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As resident and lot owner in the Ortigas area, PADCOM was definitely
benefited by the Associations acts and activities to promote the interests and
welfare of those who acquire property therein or benefit from the acts or
activities of the Association.
Finally, PADCOMs argument that the collection of monthly dues has
no basis since there was no board resolution defining how much fees are to
be imposed deserves scant consideration. Suffice it is to say that PADCOM
never protested upon receipt of the earlier demands for payment of
membership dues. In fact, by proposing a scheme to pay its obligation,
PADCOM cannot belatedly question the Associations authority to assess
and collect the fees in accordance with the total land area owned or occupied
by the members, which finds support in a resolution dated 6 November 1982
of the Associations incorporating directors and Section 2 of its By-laws
STA. CLARA HOMEOWNERS ASSOCIATION vs. Sps. GASTON
Facts:
On 1 April 1998, Spouses Victor Ma. Gaston and Lydia M. Gaston, private
respondents herein, filed a complaint for damages with preliminary
injunction/preliminary mandatory injunction and temporary restraining order
before the Regional Trial Court in Negros Occidental at Bacolod City
against petitioners Santa Clara Homeowners Association (SCHA for brevity)
thru its Board of Directors, namely: Arneil Chua, Luis Sarrosa, Jocelyn
Garcia, Ma. Milagros Vargas, Lorenzo Lacson, Ernesto Piccio, Dindo Ilagan,
Danilo Gamboa, Jr., Rizza de la Rama and Security Guard Capillo and John
Doe, and Santa Clara Estate, Incorporated. The case was docketed as Civil
Case No 98-10217 and raffled to RTC-Branch 49, Bacolod City.
The complaint alleged that private respondents herein [were] residents of
San Jose Avenue, Sta. Clara Subdivision, Mandalagan, Bacolod City. They
purchased their lots in the said subdivision sometime in 1974, and at the
time of purchase, there was no mention or requirement of membership in
any homeowners association. From that time on, they have remained nonmembers of SCHA. They also stated that an arrangement was made wherein
homeowners who [were] non-members of the association were issued nonmember gatepass stickers for their vehicles for identification by the security
guards manning the subdivisions entrances and exits. This arrangement
remained undisturbed until sometime in the middle of March, 1998, when
SCHA disseminated a board resolution which decreed that only its members
dues [did] not make them non-members of SCHA continued the petitioners.
And even granting that the private respondents [were] not members of the
association, the petitioners opined that the HIGC still ha[d] jurisdiction over
the case pursuant to Section 1 (a), Rule II of the Rules of Procedure of the
HIGC.
On 6 July 1998, the lower court, after having received private respondents
opposition to petitioners motion to dismiss and other subsequent pleadings
filed by the parties, resolved to deny petitioners motion to dismiss, finding
that there existed no intra-corporate controversy since the private
respondents alleged that they ha[d] never joined the association; and, thus,
the HIGC had no jurisdiction to hear the case. On 18 July 1998, petitioners
submitted a Motion for Reconsideration, adding lack of cause of action as
ground for the dismissal of the case. This additional ground was anchored
on the principle of damnum absque injuria as allegedly there [was] no
allegation in the complaint that the private respondents were actually
prevented from entering the subdivision and from having access to their
residential abode. On 17 August 1998, the court a quo, taking into
consideration the comment filed by the private respondents[,] on petitioners
motion for reconsideration and the pleadings thereafter submitted by the
parties, denied the said motion without however ruling on the additional
ground of lack of cause of action x x x.
Issues
I
Whether or not Respondent Court of Appeals erred in upholding the
jurisdiction of the court a quo, to declare as null and void the resolution of
the Board of SCHA, decreeing that only members [in] good standing of the
said association, were to be issued stickers for use in their vehicles.
II
Whether or not private respondents are members of SCHA.
This Courts Rulings
The Petition has no merit.
First Issue: Jurisdiction
Petitioners contend that the CA erred in upholding the trial courts
jurisdiction to declare as null and void the SCHA Resolution decreeing that
only members in good standing would be issued vehicle stickers.
The RTC did not void the SCHA Resolution; it merely resolved the Motion
to Dismiss filed by petitioners by holding that it was the RTC, not the Home
Insurance and Guaranty Corporation (HIGC), that had jurisdiction over the
dispute.
HIGCs Jurisdiction
HIGC[if !supportFootnotes][10][endif] was created pursuant to Republic Act 580.[if !
supportFootnotes][11][endif]
Originally, administrative supervision over homeowners
associations was vested by law in the Securities and Exchange Commission
(SEC).[if !supportFootnotes][12][endif]
Pursuant to Executive Order (EO) No. 535, however,[if !supportFootnotes][13][endif] the
HIGC assumed the regulatory and adjudicative functions of the SEC over
homeowners associations. Explicitly vesting such powers in the HIGC is
paragraph 2 of EO 535
The aforesaid powers and responsibilities, which had been vested in the
HIGC with respect to homeowners associations, were later transferred to the
Housing and Land Use Regulatory Board (HLURB) pursuant to Republic
Act 8763.
Are Private Respondents SCHA Members?
In order to determine if the HIGC has jurisdiction over the dispute, it is
necessary to resolve preliminarily -- on the basis of the allegations in the
Complaint -- whether private respondents are members of the SCHA.
The constitutionally guaranteed freedom of association includes the freedom
not to associate. The right to choose with whom one will associate oneself is
the very foundation and essence of that partnership. It should be noted that
the provision guarantees the right to form an association. It does not include
the right to compel others to form or join one.
More to the point, private respondents cannot be compelled to become
members of the SCHA by the simple expedient of including them in its
Articles of Incorporation and By-laws without their express or implied
consent. True, it may be to the mutual advantage of lot owners in a
subdivision to band themselves together to promote their common welfare.
But that is possible only if the owners voluntarily agree, directly or
indirectly, to become members of the association. True also, memberships
reconsideration of the same order. Upon denial of his motion he also filed
with the Court of Appeals a petition for review (CA-GR SP 43389), which
was consolidated with CA-GR SP 41551). On 29 May 1998, the Court of
Appeals promulgated its decision granting Basa, et al.'s consolidated
petitions and reversing the 31 July 1996 order of the SEC en banc in SEC
EB Case 484. Long, et al. filed a motion for reconsideration but was denied
by the appellate court in a resolution dated 18 August 1998. Long, Lim Che
Boon, et al. filed the petitions for review, which were subsequently
consolidated.
Issue: Whether the expulsion of Joseph Lim, Liu Yek See, Alfredo Long and
Felix Almeria from the membership of the CHURCH by its Board of
Directors through a resolution issued on August 30, 1993 is in accordance
with law.
Held: The By-laws of the CHURCH, which the members have expressly
adhered to, does not require the Board of Directors to give prior notice to the
erring or dissident members in cases of expulsion. In the By-law provision,
the only requirements before a member can be expelled or removed from the
membership of the CHURCH are: (a) the Board of Directors has been
notified that a member has failed to observe any regulations and By-laws of
the CHURCH, or the conduct of any member has been dishonorable or
improper or otherwise injurious to the character and interest of the
CHURCH, and (b) a resolution is passed by the Board expelling the member
concerned, without assigning any reason therefor. Thus, a member who
commits any of the causes for expulsion enumerated in paragraph 4 of
Article VII may be expelled by the Board of Directors, through a resolution,
without giving that erring member any notice prior to his expulsion. The
resolution need not even state the reason for such action. The CHURCH Bylaw provision on expulsion, as phrased, may sound unusual and
objectionable as there is no requirement of prior notice to be given to an
erring member before he can be expelled; but that is how peculiar the nature
of a religious corporation is vis-a-vis an ordinary corporation organized for
profit. It must be stressed that the basis of the relationship between a
religious corporation and its members is the latter's absolute adherence to a
common religious or spiritual belief . Once this basis ceases, membership in
the religious corporation must also cease. Thus, generally, there is no room
for dissension in a religious corporation. And where any member of a
religious corporation is expelled from the membership for espousing
doctrines and teachings contrary to that of his church, the established
doctrine in this jurisdiction is that such action from the church authorities is
conclusive upon the civil courts. Obviously recognizing the peculiarity of a
religious corporation, the Corporation Code leaves the matter of
ecclesiastical discipline to the religious group concerned. Section 91 of the
Corporation Code, which has been made explicitly applicable to religious
corporations by the second paragraph of Section 109 of the same Code,
provides for the termination of membership. It provides that "Membership
shall be terminated in the manner and for the causes provided in the articles
of incorporation or the by-laws. Termination of membership shall have the
effect of extinguishing all rights of a member in the corporation or in its
property, unless otherwise provided in the articles of incorporation or the bylaws." In fact, Long, et al. really have no reason to bewail the lack of prior
notice in the By-laws. They have waived such notice by adhering to those
By-laws. They became members of the CHURCH voluntarily. They entered
into its covenant and subscribed to its rules. By doing so, they are bound by
their consent. Even assuming that Long, et al.'s expulsion falls within the
Constitutional provisions on "prior notice" or "due process," still the Court
can not conclude that Basa, et al. committed a constitutional infraction.
Long, et al. were given more than sufficient notice of their impending
expulsion, as shown by the records.
Held:
Effect of the Death
of a Member or Shareholder
Having thus determined that the quorum in a members meeting is
to be reckoned as the actual number of members of the corporation, the next
question to resolve is what happens in the event of the death of one of them.