TOPIC NON-STOCK CORPORATIONS: DEFINITION;
PURPOSE
BASES CONVERSION AND DEVELOPMENT
AUTHORITY (BCDA) VS CIR (GR NO. 205925, 20
JUNE 2018)
FACTS
On October 8, 2010, BCDA filed a petition for review with
the CTA in order to preserve its right to pursue its claim
for refund of the Creditable Withholding Tax (CWT) in the
amount of Php122,079,442.53, which was paid under
protest from March 19, 2008 to October 8, 2008.
The CWT which BCDA paid under protest was in connection
with its sale of the BCDA-allocated units as its share in the
Serendra Project pursuant to the Joint Development
Agreement with Ayala Land, Inc.
The petition for review was filed with a Request for
Exemption from the Payment of Filing Fees
in the amount of Php1,209,457.90. Then the CTA First
Division denied BCDA's Request for Exemption and ordered
it to pay the filing fees within five days from notice.
BCDA moved for reconsideration which was denied by the
CTA First Division on February 8, 2011. BCDA was once
again ordered to pay the filing fees within five days from
notice, otherwise, the petition for review will be dismissed.
BCDA filed a petition for review with the CTA En Banc on
February 25, 2011, which petition was returned and not
deemed filed without the payment of the correct legal fees.
BCDA once again emphasized its position that it is exempt
from the payment of such fees. It must be emphasized that
payment in full of docket fees within the prescribed period is
mandatory.
It is an essential requirement without which the decision
appealed from would become final and executory as if no
appeal had been filed. To repeat, in both original and appellate
cases, the court acquires jurisdiction over the case only upon
the payment of the prescribed docket fees.
In this case, due to BCDA's non-payment of the prescribed
legal fees within the prescribed period, this Court has not
acquired jurisdiction over the case. Consequently, it is as if
no appeal was ever filed with this Court.
ISSUES
Whether BCDA is a government instrumentality vested with
corporate powers, and as such, exempted from the payment of
docket fees
HELD
The BCDA is a government instrumentality and therefore
exempt from payment of docket fees.
Yes, The resolution of this case hinges on whether the BCDA
is a government instrumentality and consequently exempt
from payment of docket fees under Section 22, Rule 131 of
the Rules of Court, as amended:
Section. 22. Government exempt. The Republic of the
Philippines, its agencies and instrumentalities are exempt from
paying the legal fees provided in the rule. Local governments
and government-owned or controlled corporations with or
without independent charters are not exempt from paying such
fees. (Emphasis supplied)
BCDA is a government instrumentality vested with corporate
powers. As such, it is exempt from the payment of docket fees
required under Section 21, Rule 141 of the Rules of Court, to
wit:
SEC. 21. Government exempt. — The Republic of the
Philippines, its agencies and instrumentalities, are exempt
from paying the legal fees provided in this rule. Local
governments and government-owned or controlled
corporations with or without independent charters are not
exempt from paying such fees. (Emphasis Ours)
Being a government instrumentality, the BCDA is exempt
from payment of legal fees including docket fees pursuant to
Section 22, Rule 141 of the Rules of Court, as amended. Thus,
it was erroneous for the CTA En Banc to affirm the CTA
Second Division's dismissal of the BCDA's Petition for
Review. That the BCDA belatedly filed the docket fees did not
strip the CTA Second Division of jurisdiction as it was exempt
from payment in the first place.
TOPIC NON-STOCK CORPORATIONS:
MEMBERSHIP AND VOTING RIGHTS
CHINESE YMCA VS. CHING (71 SCRA 463)
FACTS
The Chinese YMCA claims that there were 249 membership
applications filed during the annual membership campaign
period. Of the 249 membership applications, 174 were
approved by the Board of Directors. 75 applications, which
1
were among those submitted by respondent Ching, were not
approved for the reason that Ching had given "stop-payment"
orders on the checks submitted by him and some others to
cover payment of the fees corresponding to these 75
applications.
The trial court annulled the membership campaign of
petitioner Chinese YMCA, including the "approval of 174
applications to constitute the present active membership of the
association." Consequently, it annulled all the 174
memberships as approved by petitioner association's board of
directors after they had been processed and favorably
endorsed by the petitioner's screening committee
ISSUES
Whether the court can strip a member of his membership in a
non-stock corporation.
HELD
NO. What is worse, 175 membership applications were
undisputedly filed within the deadline (including the 75
withdrawn by respondent) and yet the 100 remaining
unquestioned memberships were nullified by the questioned
decision without the individuals concerned ever having been
impleaded or heard (except the individual petitioners president
and secretary). The appealed decision thus contravened the
established principle that the courts cannot strip a member of a
non-stock non-profit corporation of his membership therein
without cause. Otherwise, that would be an unwarranted and
undue interference with the well-established right of a
corporation to determine its membership.
TOPIC NON-STOCK CORPORATIONS:
MEMBERSHIP AND VOTING RIGHTS
CEBU COUNTRY CLUB VS. ELIZAGAQUE (542 SCRA
65)
FACTS
Cebu Country Club, Inc. (CCCI), petitioner, is a domestic
corporation operating as a non-profit and non-stock private
membership club, having its principal place of business in
Banilad, Cebu City. Petitioners herein are members of its
Board of Directors. In 1996, respondent filed with CCCI an
application for proprietary membership. The application was
indorsed by CCCI’s two (2) proprietary members, namely:
Edmundo T. Misa and Silvano Ludo. As the price of a
proprietary share was around the P5 million range, Benito
Unchuan, then president of CCCI, offered to sell respondent a
share for only P3.5 million. Respondent, however, purchased
the share of a certain Dr. Butalid for only P3 million.
Consequently, on September 6, 1996, CCCI issued Proprietary
Ownership Certificate No. 1446 to respondent.
During the meetings dated April 4, 1997 and May 30, 1997 of
the CCCI Board of Directors, action on respondent’s
application for proprietary membership was deferred. In
another Board meeting held on July 30, 1997, respondent’s
application was voted upon. As shown by the records, the
Board adopted a secret balloting known as the “black ball
system” of voting wherein each member will drop a ball in the
ballot box. A white ball represents conformity to the
admission of an applicant, while a black ball means
disapproval. Pursuant to Section 3(c), as amended, cited
above, a unanimous vote of the directors is required. When
respondent’s application for proprietary membership was
voted upon during the Board meeting on July 30, 1997, the
ballot box contained one (1) black ball. Thus, for lack of
unanimity, his application was disapproved.
On August 6, 1997, Edmundo T. Misa, on behalf of
respondent, wrote CCCI a letter of reconsideration. As CCCI
did not answer, respondent, on October 7, 1997, wrote another
letter of reconsideration. Still, CCCI kept silent. On November
5, 1997, respondent again sent CCCI a letter inquiring whether
any member of the Board objected to his application. Again,
CCCI did not reply. Consequently, on December 23, 1998,
respondent filed with the Regional Trial Court (RTC), Branch
71, Pasig City a complaint for damages against petitioners
ISSUES
Whether in disapproving respondent's application for
proprietary membership with CCCI, petitioners are liable to
respondent for damages, and if so, whether their liability is
joint and several.
HELD
Obviously, the CCCI Board of Directors, under its Articles of
Incorporation, has the right to approve or disapprove an
application for proprietary membership. But such right should
not be exercised arbitrarily. Articles 19 and 21 of the Civil
Code on the Chapter on HumanRelations provide restrictions,
thus:
Article 19. Every person must, in the exercise of his rights and
in the performance of... his duties, act with justice, give
everyone his due, and observe honesty and good faith.
Article 21. Any person who willfully causes loss or injury to
another in a manner that... is contrary to morals, good customs
or public policy shall compensate the latter for... the damage.
It bears stressing that the amendment to Section 3(c) of
CCCI's Amended By-Laws requiring the unanimous vote of
the directors present at a special or regular meeting was not
printedon the application form respondent filled and submitted
to CCCI. What was printed thereon... was the original
provision of Section 3(c) which was silent on the required
2
number of votes needed for admission of an applicant as a
proprietary member.
As to petitioners' reliance on the principle of damnum absque
injuria or damage without injury, suffice it to state that the
same is misplaced. In Amonoy v. Gutierrez,[7] we held that
this principle does not apply when there is an abuse of... a
person's right, as in this case.
Under Article 2219 of the New Civil Code, moral damages
may be recovered, among others, in acts and actions referred
to in Article 21. We believe respondent' testimony that he
suffered... mental anguish, social humiliation and wounded
feelings as a result of the arbitrary denial of his application.
However, the amount of P2,000,000.00 is excessive. While
there is no hard-and-fast rule in determining what would be a
fair and reasonable amount of moral damages, the... same
should not be palpably and scandalously excessive. Moral
damages are not intended to impose a penalty to the
wrongdoer, neither to enrich the claimant at the expense of the
defendant.[8] Taking into consideration the attending
circumstances here, we... hold that an award to respondent of
P50,000.00, instead of P2,000,000.00, as moral damages is
reasonable.
TOPIC NON-STOCK CORPORATIONS:
MEMBERSHIP AND VOTING RIGHTS
LIONS CLUB INT'L VS. CA (121 SCRA 621)
FACTS
Vicente Josefa and James L. So entered into an agreement
whereby So would withdraw his candidacy for the post of
Governor of\ District 301-A of herein petitioner Lions Club
International. Such withdrawal was accepted by Governor
Huang, however news items were published conveying the
idea that So had not withdrawn from the
gubernatorial race. Josefa filed a complaint before the CFI for
quo warranto, injunction or at least a temporary restraining
order alleging irregularities in the election; that although at the
old site of the election, Josefa won, the
Lions Club Internation unlawfully recognized So as the
winner.
The trial court issued the TRO which was later on lifted and
on appeal, the CA issued a new TRO
ISSUES
Whether the dispute between petitioners and Josefa is a
justiciable issue cognizable by the courts.
HELD
NO. We adopt the general rule that "... the courts will not
interfere with the internal affairs of an unincorporated
association so as to settle disputes between the members, or
questions of policy, discipline, or internal government, so long
as the government of the society is fairly and honestly
administered in conformity with its laws and the law of the
land, and no property or civil rights are invaded. Under such
circumstances, the decision of the governing body or
established private tribunal of the association is binding and
conclusive and not subject to review or collateral attack in the
courts.
The general rule of non-interference in the internal affairs of
associations is, however, subject to exceptions, but the power
of review is extremely limited. Accordingly, the courts have
and will exercise power to interfere in the internal affairs of an
association where (1) law and justice so require, and (2) the
proceedings of the association are subject to judicial review
where there is fraud, oppression, or bad faith, or (3) where the
action complained of is capricious, arbitrary, or unjustly
discriminatory.
Also, the courts will usually entertain jurisdiction to grant
relief (4) in case property or civil rights are invaded, although
it has also been held that the involvement of property rights
does not necessarily authorize judicial
intervention, in the absence of arbitrariness, fraud or collusion.
Moreover, the courts will intervene (5) where the proceedings
in question are violative of the laws of the society, or the law
of the land, as by depriving a person of due process of law.
Similarly, judicial intervention is warranted (6) where there is
a lack of jurisdiction on the
part of the tribunal conducting the proceedings, where the
organization exceeds its powers, or where the proceedings are
otherwise illegal.