Dear PAO,

I am a single mother and a homeowner. I was away picking up my child from her therapist when our homeowners’ association held a meeting and made some decisions without my presence. I told the association that it could not make any decisions about our village without me, but they told me that more than a majority of the homeowners were at the meeting, that a quorum was present, and that they allegedly had enough members to proceed. I do not believe that for a second because I think that a “quorum” means all homeowners. Am I wrong?

Qaren

Dear Qaren,

Unfortunately, you are mistaken. A quorum does not mean every single member of a particular group. In simple terms, it means a sufficient number of members, usually a majority thereof, present to conduct group business.

Indeed, the Supreme Court, speaking through Associate Justice Jose Catral Mendoza, in the case of Mary E. Lim vs. MOLDEX Land, Inc., et al. (G.R. No. 206038, January 25, 2017), stated the following:

“In corporate parlance, the term ‘meeting’ applies to every duly convened assembly either of stockholders, members, directors, trustees, or managers for any legal purpose, or the transaction of business of a common interest. Under Philippine corporate laws, meetings may either be regular or special. A stockholders’ or members’ meeting must comply with the following requisites to be valid:

“1. The meeting must be held on the date fixed in the By-Laws or in accordance with law;

“2. Prior written notice of such meeting must be sent to all stockholders/members of record;

“3. It must be called by the proper party;

“4. It must be held at the proper place; and

“5. Quorum and voting requirements must be met.

“Of these five requirements, the existence of a quorum is crucial. Any act or transaction made during a meeting without quorum is rendered of no force and effect, thus, not binding on the corporation or parties concerned.

“In relation thereto, Section 52 of the Corporation Code of the Philippines (Corporation Code) provides:

“Section 52. Quorum in meetings. – Unless otherwise provided for in this Code or in the by-laws, a quorum shall consist of the stockholders representing a majority of the outstanding capital stock or a majority of the members in the case of non-stock corporations.

“Thus, 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.

“To be clear, the basis in determining the presence of quorum in non-stock corporations is the numerical equivalent of all members who are entitled to vote, unless some other basis is provided by the By-Laws of the corporation. The qualification ‘with voting rights’ simply recognizes the power of a non-stock corporation to limit or deny the right to vote of any of its members. To include these members without voting rights in the total number of members for purposes of quorum would be superfluous for although they may attend a particular meeting, they cannot cast their vote on any matter discussed therein. xxx”

Simply put, your absence during the meeting of the homeowners’ association will not have an effect on the latter’s subsequent decision on certain matters if it is proven that there was a quorum present and the decision was supported by the required number of members present. For purposes of complying with legal requirements, they had enough to do business.

We hope that we were able to answer your queries. This advice was based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Thank you for your continued trust and support.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected].