Felino B. Austria vs. Bagong Barangay Condominium Corp., et al.

[SEC-SICD * CASE NO. 3235. October 1, 1990.] FELINO B. AUSTRIA , petitioner , vs . BAGONG BARANGAY CONDOMINIUM CORP., ET AL. , respondents . D E C I S I O N Petitioners assert that they are members and incumbent directors of the Bagong Barangay Condominium Corp., Inc. hereinafter referred to as BBCCI; that pursuant to the provisions of the by-laws of the BBCCI the election of directors was set on December 14, 1986 and the guidelines for holding the election was circularized to the residents of the Condominium; that in view of SEC Case No. 3091, filed by Manolo Antonio and Eugenio Lindo against the Condominium, the National Housing Authority (NHA for brevity) and Mr. Jose Atienza, in his capacity as Manager of NHA and Chairman of the Board of Directors of the Condominium, the election was not conducted; that during the pendency of the case, respondent Jose Atienza, Jr. making use of his office as General Manager of the National Housing Authority and as Chairman of the Board of Directors of the Condominium, majority of which is controlled by the NHA, manipulated the approval on April 6, 1987 of a new set of by-laws; that on account of the politicking of Mr. Jose Atienza, Jr. the set of by-laws was submitted for ratification in the general assembly on April 2, 1987; that due to the politicking of Mr. Jose Atienza, Jr. the set of by-laws was submitted for ratification in the general assembly on April 12, 1987 and the petitioners were informed that all these unit occupants, whether members or not as contemplated in the by-laws were allowed to vote; that the new set of by-laws was allegedly submitted to this Commission and appears to have been approved by the Commission on July 20, 1987 inspite of the pendency of SEC Case No. 3091; that in the meeting of the board of directors on July 30, 1987, the holding of a special election was approved; that the board of directors agreed in the said meeting that only members of good standing will be qualified to become a candidate for director and one who complies with the duties and responsibilities of a member in Article III, Sec. 3 of the new set of by-laws; that the Board of Election Inspectors circulated to the residents in the Condominium the Patakaran Sa Espesyal na Halalan Para sa Mga Bagong Miyembro/Kasapi ng Board of Directors ng Bagong Barangay Condominium Corporation, which, among others, provides under paragraph No. 9 Sinu-sino ang maaaring kumandidato? quoted hereunder: "9. Sinu-sino ang maaaring kumandidato? "9.1. Mga taong nasa talaan ng "Registered Fully Paid Awardees" o Regular Members ng BBC, may illegal extension man o wala; bayad o hindi sa kanilang assessment fees;" xxx xxx xxx Petitioners therefore pray, among others, for the nullification of the new set of by-laws of respondent condominium as well as the Patakaran and for the respondent Condominium to strictly implement the provisions of the Master Deed with Declaration of Restrictions provided in the Articles of Incorporation and by-laws of the Condominium. Respondents made specific demands and aver that the Patakaran was duly approved by the Board in accordance with the provisions of the by-laws; that the overwhelming participation of 325 out of 480 members in the elections is a strong manifestation of their trust and confidence in their leadership; that even the more or less ten members of petitioner's group voted in said elections. The issue revolves on whether or not the alleged new set of by-laws of respondent corporation as well as the Patakaran may be nullified. Both parties through their respective counsel adduced testimonial and documentary evidence. LLphil As found by this Commission, a new set of by-laws has been adopted by a vote of the majority of the Board of Directors on March 23, 1987 and by two-thirds of the members of the corporation on April 12, 1987. On July 10, 1987, the Commission approved the new set of by-laws. The petition of the instant case, however, was filed only subsequently on September 29, 1987. Thus, it could not be said that the approval of the new set of by-laws should have been held in abeyance for its approval came much earlier than the filing of the petition in the instant case. This new set of by-laws is approved with the formal issuance of a Certificate of Filing of New By-laws by this Commission. Thus, this new set of by-laws is the internal rules of the organization that governs the rights, qualifications, and privileges among the members. However, since the petitioners failed to rebut respondents' assertion that the Patakaran has been promulgated by the Board of Election Inspectors and approved by the Board of Directors, the calling of a special membership meeting for the purpose of whether or not to incorporate the provisions of the Patakaran in the by-laws to reflect the true and popular will of the members must be taken up with the members. The election held last October 4, 1987, however, was invalid for the reason that there was a suspension of the efficacy of the provisions of the by-laws in so far as the qualifications of the members to vote are concerned. Such fact has been admitted by the respondents themselves in their Answer. The set of directors and officers elected prior to October 4, 1987 shall remain as the hold-over board and officers of the association who shall call for a special meeting for the purpose of electing the directors of the association pursuant to the by-laws. WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered: 1. Declaring the new set of by-laws approved by this Commission as valid and binding; 2. Declaring the Patakaran promulgated by the Board of Election Inspectors and approved by the Board of Directors, as valid and binding; 3. Declaring the election held on October 4, 1987 as invalid; 4. Directing the hold-over board and officers of the Association to call a special meeting of the members for the purpose of determining whether or not to amend the by-laws to incorporate the provisions of the Patakaran within TWENTY (20) days from receipt herein; and finally, 5. Directing the hold-over board and officers of the Association to call a special meeting of the members pursuant to the by-laws for the purpose of electing the board of directors within THIRTY (30) days after the holding of the special meeting for the amendments of by-laws has been conducted. cdll SO ORDERED. (SGD.) JOSEFINA L. PASAY-PAZ Hearing Officer