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04 Loyola Grand Vs CA (CD)
04 Loyola Grand Vs CA (CD)
They then discovered that there were other homeowners’ organization within the
subdivision – the North and South Association, and upon inquiry by the LGVHAI to
HIGC, it was discovered that LGVHAI was dissolved for its failure to submit its by-laws
within the period required by the Corporation Code. These paved the way for the
formation of the two other associations. LGVHAI then lodged a complaint and
questioned the revocation with the HIGC Hearing Officer Javier. Hearing Officer Javier
ruled in favor of LGVHAI and revoked the registration of the North and South
Associations.
Petitioner South Association appealed the ruling contending that LGVHAI failure to file
automatically dissolved the corporation.
Issue: Is the failure to file LGVHAI’s by-laws within the period prescribed by Sec. 46 of
the Corporation Code had the effect of automatically dissolving the said corporation.
Decision: No, ordinarily the word “must” connotes imposition of duty which
must be enforced however, the word “must” in a statute, (like “shall”) is not
always imperative. It may be consistent with an exercise of discretion. If the
language of a statute, considered as a whole with due regard to its nature
and object, reveals that the legislature intended to use the words “shall”
and “must” to be directory, they should be given that meaning.
ByLaws are indispensable to corporations, since they are required by law for an orderly
management of corporations. However, failure to file them within the period prescribed
does not equate to the automatic dissolution of a corporation.