Kiener Hills Mactan Condominium Corp. v. Rennie

FIRST DIVISION

[G.R. No. 258279. November 29, 2022.]

KIENER HILLS MACTAN CONDOMINIUM CORPORATION (KHMCC), E. GANZON, INC. (EGI), AND EGI PROPERTIES, INC. (EGIPI), petitioners, vs.DALE R. RENNIE, SPS. DENNIS D. JAVELLANA, KATHLEEN SUSAN KIENER-JAVELLANA, LINUS TAM KWOK WAI, PAK YEUNG YIP, BRUCE SINCLAIR VAUGHAN, STEPHEN GERARD DRESSLER, MADELINE KIENER THOMAN, SCOTT HITCHMAN, ROGER KENNETH LARS LUNDGREN, PACIFIC CONCORD PROPERTIES, INC., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedNovember 29, 2022which reads as follows:

"G.R. No. 258279 (Kiener Hills Mactan Condominium Corporation (KHMCC), E. Ganzon, Inc. (EGI), and EGI Properties, Inc. (EGIPI) v. Dale R. Rennie, Sps. Dennis D. Javellana, Kathleen Susan Kiener-Javellana, Linus Tam Kwok Wai, Pak Yeung Yip, Bruce Sinclair Vaughan, Stephen Gerard Dressler, Madeline Kiener Thoman, Scott Hitchman, Roger Kenneth Lars Lundgren, Pacific Concord Properties, Inc.). — This Petition for Review on Certiorari1 assails the Decision 2 dated 23 February 2021 and the Resolution 3 dated 02 November 2021 of the Court of Appeals (CA) in CA-G.R. SP No. 11670. The CA denied the Petition for Review filed by petitioners Kiener Hills Mactan Condominium Corporation (KHMCC), E. Ganzon, Inc. (EGI), and EGI Properties, Inc. (EGIPI) and affirmed the Decision 4 dated 21 February 2018 of the Regional Trial Court, 7th Judicial Region, Branch 11, Cebu City (RTC) in Civil Case No. SRC-178-CEB. The RTC ruled in favor of respondents, finding that all KHMCC members have voting rights equivalent to their appurtenant interest, regardless of their payment or non-payment of association dues. Petitioners were ordered to conduct a full audit and inventory of units of Kiener Hills Mactan Condominium (KHMC), submit a report on the audit and inventory, and pay respondents litigation costs and attorney's fees of P100,000.00.

After a judicious review of the case, the Court resolves to DENY the petition for failure on the part of petitioners to sufficiently show any cogent reason why the decisions of the RTC and the CA should be reversed. These courts uniformly found that there is no basis for KHMCC's imposition of the "Quorum Rule" or that only members in "good standing" or without unsettled dues with KHMCC may be considered in determining the presence of a quorum and may be allowed to vote in corporate meetings. Petitioners failed to show that the lower courts' findings are not based on substantial evidence or that their decisions are contrary to applicable law and jurisprudence.

Section 52 of the Corporation Code 5 provides that a quorum in meetings of non-stock corporations shall consist of a majority of the members, unless otherwise provided for in the Corporation Code or in the corporation's by-laws. Meanwhile, Section 24 of the same Code provides that at all elections of trustees, there must be present, either in person or by a representative authorized to act by written proxy, a majority of the members entitled to vote. Voting rights of members of a non-stock corporation attach to their membership. 6 Section 89 of the Corporation Code states that "[t]he right of the members of any class or classes to vote may be limited, broadened or denied to the extent specified in the articles of incorporation or the by-laws. Unless so limited, broadened or denied, each member, regardless of class, shall be entitled to one vote."

In this case, KHMCC's Articles of Incorporation (AOI) provides that membership shall be represented by percentages of participation, which shall be equal to the appurtenant interest of the unit in the common areas of the condominium project. 7 KHMCC's By-Laws provides that the presence of members representing a majority of the voting power of the corporation shall constitute a quorum. 8 Relatedly, KHMCC's Master Deed provides that only unit owners are entitled to vote or have voting rights, to the extent of their acquired interest, in any meeting where voting is called for. 9 Thus, the CA correctly found that that there is no provision under KHMCC's AOI, By-Laws, and Master Deed prohibiting any member who failed to pay his or her dues in full or on time to validly participate during meetings and to cast his or her vote. Based on KHMCC's AOI, By-Laws, and Master Deed, a member may vote up to the extent of his or her appurtenant interest, and the presence of the majority of the members, in accordance with their appurtenant interest and proprietary interest, whether in good or bad standing, would constitute quorum. Consequently, unless there is an express charter or statutory provision to the contrary, every KHMCC member has a right to be present and to vote in all corporate meetings.

The CA likewise correctly upheld the award of attorney's fees as respondents were compelled to litigate and incur expenses to protect their interests and rights as members of KHMCC. 10 KHMCC's imposition of its "Quorum Rule," without legal basis, led to years where respondents were prevented from exercising their right to vote in corporate meetings, including their right to vote and be voted upon as trustee of KHMCC.

Pursuant to this Court's ruling in Nacar v. Gallery Frames, 11 there is a need to modify the judgment by imposing legal interest at the rate of six percent (6%) per annum on the total monetary award from the finality of this Resolution until its full satisfaction. 12

WHEREFORE, the petition is DENIED. The assailed Decision dated 23 February 2021 and the Resolution dated 02 November 2021 of the Court of Appeals in CA-G.R. SP No. 11670 are AFFIRMED with the MODIFICATION that the total monetary awards in favor of respondents shall earn legal interest at the rate of six percent (6%) per annum from the date of finality of this Resolution until full payment.

The Entry of Appearance of Atty. Ronald S. Baquiano, CPA, of Baquiano and Associates Law Office as counsel for the respondent Spouses Dennis D. Javellana and Kathleen Susan Kiener-Javellana and for other respondents and their successor-in-interest, is NOTED; and the petitioners and Atty. Ronald S. Baquiano are required to SUBMIT, within five (5) days from notice hereof, the soft copies in compact disc, USB or e-mail containing the PDF files of the signed petition for review on certiorari and the signed entry of appearance, respectively, pursuant to A.M. Nos. 10-3-7-SC and 11-9-4-SC.

SO ORDERED." Marquez, J., on official business.

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

Footnotes

1. Rollo, pp. 39-130.

2. Id. at 15-30. Penned by Associate Justice Dorothy P. Montejo-Gonzaga and concurred in by Associate Justices Gabriel T. Ingles and Bautista G. Corpin, Jr.

3. Id. at 33-35. Penned by Associate Justice Dorothy P. Montejo-Gonzaga and concurred in by Associate Justices Gabriel T. Ingles and Bautista G. Corpin, Jr.

4. Id. at 204-227. Penned by Presiding Judge Ramon B. Daomilas, Jr.

5. Batas Pambansa Blg. 68 Entitled "THE CORPORATION CODE OF THE PHILIPPINES." Approved: 01 May 1980.

6. Tan v. Sycip, 530 Phil. 609, 623 (2006).

7. Rollo, p. 271.

8. Id. at 275.

9. Id. at 255.

10. CIVIL CODE, Art. 2208; Lao v. Yao Bio Lim, 816 Phil. 366, 287 (2017).

11. 716 Phil. 267 (2013).

12. Id. at 281-283. See also Zaragoza v. Iloilo Santos Truckers, Inc., 811 Phil. 834 (2017).