G.R. No. 206038 , January 25, 2017
MARY E. LIM, represented by her Attorney-in-fact, REYNALDO V. LIM, Petitioner, vs. MOLDEX LAND, INC., 1322 ROXAS BOULEVARD CONDOMINIUM CORPORATION, and JEFFREY JAMINOLA, EDGARDO MACALINTAL, JOJI MILANES, and CLOTHILDA ANNE ROMAN, Respondents.

FACTS

Petitioner Mary E. Lim, a unit owner and member of respondent 1322 Roxas Boulevard Condominium Corporation (Condocor), challenged the validity of the July 21, 2012 Annual General Membership Meeting. During the meeting, the corporate secretary and chairman declared a quorum based on the presence of a majority of voting rights. This majority was achieved primarily through the voting rights attached to 220 unsold units owned by the developer, Moldex Land, Inc., whose representatives (the individual respondents) were present. Only 29 of the 1088 unit buyers were physically present. Lim objected, arguing the meeting lacked a quorum as Moldex, not being a unit buyer, should not be considered a member entitled to vote. Her objection was overruled, leading to a walkout by most unit owners. The meeting proceeded, electing the individual respondents to the Board of Directors.
The Regional Trial Court (RTC), acting as a special commercial court, dismissed Lim’s complaint. It ruled that a quorum was validly constituted based on total voting rights, including those from Moldex’s unsold units. The RTC held that Moldex, as the registered owner of the unsold units, was a member of Condocor in good standing, and its representatives could rightfully vote and be elected.

ISSUE

The primary issues were: (1) the validity of the July 21, 2012 membership meeting; (2) whether Moldex could be deemed a member of Condocor; and (3) whether a non-unit owner could be elected to the Condocor Board.

RULING

The Supreme Court reversed the RTC and declared the July 21, 2012 meeting and the subsequent elections null and void. The legal logic centered on the interpretation of Condocor’s By-Laws and the applicable provisions of the Corporation Code and the Condominium Act (RA 4726).
First, the Court held that the quorum for Condocor’s membership meeting must be based on the number of members in good standing, not on the aggregate of voting rights. Condocor’s By-Laws defined a member as a unit owner. The Corporation Code (Section 52) provides that a quorum in non-stock corporations is based on a majority of the members entitled to vote. Here, the developer Moldex, while the owner of unsold units, was correctly considered a member. However, the quorum calculation was still flawed. The Court found that the RTC erroneously used the total number of voting rights (73,376) as the denominator. The correct basis was the number of member-units. With 1088 units, a majority required the presence of at least 545 members. Only 29 unit-owner members were present. Even counting Moldex as one member-entity, the total physical attendance was only 30 members, far short of the required majority. Therefore, no valid quorum existed.
Second, on the election of the individual respondents, the Court ruled that under Section 10 of the Condominium Act, only unit owners or their duly authorized representatives are qualified for election to the board of a condominium corporation. The individual respondents were not unit owners, and while they represented Moldex, a juridical entity, they could not be considered