G.R. No. 188307 , August 2, 2017
Multinational Village Homeowners’ Association, Inc., et al. vs. Arnel M. Gacutan, et al.

FACTS

The case involves an intra-corporate dispute between two factions within the Multinational Village Homeowners’ Association, Inc. (MVHAI). In January 2005, the incumbent Board of Directors (respondents) scheduled the annual election. Two days prior, a member obtained a restraining order from the HLURB-NCRFO against proxy voting. The association’s own Election Committee then postponed the election. However, a majority of members constituted a new committee and proceeded with the election, resulting in the victory of the petitioners. Respondents refused to relinquish their posts, declaring themselves hold-over directors. Petitioners filed an election contest with the HLURB-NCRFO, which initially nullified the 2005 election for being called without authority and ordered a turnover to the old board.
The case underwent a protracted appellate process. The HLURB Board of Commissioners reversed the field office, validating the 2005 election. The Office of President (OP) then reversed the Board of Commissioners, reinstating the field office’s nullification. Subsequently, the OP issued a Clarificatory Resolution and another resolution effectively affirming the petitioners’ later 2007 election. The Court of Appeals nullified these later OP resolutions, reinstated the OP’s initial 2006 decision against the 2005 election, and declared respondents as hold-over directors since 2005, setting aside all intervening elections.

ISSUE

Whether the Court of Appeals erred in nullifying the Office of the President’s Clarificatory and June 18, 2007 Resolutions and in declaring respondents as the lawful hold-over directors.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals. The Court held that the Office of the President (OP) gravely abused its discretion in issuing the Clarificatory Resolution and the Resolution dated June 18, 2007. The OP’s initial Decision dated May 16, 2006 had already attained finality. This decision reinstated the HLURB-NCRFO ruling which nullified the 2005 election and directed the peaceful turnover of the clubhouse and records to the respondents (the 2004 board), and the constitution of an Ad Hoc Election Committee. The subsequent resolutions, which effectively affirmed a later 2007 election won by petitioners, contravened this final and executory decision. The OP cannot amend a final decision through a clarificatory resolution; such an act constitutes an unauthorized modification of a judgment that has already become final.
Consequently, the legal effect of the final May 16, 2006 OP Decision was to invalidate the 2005 election and restore the status quo ante, which recognized the 2004 board. Under the association’s by-laws, directors hold office until their successors are duly elected and qualified. Since no valid election occurred to produce lawful successors, the respondents rightfully remained as hold-over directors from the expiration of their term. The Court of Appeals correctly ordered the HLURB to execute the final 2006 OP Decision, which mandated the turnover of association control to respondents and the conduct of a proper election under a neutral committee. All elections conducted in defiance of this final order were correctly set aside.