Case Summary (G.R. No. L-22684)
Authority to Extend the Term by Majority Vote
Read holistically, Part VI grants the lot-owner membership body the authority not only to cancel but to modify the duration of the restrictions. The successor-in-interest to the original developer (Ayala Land, Inc.) confirmed that the fifty-year term was integral to the covenant and subject to amendment. Prior rulings by this Court, the HLURB, the Office of the President, and the Court of Appeals uniformly recognized this power. The Supreme Court affirms that the Association may, by majority vote, extend the term of effectivity beyond the original fifty years.
Validity of Proxy Votes under the Corporation Code
Section 58 of the Corporation Code requires only that proxies be in writing, signed by the member, and filed before the meeting; notarization is not mandated. Section 47(4) allows by-laws to prescribe proxy formality, but Bel-Air Village Association’s by-laws impose no additional requirement. Consequently, proxies presented at the December 12, 2006 meeting were valid, established quorum, and legitimately carried the vote to extend the term.
Compulsory Membership and Freedom of Association
Automatic membership arises by operation of annotation on the certificate of title. Under Section 39, purchasers hold title subject to such annotations as valid encumbrances. This private contractual condition, voluntarily accepted by lot buyers when they acquired title, does not invoke the constitutional right to freedom of association— a guarantee enforceable only against the State. Prior jurisprudence (Bel Air
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Background
- In the 1950s, Makati Development Corporation developed Bel-Air Village, a residential subdivision in Makati City, and sold lots subject to Deed Restrictions.
- The Deed Restrictions ran for fifty years, from January 15, 1957 to January 15, 2007.
- Bel-Air Village Association, Inc. (Association) was formed as a non-stock, non-profit homeowners’ association; all lot owners automatically became members.
Deed Restrictions
- Part I: Automatic membership, obligation to abide by rules, and collection of assessments as liens subordinate only to government taxes and voluntary mortgages.
- Part II: Use of lots restricted to residential purposes, limits on subdivision and signs, prohibition of livestock, easements for drainage and utilities, and upkeep requirements.
- Part III: Architectural controls mandating building materials, height limits, plan approval, minimum construction cost, and setback requirements.
- Part IV: Sewage disposal by septic tanks or public system, with maintenance obligations.
- Part V: Perimeter wall height limit of two meters (excluding live vegetation).
- Part VI (Term of Restrictions): “The foregoing restrictions shall remain in force for fifty years from January 15, 1957, unless sooner cancelled in its entirety by two-thirds vote of members… However, the Association may, from time to time, add new ones, amend or abolish particular restrictions or parts thereof by majority rule.”
- Part VII: Enforcement by court action by the Association, Makati Development Corporation (or assigns), or any registered owner.
Amendment Initiative
- 1998: Association formed the “2007 Committee” to propose amendments before expiration.
- June 2006: Annual meeting discussed proposed revisions to the Deed Restrictions.
- September 2006: Proposed amendments circulated to homeowners.
- October 2006: Board resolution called for amendment of Deed Restrictions.
- First proposed amendment extended the term to August 23, 2032, concurrent with the life of the Association, subject to two-thirds cancellation vote and majority rule for other amendments.
- December 12, 2006: Special membership meeting attended by 718 of 934 eligible members; 72% voted for extension, 3% against, 25% abstained.
Verified Complaint Before HLURB
- February 8, 2007: Cezar Yatco Real Estate Services, GRD Property Resources, Masterman Land Corporation, Gamaliel Pascual, Jr., Ma. Lourdes Limjap Pascual, Sofia Limjap, and Aurora Pijuan filed a Verified Complaint with HLURB.
- They alleged the Deed Restrictions expired on January 15, 2007 and contained no extension provision.
- They contended the Association’s extension resolution was illegal, that no quorum was reached due to unnotarized proxies, and that forced membership violated their rights.
HLURB Regional Field Office Decision (May 21, 2008)
- Declared the extension of the Deed Restrictions null and void, ruling the 50-year term was m