Corporate Law Case Write-up [G.R. No.
206038, January 25, 2017]
LIM V. MOLDEX LAND, INC.
I. Facts of the case
Lim is a registered unit owner of a condominium
project of Moldex Land, Inc and a member of Condocor, a
non-stock, non-profit condominium corporation. Later,
Moldex became a member of Condocor based on its
ownership of 220 unsold units in the condominium.
The Board of Directors of Condocor had an
organizational meeting in 2008 and a general membership
meeting in 2012, where members of the Board of Directors
(respondents in this case) were elected however they were
non-unit buyers of the condominium.
In such 2012 meeting, the chairman declared the
existence of a quorum even though only 29 out of the 108 unit
buyers were present because the chairman based it on the
presence of majority of voting rights including those
pertaining to the 220 unsold condominium units held by
Moldex through its representatives (respondents).
Lim objected to the validity of the meeting which was
denied. Despite the objection, the election continued and
respondents, as representatives or proxies of Moldex, were
each elected to the positions of Chairman, Vice President,
Treasurer, and Corporate Secretary.
Lim filed an election protest, assailing the existence of
the quorum and the election that subsequently transpired.
G.R. NO: 206038
ARTICLE; TOPIC OF CASE: Board of Directors/Trustees and Officers
LIM V. MOLDEX LAND, INC.
II. Issue/s
1. Whether or not the proxies of Moldex were validly
elected to the Board of Directors – NO.
2. (Sub-issue) Whether or not there was a quorum – NO.
III. Held
As Moldex is a corporation, it can only act through
natural persons duly authorized for the purpose or by a
specific act of its Board of Directors. The corporation must
appoint its representatives or proxies.
Moldex had the right to send its proxies, subject to the
submission of a written notification to the Corporate
Secretary, as mandated by Section 58 of the Old Corporation
Code, which Moldex had complied with.
However, the governance and management of
corporate affairs in a corporation lies with its Board of
Directors in case of stock corporations, or Board of Trustees in
case on non-stock corporations. As the Board exercises all
corporate powers and authority expressly vested upon it by
law and by the corporations’ by laws, there are minimum
requirements set in order to be a director or trustee, one of
which is ownership of a share in one’s name or membership in
a non-stock corporation.
PONENTE: Mendoza, J.
DIGEST MAKER: LESHEN, Brian Earl A.
 Corporate Law Case Write-up
LIM V. MOLDEX LAND, INC.
While Moldex may designate its proxies, such proxies
cannot be elected as directors or trustees of Condocor as the
Old Corporation Code provides that a director or trustee must
be a member of record of the corporation, and the power of
the proxy is merely to vote. If the proxy is not a member in
his/her own right, he/she cannot be elected as a director or
proxy.
Likewise, Section 25 of the Old Corporation Code
mandates that the President shall be a director, hence, since
the representative elected as President was not a director, it
was null and void.
The same provision also allows the election of other
officers as may be provided for in the by-laws. Condocor’s by-
laws require that the Vice President and Secretary must be
directors, hence, the election of the representatives to such
position was null and void as well
The election of the representative to the position of
Treasurer would have been valid, however, since the general
membership meeting was null and void due to the non-
existence of the quorum, the election was null and void too.
2. In non-stock corporations, quorum is determined by
the majority of its actual members. Under Philippine
Corporate laws, for a meeting to be valid, one of the requisites
is that the quorum and voting requirements must be met.
G.R. NO: 206038
ARTICLE; TOPIC OF CASE: Board of Directors/Trustees and Officers
[G.R. No. 206038, January 25, 2017]
LIM V. MOLDEX LAND, INC.
For stock corporations, the quorum is based on the
number of outstanding voting stocks. While for non-stock
corporations, only those who are actual, living members with
voting rights shall be counted in determining the existence of
a quorum.
In non-stock corporations, the basis in determining the
presence of a quorum is the numerical equivalent of all
members entitled to vote, unless some other basis is provided
by the by-laws. The qualification “with voting rights”
recognizes the power of a non-stock corporation to limit or
deny the right to vote of any of its members.
Section 6 of Condocor’s bylaws states that “the
attendance of a simple majority of the members who are in
good standing shall constitute a quorum.” Those in “good
standing” are those not “delinquent members.”
In this case, the quorum during the 2012 meeting
should have been the majority of Condocor’s members in
good standing. There was no quorum as there was only 29 of
the 108 unit buyers present.
IV. Critic
The ruling in this case is still good law.
The provision regarding the election of the Board of
Directors or Trustees under Sections 23 and 24 of the Old
PONENTE: Mendoza, J.
DIGEST MAKER: LESHEN, Brian Earl A.
 Corporate Law Case Write-up [G.R. No. 206038, January 25, 2017]

LIM V. MOLDEX LAND, INC. LIM V. MOLDEX LAND, INC.

Corporation Code has now been carried over to Section 22

and 23 of the Revised Corporation Code, respectively.

Also, the provision on the disqualification of Directors,

Trustees, or Officers has been expanded under Section 26 of
the Revised Corporation Code.

The provision regarding proxies in the Old Corporation

Code under Section 58 has now been carried over to Section
57 of the Revised Corporation Code.

Hence, proxies still have with them the right to vote in

behalf of who they’re representing, and can only be elected if
they are eligible, subject to the requirements of the Revised
Corporation Code and the by-laws of such corporation.

G.R. NO: 206038 PONENTE: Mendoza, J.

ARTICLE; TOPIC OF CASE: Board of Directors/Trustees and Officers DIGEST MAKER: LESHEN, Brian Earl A.