Valle Verde Country Club, Inc. v.

Africa
G.R. No. 151969, September 4, 2009, (Brion, J.)
FACTS: In 1996, during the Annual Stockholders Meeting of Valle Verde Country Club, Inc. (VVCC),
Villaluna, Dinglasan, Makalintal, Ortigas III, Salta, Santiago, Jr., Dee, Sunico, and Gamboa were elected
as members of the VVCC Board of Directors. From 1997 to 2001, the requisite quorum for the holding of
the stockholders meeting could not be obtained. Consequently, the above-named directors continued to
serve in the VVCC Board in a hold-over capacity.
In 1998, Dinglasan resigned from his position. He was replaced by Roxas who was elected by the board
still constituting a quorum. A year later, Makalintal also resigned and was replaced by Jose Ramirez in
2001. Ramirez was elected by the remaining members of the Board.
Africa, a member of VVCC, questioned the election of Roxas and Ramirez with the SEC and the RTC,
respectively. Before the RTC, Africa alleged that a year after Makalintals election as member of the
VVCC Board in 1996, his term as well as those of the other members of the VVCC Board should be
considered to have already expired. According to him, for the members to exercise the authority to fill in
vacancies in the board of directors, that there should be an unexpired term during which the successormember shall serve. Further, that the resulting vacancy should have been filled by the stockholders in a
regular or special meeting called for that purpose, and not by the remaining members of the VVCC
Board, as was done in this case.
The RTC and the SEC ruled in favor of Africa. VVCC filed a petition for review on certiorari.
ISSUE: Whether or not the remaining directors of the corporations Board, still constituting a quorum,
can elect another director to fill in a vacancy caused by the resignation of a hold-over director.
RULING: Petition DENIED. Under Section 29 of the Corporation Code, a vacancy occurring in the
board of directors caused by the expiration of a members term shall be filled by the corporations
stockholders. As the vacancy in this case was caused by Makalintals resignation, not by the expiration of
his term, VVCC insists that the board rightfully appointed Ramirez to fill in the vacancy.
The holdover period is not part of the term of office of a member of the board of directors. In several
cases, we have defined "term" as the time during which the officer may claim to hold the office as of
right, and fixes the interval after which the several incumbents shall succeed one another. The term of
office is not affected by the holdover.
Section 23 of the Corporation Code declares that the term of the members of the board of directors shall
be only for one year; their term expires one year after election to the office. After the lapse of one year
from his election, Makalintals term of office is deemed to have already expired. With the expiration of
Makalintals term of office, a vacancy resulted which, by the terms of Section 29, must be filled by the
stockholders of VVCC in a regular or special meeting called for the purpose. His resignation as a
holdover director did not change the nature of the vacancy; the vacancy due to the expiration of
Makalintals term had been created long before his resignation.