e pri a e re ponden ob ained a fa orable r ling from HIGC
re ponden , a non-re iden and Soli en him elf, Hearing Officer Danilo C. Ja ier ho di po ed of HIGC
re pec i el headed he e a ocia ion . The al o Ca e No. RRM-5-89 a follo :
 WHEREFORE, j dgmen is hereb rendered recogni ing he
Lo ola Grand Villas Homeo ners Associa ion, Inc., nder
Cer ifica e of Regis ra ion No. 04-197 as he d l regis ered and
e is ing homeo ners associa ion for Lo ola Grand Villas
homeo ners, and declaring he Cer ifica es of Regis ra ion of
Lo ola Grand Villas Homeo ners (Nor h) Associa ion, Inc. and
Lo ola Grand Villas Homeo ners (So h) Associa ion, Inc. as
hereb re oked or cancelled; ha he recei ership be ermina ed
and he Recei er is hereb ordered o render an acco n ing and
rn-o er o Lo ola Grand Villas Homeo ners Associa ion, Inc.,
all asse s and records of he Associa ion no nder his c s od
and possession.
The So h A ocia ion appealed o he Appeal Board of
he HIGC.
4
In i Re ol ion of Sep ember 8, 1993, he
Board di mi ed he appeal for lack of meri .
______________
4 Fernando M. Miranda, Jr., Chairman, and Wilfredo F. Hernande ,
Arthur G. Tan and Aida A. Mendo a, Members.
687
ar icle of incorpora ion. El cida ing on he effec of a
dela ed filing of b -la , he Co r of Appeal aid:
We also find no hing in he pro isions ci ed b he pe i ioner, i.e.,
Sec ions 46 and 22, Corpora ion Code, or in an o her pro ision of
he Code and o her la s hich pro ide or a leas impl ha
fail re o file he b -la s res l s in an a oma ic dissol ion of
he corpora ion. While Sec ion 46, in prescribing ha b -la s
m s be adop ed i hin he period prescribed herein, ma be
in erpre ed as a manda or pro ision, par ic larl beca se of he
se of he ord m s , i s meaning canno be s re ched o s ppor
he arg men ha a oma ic dissol ion res l s from non-
compliance.
We reali e ha Sec ion 46 or o her pro isions of he
Corpora ion Code are silen on he res l of he fail re o adop
and file he b -la s i hin he req ired period. Th s, Sec ion 46
and o her rela ed pro isions of he Corpora ion Code are o be
cons r ed i h Sec ion 6 (1) of P.D. 902-A. This sec ion empo ers
he SEC o s spend or re oke cer ifica es of regis ra ion on he
gro nds lis ed herein. Among he gro nds s a ed is he fail re o
file b -la s (see also II Campos: The Corpora ion Code, 1990 ed.,
pp. 124-125). S ch s spension or re oca ion, he same sec ion
pro ides, sho ld be made

688
. 276, A 7, 1997 687
Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.
. Co r of Appeal 688 E EC E A A ED
Loyola Grand Villas Homeowners (South) Association, Inc. vs.
Reb ffed, he So h A ocia ion in rn appealed o he Court of Appeals
Co r of Appeal , rai ing oi e . Fi , he her or no
LGVHAI fail re o file i b -la i hin he period pon proper no ice and hearing. Al ho gh P.D. 902-A refers o he
pre cribed b Sec ion 46 of he Corpora ion Code re l ed SEC, he same principles and proced res appl o he p blic
in he a oma ic di ol ion of LGVHAI. Sec d, he her responden HIGC as i e ercises i s po er o re oke or s spend
or no o homeo ner a ocia ion ma be a hori ed b he cer ifica es of regis ra ion or homeo ners associa ions.
he HIGC in one pra ling bdi i ion. Ho e er, in he (Sec ion 2[a], E.O. 535, series 1979, ransferred he po ers and
Deci ion of A g 23, 1994 being a ailed here, he Co r a hori ies of he SEC o er homeo ners associa ions o he
of Appeal affirmed he Re ol ion of he HIGC Appeal HIGC.)
Board. We also do no agree i h he pe i ioner s in erpre a ion ha
In re ol ing he fir i e, he Co r of Appeal held Sec ion 46, Corpora ion Code pre ails o er Sec ion 6, P.D. 902-A
ha nder he Corpora ion Code, a pri a e corpora ion and ha he la er is in alid beca se i con ra enes he former.
commence o ha e corpora e e i ence and j ridical There is no basis for s ch in erpre a ion considering ha hese
per onali from he da e he Sec ri ie and E change o pro isions are no inconsis en i h each o her. The are, in
Commi ion (SEC) i e a cer ifica e of incorpora ion fac , complemen ar o each o her so ha one canno be
nder i official eal. The req iremen for he filing of b - considered as in alida ing he o her.
la nder Sec ion 46 of he Corpora ion Code i hin one The Co r of Appeal added ha , a here a no ho ing
mon h from official no ice of he i ance of he cer ifica e ha he regi ra ion of LGVHAI had been alidl re oked,
of incorpora ion pre ppo e ha i i alread i con in ed o be he d l regi ered homeo ner
incorpora ed, al ho gh i ma file i b -la ih i a ocia ion in he Lo ola Grand Villa . More impor an l ,
 he So h A ocia ion did no di p e he fac ha do b abo i being an e en ial a rib e of corpora e
LGVHAI had been organi ed and ha , hereaf er, i bir h. To pe i ioner, i bmi ion i b re ed b he
ran ac ed b ine i hin he period pre cribed b la . fac ha he period for compliance i pelled o
On he econd 5
i e, he Co r of Appeal rei era ed i di inc l ; ha he cer ifica ion of he SEC/HIGC m
pre io r ling ha he HIGC ha he a hori o order ho ha he b -la are no incon i en i h he Code,
he holding of a referend m o de ermine hich of o and ha a cop of he b -la ha o be a ached o he
con ending a ocia ion ho ld repre en he en ire ar icle of incorpora ion. Moreo er, no anc ion i pro ided
comm ni , illage or bdi i ion. for beca e in he fir place, no corpora e iden i ha
Unda n ed, he So h A ocia ion filed he in an been comple ed. Pe i ioner a er ha non-pro i ion for
pe i ion for re ie on cer iorari. I ele a e a ole i e for remed or anc ion i i elf he aci proclama ion ha non-
re ol ion he fir i e i had rai ed before he Co r of compliance i fa al and no corpora e e i ence had e
Appeal , i.e., he her or no he LGVHAI fail re o file i e ol ed, 6 and herefore, here a no need o proclaim i
b -la i hin he period pre cribed b Sec ion 46 of he demi e. In a bid o con ince he Co r of i arg men ,
Corpora ion Code had he effec of a oma icall di ol ing pe i ioner re e ha :
he aid corpora ion.
Pe i ioner con end ha , ince Sec ion 46 e he ord he ord MUST is sed in Sec. 46 in i s ni ersal li eral
m i h re pec o he filing of b -la , noncompliance meaning and corollar h man implica ion i s comp lsion is
in egra ed in i s er essence MUST is al a s enforceable b
he ine i able conseq ence ha is, OR ELSE. The se of he
______________
ord
5 This was in Bag g Li a C mm i A cia i . HIGC, CA-
G.R. SP No. 12592, November 16, 1987. ______________

68 6 Petition, pp. 7-10.

6 0
. 276, A 7, 1997 689
Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc. 690 E EC E A A ED
. Co r of Appeal
Loyola Grand Villas Homeowners (South) Association, Inc. vs.
Court of Appeals
here i h o ld re l in elf-e inc ion ei her d e o
non-occ rrence of a pen i e condi ion or he occ rrence MUST in Sec. 46 is no e cep ion i means file he b -la s i hin
of a re ol or condi ion nder he h po he i ha (b ) one mon h af er no ice of iss ance of cer ifica e of regis ra ion OR
he i ance of he cer ifica e of regi ra ion alone he ELSE. The OR ELSE, ho gh no specified, is ine ricabl a par
corpora e per onali i deemed alread formed. I a er of MUST. Do his or if o do no o are Kap . The impor ance
ha he Corpora ion Code pro ide for a grada ion of of he b -la s o corpora e e is ence compels s ch meaning for as
iola ion of req iremen . Hence, Sec ion 22 manda e decreed he b -la s is he go ernmen of he corpora ion. Indeed,
ha he corpora ion m be formall organi ed and ho ld ho can he corpora ion do an la f l ac as s ch i ho b -
commence ran ac ion i hin o ear from da e of la s. S rel , no la is in ended o crea e chaos.
incorpora ion. O her i e, he corpora ion o ld be deemed
di ol ed. On he o her hand, if he corpora ion commence Pe i ioner a er ha P.D. No. 902-A canno e ceed he
opera ion b become con in o l inopera i e for fi e cope and po er of he Corpora ion Code hich i elf doe
ear , hen i ma be pended or i corpora e franchi e no pro ide anc ion for non-filing of b -la . For he
re oked. pe i ioner, i i no proper o a e he r e meaning of
Pe i ioner concede ha Sec ion 46 and he o her Sec. 46 on an na hori ed pro i ion on ch ma er
pro i ion of he Corpora ion Code do no pro ide for con ained in he aid decree.
anc ion for non-filing of he b -la . Ho e er, i in i In heir commen on he pe i ion, pri a e re ponden
ha no anc ion need be pro ided beca e he manda or co n er ha he req iremen of adop ion of b -la i no
na re of he pro i ion i o clear ha here can be no manda or . The poin o P.D. No. 902-A a ha ing
re ol ed he i e of he her aid req iremen i no ice of he iss ance of i s cer ifica e of incorpora ion b he
manda or or merel direc or . Ci ing Ch g Ka Bi . Sec ri ies and E change Commission, adop a code of b -la s for
I e edia e A e a e C , pri a e re ponden con end i s go ernmen no inconsis en i h his Code. For he adop ion
ha Sec ion 6(1) of ha decree pro ide ha non-filing of of b la s b he corpora ion, he affirma i e o e of he
b -la i onl a gro nd for pen ion or re oca ion of he s ockholders represen ing a leas a majori of he o s anding
cer ifica e of regi ra ion of corpora ion and, herefore, i capi al s ock, or of a leas a majori of he members, in he case
ma no re l in a oma ic di ol ion of he corpora ion. of non-s ock corpora ions, shall be necessar . The b -la s shall be
Moreo er, he adop ion and filing of b -la i a condi ion signed b he s ockholders or members o ing for hem and shall
b eq en hich doe no affec he corpora e per onali be kep in he principal office of he corpora ion, s bjec o he
of a corpora ion like he LGVHAI. Thi i o beca e s ockholders or members o ing for hem and shall be kep in he
Sec ion 9 of he Corpora ion Code pro ide ha he principal office of he corpora ion, s bjec o inspec ion of he
corpora e e i ence and j ridical per onali of a s ockholders or members d ring office ho rs; and a cop hereof,
corpora ion begin from he da e he SEC i e a shall be filed i h he Sec ri ies and E change Commission
cer ifica e of incorpora ion nder i official eal. hich shall be a ached o he original ar icles of incorpora ion.
Con eq en l , e en if he b -la ha e no e been filed, a No i hs anding he pro isions of he preceding paragraph,
corpora ion ma be con idered a de fac corpora ion. To b -la s ma be adop ed and filed prior o incorpora ion; in s ch
empha i e he fac he LGVHAI a regi ered a he ole case, s ch b -la s shall be appro ed and signed b all he
homeo ner a ocia ion in he Lo ola Grand Villa , incorpora ors and s bmi ed o he Sec ri ies and E change
pri a e re ponden Commission, oge her i h he ar icles of incorpora ion.
In all cases, b -la s shall be effec i e onl pon he iss ance
______________ b he Sec ri ies and E change Commission of a cer ifica ion ha
he b -la s are no inconsis en i h his Code.
Ibid., pp. 10-11.
G.R. No. 71837, Jul 26, 1988, 163 SCRA 534. 6 2

6 1
692 E EC E A A ED
. 276, A 7, 1997 691 Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.
. Co r of Appeal
Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.
. Co r of Appeal
The Sec ri ies and E change Commission shall no accep for
filing he b -la s or an amendmen here o of an bank, banking
poin o ha member hip in he LGVHAI a an
ins i ion, b ilding and loan associa ion, r s compan ,
ncondi ional re ric ion in he deed of ale igned b lo
ins rance compan , p blic ili , ed ca ional ins i ion or o her
b er .
special corpora ions go erned b special la s, nless accompanied
In i repl o pri a e re ponden commen on he
b a cer ifica e of he appropria e go ernmen agenc o he effec
pe i ion, pe i ioner rei era e i arg men ha he ord
ha s ch b -la s or amendmen s are in accordance i h la .
m in Sec ion 46 of he Corpora ion Code i manda or .
I add ha , before he r ling in Ch g Ka Bi . A correc l po la ed b he pe i ioner, in erpre a ion of
I e edia e A e a e C co ld be applied o hi ca e, hi pro i ion of la begin i h he de ermina ion of he
hi Co r m fir re ol e he i e of he her or no he meaning and impor of he ord in hi ec ion.
pro i ion of P.D. No. 902-A pre cribing he r le and Ordinaril , he ord m conno e an impera i e ac or
reg la ion o implemen he Corpora ion Code can ri e opera e o impo e a d hich ma be enforced. I i
abo e and change he b an i e pro i ion of he Code. non mo i10h o gh hich conno e comp l ion or
The per inen pro i ion of he Corpora ion Code ha i manda orine . Ho e er, he ord m in a a e,
he focal poin of con ro er in hi ca e a e : like hall, i no al a impera i e. I ma be con i en
Sec. 46. A b - a . E er corpora ion formed nder i h an e erci e of di cre ion. In hi j ri dic ion, he
his Code, m s i hin one (1) mon h af er receip of official endenc ha been o in erpre hall a he con e or a
rea onable con r c ion of he a e in hich i i ed
11
 11
demand or req ire . Thi i eq all r e a regard he in he case, as o s gges ed, in he case of El Hogar Filipino
ord m . Th , if he lang age of a a e con idered here a a a ac ion is bro gh , one akes in o acco n
a a hole and i h d e regard o i na re and objec he gra i of he iola ion commi ed. If he b -la s ere la e
re eal ha he legi la re in ended o e he ord he filing of he b -la s ere la e b , perhaps, a da or o, I
hall and m 12
o be direc or , he ho ld be gi en o ld s ppose ha migh be a olerable dela , b if he are
ha meaning. dela ed o er a period of mon hs as is happening no beca se
In hi re pec , he follo ing por ion of he of he absence of a clear req iremen ha b -la s m s be
delibera ion of he Ba a ang Pamban a No. 68 are comple ed i hin a specified period of ime, he corpora ion m s
13
ill mina ing: s ffer cer ain conseq ences.

Thi e change of ie demon ra e clearl ha

______________
a oma ic corpora e di ol ion for fail re o file he b -
Soco v. Hon. Militante, et al., 208 Phil. 151, 154 (1983); Caltex la on ime a ne er he in en ion of he legi la re.
Filipino Managers & Supervisors Ass n v. CIR, 131 Phil. 1022, 1029 Moreo er, e en i ho re or ing o he record of
(1968). delibera ion of he Ba a ang Pamban a, he la i elf
10 People v. Tamani, L-22160 & 22161, Januar 21, 1974, 55 SCRA 153, pro ide he an er o he i e propo nded b pe i ioner.
157.
11 Diokno v. Rehabilitation Finance Corporation, 91 Phil. 608, 611 ______________
(1952).
12 27A WORDS AND PHRASES 650 citing Arkansas State Highwa
13 Record of the Batasang Pambansa, Vol. III, November 12, 1979, p.
Commission v. Mabr , 315 S.W. 2d 900, 905, 229 Ark. 261. 1303.

6 3 6 4

. 276, A 7, 1997 693 E EC E A A ED 694

Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc. Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.
. Co r of Appeal . Co r of Appeal

MR. FUENTEBELLA. Thank o , Mr. Speaker. On page 34, Taken a a hole and nder he principle ha he be
referring o he adop ion of b -la s, are e made o nders and in erpre er of a a e i he a 14 e i elf ( i a a i
here, Mr. Speaker, ha b -la s m s immedia el be filed i hin i e eai e i a ), Sec ion 46 aforeq o ed
one mon h af er he iss ance? In o her ords, o ld his be re eal he legi la i e in en o a ach a direc or , and no
manda or or direc or in charac er? manda or , meaning for he ord m in he fir
MR. MENDOZA. This is manda or . en ence hereof. No e ho ld be aken of he econd
MR. FUENTEBELLA. I being manda or , Mr. Speaker, ha paragraph of he la hich allo he filing of he b -la
o ld be he effec of he fail re of he corpora ion o file hese e en i o incorpora ion. Thi pro i ion in he ame
b -la s i hin one mon h? ec ion of he Code r le o manda or compliance i h
MR. MENDOZA. There is a pro ision in he la er par of he he req iremen of filing he b -la i hin one (1) mon h
Code hich iden ifies and describes he conseq ences of iola ions af er receip of official no ice of he i ance of i
of an pro ision of his Code. One s ch conseq ence is he cer ifica e of incorpora ion b he Sec ri ie and E change
dissol ion of he corpora ion for i s inabili , or perhaps, Commi ion. I nece aril follo ha fail re o file he
inc rring cer ain penal ies. b -la i hin ha period doe no impl he demi e of
MR. FUENTEBELLA. B i ill no a oma icall amo n o he corpora ion. B -la ma be nece ar for he
a dissol ion of he corpora ion b merel failing o file he b la s go ernmen of he corpora ion b he e are bordina e
i hin one mon h. S pposing he corpora ion as la e, sa , fi e o he ar icle of incorpora 15ion a ell a o he Corpora ion
da s, ha o ld be he manda or penal ? Code and rela ed a e . There are in fac ca e here
MR. MENDOZA. I do no hink i ill necessaril res l in he b -la are nnece ar o corpora e e i ence or o he
a oma ic or a dissol ion of he corpora ion. Perhaps, as alid e erci e of corpora e po er , h :
 In he absence of char er or s a or pro isions o he con rar , SEC. 6. In order o effec i el e ercise s ch j risdic ion, he
b -la s are no necessar ei her o he e is ence of a corpora ion Commission shall possess he follo ing po ers:
or o he alid e ercise of he po ers conferred pon i , cer ainl ;
in all cases here he char er s fficien l pro ides for he (1) To , ,a a a ,
go ernmen of he bod ; and e en here he go erning s a e in a a a a , par nerships
e press erms confers pon he corpora ion he po er o adop b - or associa ions, pon an of he gro nds pro ided b la ,
la s, a b a b incl ding he follo ing:
a a a a
16
b a . (I alics s pplied.) 5. Fail re o file b -la s i hin he req ired period;
.
A Fle cher ap l p i:
_______________
______________
1 8 FLETCHER, CYCLOPEDIA OF THE LAW OF PRIVATE
14 Lope and Javelona v. El Hogar Filipino, 47 Phil. 249, 277 (1925) CORPORATIONS 640.
cited in AGPALO, STATUTORY CONSTRUCTION, 3rd ed., p. 197.
15 CAMPOS, THE CORPORATION CODE, Vol. I, 1990 ed., p. 123. 6 6
16 18 C.J.S. 595-596.

6 5 696 E EC E A A ED
Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.
. 276, A 7, 1997 695 . Co r of Appeal

Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.

In he e ercise of he foregoing a hori and j risdic ion of he
. Co r of Appeal
Commissions or b a Commissioner or b s ch o her bodies,
boards, commi ees and/or an officer as ma be crea ed or
I has been said ha he b -la s of a corpora ion are he r le of designa ed b he Commission for he p rpose. The decision,
i s life, and ha n il b -la s ha e been adop ed he corpora ion r ling or order of an s ch Commissioner, bodies, boards,
ma no be able o ac for he p rposes of i s crea ion, and ha commi ees and/or officer ma be appealed o he Commission
he firs and mos impor an d of he members is o adop si ing ba i hin hir (30) da s af er receip b he
hem. This o ld seem o follo as a ma er of principle from he appellan of no ice of s ch decision, r ling or order. The
office and f nc ions of b -la s. Vie ed in his ligh , he adop ion Commission shall prom lga e r les of proced res o go ern he
of b -la s is a ma er of prac ical, if no one of legal, necessi . proceedings, hearings and appeals of cases falling i hin i s
Moreo er, he pec liar circ ms ances a ending he forma ion of a j risdic ion.
corpora ion ma impose he obliga ion o adop cer ain b -la s, as The aggrie ed par ma appeal he order, decision or r ling of
in he case of a close corpora ion organi ed for specific p rposes. he Commission si ing ba o he S preme Co r b pe i ion
And he s a e or general la s from hich he corpora ion for re ie in accordance i h he per inen pro isions of he
deri es i s corpora e e is ence ma e pressl req ire i o make R les of Co r .
and adop b -la s and specif o some e en ha he shall
con ain and he manner of heir adop ion. T a , , E en nder he foregoing e pre gran of po er and
a a b -a a hori , here can be no a a ic c a e di i
a a a
1
impl beca e he incorpora or failed o abide b he
a a , a a a . req ired filing of b -la embodied in Sec ion 46 of he
Corpora ion Code. There i no o righ demi e of
Al ho gh he Corpora ion Code req ire he filing of corpora e e i ence. Proper no ice and hearing are cardinal
b la , i doe no e pre l pro ide for he con eq ence componen of d e proce in an democra ic in i ion,
of he non-filing of he ame i hin he period pro ided for agenc or ocie . In o her ord , he incorpora or m
in Sec ion 46. Ho e er, ch omi ion ha been rec ified b be gi en he chance o e plain heir neglec or omi ion and
Pre iden ial Decree No. 902-A, he per inen pro i ion on remed he ame.
he j ri dic ion of he SEC of hich a e:
 Tha he fail re o file b -la i no pro ided for b he corpora ion formed nder his Ac , m s i hin one mon h af er
Corpora ion Code b in ano her la i of no momen . P.D. he filing of he ar icles of incorpora ion i h he Sec ri ies and
No. 902-A, hich ook effec immedia el af er i E change Commission, adop a code of b -la s. Whe her his
prom lga ion on March 11, 1976, i er m ch appo i e o pro ision sho ld be gi en manda or or onl direc or effec
he Code. Accordingl , he pro i ion abo eq o ed ppl remained a con ro ersial q es ion n il i became academic i h
he la go erning he i a ion in he ca e a bar, he adop ion of PD 902-A. Under his decree, i is no clear ha
ina m ch a he Corpora ion Code and P.D. No. 902-A are he fail re o file b -la s i hin he req ired period is onl a
a e in a i a e ia. I e e a e e c c da e egib gro nd for s spension or re oca ion of he cer ifica e of
e i i e e a di. E er a e m be o regis ra ion of corpora ions.
con r ed and harmoni ed i h o1 her a e a o form a Non-filing of he b -la s ill no res l in a oma ic
niform em of j ri pr dence. dissol ion of he corpora ion. Under Sec ion 6(I) of PD 902-A, he
SEC is empo ered o s spend or re oke, af er proper no ice and
______________ hearing,

1 Corona v. Court of Appeals, G.R. No. 97356, September 30, 1992, 214 ______________
SCRA 378, 392.
1 8 FLETCHER, p a, at p. 633.
6 7 20 S p a.

6 8
. 276, A 7, 1997 697
Lo ola Grand Villa Homeo ner (So h) A ocia ion, Inc.
698 E EC E A A ED
. Co r of Appeal
Loyola Grand Villas Homeowners (South) Association, Inc. vs.
Court of Appeals
A he r le and reg la ion or pri a e la enac ed b
he corpora ion o reg la e, go ern and con rol i o n he franchise or cer ifica e of regis ra ion of a corpora ion on he
ac ion , affair and concern and i ockholder or gro nd a a of fail re o file b -la s i hin he req ired
member and direc or and officer i h rela
1
ion here o period. I is clear from his pro ision ha here m s firs of all
and among hem el e in heir rela ion o i , b -la are be a hearing o de ermine he e is ence of he gro nd, and
indi pen able o corpora ion in hi j ri dic ion. The e secondl , ass ming s ch finding, he penal is no necessaril
ma no be e en ial o corpora e bir h b cer ainl , he e re oca ion b ma be onl s spension of he char er. In fac ,
are req ired b la for an orderl go ernance and nder he r les and reg la ions of he SEC, fail re o file he b -
managemen of corpora ion . None hele , fail re o file la s on ime ma be penali ed merel i h he imposi ion of an
hem i hin he period req ired b la b no mean oll adminis ra i e fine i ho affec ing he corpora e e is ence of
he a oma ic di ol ion of a corpora ion. In hi regard, he erring firm.
pri a e re ponden are correc in rel ing on he I sho ld be s ressed in his connec ion ha s bs an ial
prono ncemen of hi Co20 r in Ch g Ka Bi . compliance i h condi ions s bseq en ill s ffice o perfec
I e edia e A e a e C , a follo : corpora e personali . Organi a ion and commencemen of
. Moreo er, fail re o file he b -la s does no a oma icall ransac ion of corpora e b siness are b condi ions s bseq en
opera e o dissol e a corpora ion b is no considered onl a and no prereq isi es for acq isi ion of corpora e personali . The
gro nd for s ch dissol ion. adop ion and filing of b -la s is also a condi ion s bseq en .
Sec ion 19 of he Corpora ion La , par of hich is no Sec ion Under Sec ion 19 of he Corpora ion Code, a corpora ion
22 of he Corpora ion Code, pro ided ha he po ers of he commences i s corpora e e is ence and j ridical personali and is
corpora ion o ld cease if i did no formall organi e and deemed incorpora ed from he da e he Sec ri ies and E change
commence he ransac ion of i s b siness or he con in a ion of i s Commission iss es cer ifica e of incorpora ion nder i s official
orks i hin o ears from da e of i s incorpora ion. Sec ion 20, seal. This ma be done e en before he filing of he b -la s, hich
hich has been reprod ced i h some modifica ions in Sec ion 46 nder Sec ion 46 of he Corpora ion Code, m s be adop ed
of he Corpora ion Code, e pressl declared ha e er i hin one mon h af er receip of official no ice of he iss ance of
21
i s cer ifica e of incorpora ion.
Tha he corpora ion in ol ed herein i nder he
per i ion of he HIGC doe no al er he re l of hi
ca e. The HIGC ha aken o er he peciali ed f nc ion of
C g 2021 Ce a B S , I c. A g e e ed.
he former Home Financing Corpora ion b ir22 e of
E ec i e Order No. 90 da ed December 17, 1986. Wi h
re pec o homeo ner a ocia ion , he HIGC hall
e erci e all he po er , a hori ie and re pon ibili ie
ha are e ed on he Sec ri ie and E change
Commi ion , he pro i ion of Ac 1459, a23 amended b
P.D. 902-A, o he con rar no i h anding.
WHEREFORE, he in an pe i ion for re ie on
cer iorari i hereb DENIED and he q e ioned Deci ion
of he Co r

______________

21 Ibid., at pp. 543-544.

22 The capitali ation of HIGC was increased to P2,500,000,000 b Rep.
Act No. 7835.
23 No. 2 (a), Executive Order No. 535 dated Ma 3, 1979 (78 O.G. 6805).

. 276, A 7, 1997 699

Cen ro E colar Uni er i . NLRC (Fir Di i ion)

of Appeal AFFIRMED. Thi Deci ion i immedia el

e ec or . Co again pe i ioner.
SO ORDERED.

Rega ad (Chai a ), P and Me d a, JJ.,

conc r.
T e , J ., J., On lea e.

Pe i i de ied, j dg e affi ed.

No e. Being he ole reg la or bod for ho ing and

land de elopmen , Ho ing and Land U e Reg la or
Board o ld ha e been red ced o a f nc ionall erile
en i if i lacked he po er e erci ed b i predece or
hich incl ded he po er o e le di p e concerning
land e and ho ing de elopmen and acq i i ion. (Rea
E cha ge Ve eC ai . Se di , 233 SCRA 665
[1994])

o0o