Rodriguez vs. Pastorfide, et al.

A designated authorized representative of a corporate member of a condominium corporation, appointed under by-laws that confer authority for all purposes and treat the representative as a member, may sit on the board of directors even without being a unit-owner in his own right; the member-corporation is deemed the actual director. The rule in Lim v. Moldex Land, Inc. — which bars a proxy from being elected director unless the proxy is a member in his own right — does not govern where the representative’s authority extends beyond voting and includes the right to be elected to the board.

Medical Plaza Makati Condominium Corporation (MPMCC) is the condominium corporation of Medical Plaza Makati Condominium (MPMC). Its by-laws provide that only registered unit-owners are members and that directors must be elected from among members in good standing. Several units are owned by corporations — Pastorfide Land Corporation and Maxicare Health Corporation — which are themselves members in good standing. The by-laws also contain a representation clause: when a unit is owned by a corporation, its authorized officers shall designate a representative, and that representative shall be considered a member for all purposes, in all matters related to the corporation. The by-laws separately provide for proxies, underscoring the difference between a proxy with limited voting authority and a representative with plenary powers.

• The By-Laws: MPMCC’s By-Laws stipulate that only registered owners of condominium units in MPMC are members of the corporation. Directors are elected by and from among members in good standing. Section 4 on Representation provides that when a unit is owned by a corporation, its authorized officers shall designate a representative; the person so designated shall be considered a member representing the unit “for all purposes, in all matters related to the corporation, including … voting on any matter, and the like.” The By-Laws separately provide for proxies with limited voting authority.

• The 2018 Election: On October 16, 2018, during MPMCC’s 20th Annual General Membership Meeting, the election of the seven-member Board of Directors was conducted. Pastorfide presided and announced an official list of seven candidates, which included himself, Monteblanco, Matibag, and Angeles.

• Objection to Qualifications: Objections were raised against Pastorfide, et al. on the ground that they were not unit-owners in their own right. It was confirmed that they were representatives of member-corporations: Pastorfide, Monteblanco, and Angeles represented Pastorfide Land Corporation; Matibag represented Maxicare Health Corporation. The corporations were members in good standing with no delinquent dues or assessments. Pastorfide, et al. maintained they were qualified as designated authorized representatives under the By-Laws.

• Election Declared: Because there were only seven candidates for seven seats, the Election Committee declared all candidates, including Pastorfide, et al., as elected members of the Board without conducting a vote.

• Complaint: Rodriguez, a unit-owner and member of MPMCC, filed an election contest before the RTC, seeking to declare the election of the four respondents null and void.

• Non-Membership under the Law and By-Laws: Rodriguez argued that under the Condominium Act, the Revised Corporation Code, and MPMCC’s By-Laws, only unit-owners in their own right could be elected as directors. Pastorfide, et al. were not registered unit-owners and therefore disqualified.

• Application of Lim v. Moldex Land, Inc.: Rodriguez maintained that Lim squarely applied because the respondents were akin to proxies or representatives who were not themselves members, and under that precedent they could not be elected to the board.

• Designated Authorized Representatives, Not Proxies: Pastorfide, et al. countered that they were not mere proxies; they were designated authorized representatives under Section 4 of MPMCC’s By-Laws, whose authority extended to all purposes and who were treated as members. Consequently, Lim was inapplicable.

• Exercise of Corporate Membership Rights: They argued that the member-corporations, as juridical persons, could only act through natural persons, and electing their representatives to the board was a legitimate exercise of the corporations’ membership rights.

• Distinction from Lim v. Moldex Land, Inc.: Whether the prohibition in Lim v. Moldex Land, Inc. — which bars a proxy from being elected director unless the proxy is a member in his own right — applies to authorized representatives designated under condominium corporation by-laws that confer plenary authority for all purposes.

• Eligibility of an Authorized Representative: Whether a natural person designated as the authorized representative of a corporate unit-owner may be elected to the board of directors of a condominium corporation even though that person is not a unit-owner individually.

• Distinction from Lim v. Moldex Land, Inc.: Lim was not controlling. In Lim, the issue concerned proxies whose authority was limited to voting, and the Supreme Court applied the Corporation Code’s requirement that a director must be a member of record. In contrast, Pastorfide, et al. were designated authorized representatives under Section 4 of MPMCC’s By-Laws, which mandates that the representative be considered a member “for all purposes, in all matters related to the corporation.” The By-Laws’ separate provision for proxies reinforced that a representative under Section 4 possesses broader authority than a mere voting proxy. Hence, Lim did not govern.

• Eligibility of an Authorized Representative: A natural person designated as the authorized representative of a corporate member may sit on the board. The member-corporation itself is deemed the actual member occupying the board seat, with the representative merely acting on its behalf. The member-corporations were undisputedly members in good standing and owned units; they therefore had the right to be elected to the board. Because only natural persons can perform the duties of a director, the corporation must appoint a natural person to act for it. To interpret the law and by-laws otherwise would deprive corporate members of their essential ownership right to participate in management solely on account of their juridical personality — an absurd and discriminatory result. It was emphasized, however, that a member-corporation may appoint only one natural person as its representative for purposes of board election; otherwise, the corporation could improperly occupy more than one board seat and create biased power dynamics.

• Distinction Between Proxy and Authorized Representative — A proxy possesses limited authority to vote and, under Lim v. Moldex Land, Inc., cannot be elected director unless the proxy is also a member of the corporation in his own right. An authorized representative designated under a by-law that confers authority “for all purposes, in all matters related to the corporation” and treats the representative as a member is not a mere proxy; such a representative may be elected to the board because the member-corporation itself is deemed the actual director, acting through the representative. The representative need not be a unit-owner individually.

• Corporate Member’s Right to Board Representation — A juridical entity that is a member of a condominium corporation possesses the right to be elected to the board of directors. Since a juridical person can only act through natural persons, it may appoint a natural person as its representative for that purpose. Denying this right would be an absurd, discriminatory deprivation of a fundamental incident of membership.

• One-Representative Rule — When a member-corporation appoints a representative to sit on the board, it may designate only one natural person. Allowing a single corporate member to appoint multiple representatives would enable it to occupy more than one board seat and create imbalanced, potentially detrimental, power dynamics.

• “In contrast, in this case, Pastorfide, et al. are designated authorized representatives of the corporation according to MPMCC's By-Laws … [They] are not limited to being mere proxies … the authority of the representatives … extends to all purposes in all matters related to the corporation.”

• “[T]he member-corporations are themselves deemed to be the actual members sitting on the board of MPMCC, with their representatives merely acting on their behalf.”

• “To argue that Pastorfide, et al. must be unit-owners in their own right in order to be qualified to sit on MPMCC's Board is erroneous, since they are not the members themselves, but the member-corporation whom they represent.”

• “[T]he member-corporation may appoint only one natural person to act as its representative for purposes of election to the Board. Otherwise, the member-corporation will be occupying more than one seat in the Board … which can be detrimental to the interests of the corporation.”

• Lim v. Moldex Land, Inc., 804 Phil. 341 (2017) — Distinguished. The case held that a proxy of a corporate member cannot be elected as director unless the proxy is also a member in his own right. Here, the respondents were not proxies but authorized representatives with plenary authority under the by-laws, making Lim inapplicable.

• Legaspi Towers 300, Inc. v. Muer, 688 Phil. 104 (2012) — Cited for the principle that a subsequent election of a new board may render a petition to nullify the prior election moot and academic. The Court acknowledged possible mootness but invoked the exception of “capable of repetition, yet evading review.”

• Presidential Commission on Good Government v. Cojuangco, Jr., G.R. Nos. 215527-28, March 22, 2023 — Cited for the two-element test of the “capable of repetition, yet evading review” exception: the challenged action is too short in duration to be fully litigated before it ceases, and there is a reasonable expectation that the same complaining party will be subjected to the same action again.

• Section 23, Corporation Code (Batas Pambansa Blg. 68) — Provided that directors must be elected from among members/stockholders and must own at least one share or be members. The Court noted this as the statutory anchor of Lim, but distinguished the case on the basis of the broader by-law authority granted to representatives.

• Section 92, Corporation Code — Required trustees of non-stock corporations to be members. Invoked in Lim but not dispositive here due to the representative structure of the by-laws.

• Section 4, MPMCC By-Laws (Representation) — Allowed corporate unit-owners to designate an authorized representative who shall be considered a member “for all purposes, in all matters related to the corporation.” The Court held that this provision encompassed the right to be elected to the board and distinguished the representative from a mere proxy.

• Section 13, MPMCC By-Laws (Composition, Election and Term of Office) — Stated that the Board is composed of members elected by and from among members in good standing. Read in harmony with Section 4, this permitted corporate members to sit on the board through their representatives.

Caguioa (Chairperson), Inting, Gaerlan, and Dimaampao, JJ., concurred.