Grace Christian High School vs. CA, G.R. No. 108905. October 23, 1997

 GRACE CHRISTIAN HIGH SCHOOL vs. THE COURT OF APPEALS, GRACE VILLAGE ASSOCIATION, INC., ALEJANDRO G. BELTRAN, and ERNESTO L. GO

G.R. No. 108905. October 23, 1997

FACTS:

1. Petitioner is an educational institution offering preparatory, kindergarten and secondary courses at the Grace Village in Quezon City.
2. Private respondent Grace Village Association, Inc., on the other hand, is an organization of lot and/or building owners, lessees and residents at Grace Village, while private respondents Alejandro G. Beltran and Ernesto L. Go were its president and chairman of the committee on election, respectively, in 1990, when this suit was brought.
3. As adopted in 1968, the bylaws of the association provided in Article IV, as follows:. . . where they shall elect by plurality vote and by secret balloting, the Board of Directors, composed of 11 members to serve for 1 year until their successors are duly elected and have qualified.
4. It appears, that on December 20, 1975, a committee of the board of directors prepared a draft of an amendment to the bylaws; that there will be 14 directors and petitioner’s representative is a permanent Director of the association.
5. This draft was never presented to the general membership for approval.
6. Nevertheless, from 1975, after it was presumably submitted to the board, up to 1990, petitioner was given a permanent seat in the board of directors of the association.

ISSUE:

            Whether petitioner’s representative has the right of to sit in the board of directors as a permanent member

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RULING:

            The board of directors of corporations must be elected from among the stockholders or members. There may be corporations in which there are unelected members in the board but it is clear that in the examples cited by petitioner the unelected members sit as ex officio members, i.e., by virtue of and for as long as they hold a particular office. But in the case of petitioner, there is no reason at all for its representative to be given a seat in the board. Nor does petitioner claim a right to such seat by virtue of an office held. In fact it was not given such seat in the beginning. It was only in 1975 that a proposed amendment to the bylaws sought to give it one.

Since the provision in question is contrary to law, the fact that for fifteen years it has not been questioned or challenged but, on the contrary, appears to have been implemented by the members of the association cannot forestall a later challenge to its validity. Neither can it attain validity through acquiescence because, if it is contrary to law, it is beyond the power of the members of the association to waive its invalidity. For that matter the members of the association may have formally adopted the provision in question, but their action would be of no avail because no provision of the bylaws can be adopted if it is contrary to law.

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