LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION, INC., PETITIONER, VS. HON.

COURT OF APPEALS, HOME INSURANCE AND GUARANTY CORPORATION, EMDEN ENCARNACION

AND HORATIO AYCARDO, RESPONDENTS.
LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION, INC., VS. HON. COURT OF APPEALS, HOME INSURANCE AND GUARANTY CORPORATION, EMDEN
ENCARNACION AND HORATIO AYCARDO, 342 PHIL. 651, G.R. NO. 117188, AUGUST 7, 1997

FACTS:
Petitioner raised for a review on certiorari of the Decision of the Court of Appeals affirming the
decision of the Home Insurance and Guaranty Corporation to revoke the certificates of registration
issued to Loyola Grand Villas Homeowners (North) Association Incorporated and Loyola Grand
homeowners (South) Association Incorporated. In July, 1989, LGVHAI had been automatically
dissolved for two reasons. First is that it didn’t submit its by-laws within the period required by the
Corporation Code. Second, there was non-user of corporate charter because HIGC had not received
any reports on the association’s activities. LGVHAI questioned the revocation of LGVHAI’s certificate
of registration without due notice and hearing and prayed for the cancellation of the certificates of
registration of the North and South Associations by reason of the earlier issuance of a certificate of
registration in favor of LGVHAI. On January 26, 1993, judgment was rendered recognizing LGVHAI as
the duly registered and existing homeowners association for Loyola Grand Villas homeowners. The
North and South Associations (petitioner) were also revoked or cancelled.

ISSUE:
May the failure of a corporation to file its by-laws within one month from the date of its
incorporation, as mandated by Section 46 of the Corporation Code, result in its automatic
dissolution?

RULING:
Non-filing of the by-laws will not result in automatic dissolution of the corporation. Under section
6 of PD 902-A, the SEC is empowered to ‘suspend or revoke, after proper notice and hearing, the
franchise or certificate of registration of a corporation on the ground inter alia of ‘failure to file by-
laws within required period’. Organization and commencement of transaction of corporate business
are but conditions subsequent and not prerequisites for acquisition of corporate personality. The
adoption and filing of by-laws is also a condition subsequent. With respect to homeowners
associations, the HIGC shall “exercise all the powers, authorities and responsibilities that are vested
on the Securities and Exchange Commission x x x, the provision of Act 1459, as amended by P.D. 902-
A, to the contrary notwithstanding.” Therefore, the Court declared through Justice Regalado that the
instant petition for review on certiorari is hereby DENIED and the questioned Decision of the Court
of Appeals is AFFIRMED.