CEBU COUNTRY CLUB, INC.

(CCCI) VS ELIZAGAQUE GR 160273 1/182008

TORTS/II-INTENTIONAL TORTS/U!AN RELATIONS/CATC ALL "ROVISIONS/ABUSE O#
RIGTS $ ART. 1%
#ACTS CCCI is a domestic corporation operating as a non-profit and non-stock private
membership club. (In 1987 !an "iguel Corp. a special compan# proprietar# member designated
$ (for short% its senir vice president and operations manager for &isa#as and "indanao as a
special non-proprietar# member.% In 199' $ filed (ith CCCI an application for proprietar#
membership endorsed b# ) members of CCCI. !ince it (as re*uired for a member to have a
proprietar# share the price of (hich (as + ," the president of CCCI offered respondent a share
of onl# + -.,". $ ho(ever purchased the share of a certain .r. /utalid for + -". 0o(ever his
application (as deferred. !ubse*uentl# his application (as disapproved. 1hree letters for
reconsideration (ere sent to the /o. ho(ever no repl# (as sent b# the latter. 0ence $ filed
(ith the 21C a complaint for damages. 21C ruled in favor of $. C3 affirmed the 21C ruling.
0ence this petition. (It should be mentioned that the /#-4a(s of the Corporation provided that his
eligibilit# as member re*uired a unanimous vote from the /oard of .irectors. 1his provision
ho(ever (as not included in the application form. It (as further revealed that among the
members of the /o. onl# one voted his disapproval of the application. 1his ho(ever (as not
made kno(n to $.%
ISSUE - !hould CCCI be held liable for damages despite the fact that it has the right to choose its
members5
EL& - 6bviousl# the CCCI /oard of .irectors under its 3rticles of Incorporation has the right
to approve or disapprove an application for proprietar# membership. /ut such right should not be
e7ercised arbitraril#. 3rticles 19 and )1 of the Civil Code on the Chapter on 0uman 2elations
provide restrictions thus8
3rticle 19. $ver# person must in the e7ercise of his rights and in the performance of his
duties act (ith 9ustice give ever#one his due and observe honest# and good faith.
3rticle )1. 3n# person (ho (illfull# causes loss or in9ur# to another in a manner that is
contrar# to morals good customs or public polic# shall compensate the latter for the
damage.
In GF Equity, Inc. v. Valenzona
,
(e e7pounded 3rticle 19 and correlated it (ith 3rticle )1 thus8
1his article kno(n to contain (hat is commonl# referred to as the principle of abuse of
rights sets certain standards (hich must be observed not onl# in the e7ercise of one:s
rights but also in the performance of one:s duties. 1hese standards are the follo(ing8 to
act (ith 9ustice; to give ever#one his due; and to observe honest# and good faith. 1he
la( therefore recogni<es a primordial limitation on all rights; that in their e7ercise the
norms of human conduct set forth in 3rticle 19 must be observed. A '()*+, +*,-)* ./
(+0123 21)42 .154-01 '15,)6(718 ,' )'46+18 ./ 249 40 0-5*, :4/ 61;1'+*12100
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8,10 6,+ 5,63,': 9(+* +*1 6,':0 160*'(618 (6 A'+(521 1% 468 '10-2+0 (6 84:4)1 +,
46,+*1', 4 21)42 9',6) (0 +*1'1./ 5,::(++18 3,' 9*(5* +*1 9',6)8,1' :-0+ .1 *128
'10>,60(.21 . /ut (hile 3rticle 19 la#s do(n a rule of conduct for the government of
human relations and for the maintenance of social order it does not provide a remed# for
its violation. =enerall# an action for damages under either 3rticle )> or 3rticle )1 (ould
be proper. ($mphasis in the original%
In re9ecting respondent?s application for proprietar# membership (e find that petitioners violated
the rules governing human relations the basic principles to be observed for the rightful
relationship bet(een human beings and for the stabilit# of social order. 1he trial court and the
Court of 3ppeals aptl# held that petitioners committed fraud and evident bad faith in disapproving
respondent?s applications. 1his is contrar# to morals good custom or public polic#. 0ence
petitioners are liable for damages pursuant to 3rticle 19 in relation to 3rticle )1 of the same Code.
It bears stressing that the amendment to !ection -(c% of CCCI?s 3mended /#-4a(s re*uiring the
unanimous vote of the directors present at a special or regular meeting (as not printed on the
application form respondent filled and submitted to CCCI. @hat (as printed thereon (as the
original provision of !ection -(c% (hich (as silent on the re*uired number of votes needed for
admission of an applicant as a proprietar# member.
+etitioners e7plained that the amendment (as not printed on the application form due to
economic reasons. @e find this e7cuse flims# and unconvincing. !uch amendment aside from
being e7tremel# significant (as introduced (a# back in 1978 or almost t(ent# ()>% #ears before
respondent filed his application. @e cannot fathom (h# such a prestigious and e7clusive golf
countr# club like the CCCI (hose members are all affluent did not have enough mone# to
cause the printing of an updated application form.
It is thus clear that respondent (as left groping in the dark (ondering (h# his application (as
disapproved. 0e (as not even informed that a unanimous vote of the /oard members (as
re*uired. @hen he sent a letter for reconsideration and an in*uir# (hether there (as an ob9ection
to his application petitioners apparentl# ignored him. Certainl# respondent did not deserve this
kind of treatment. 0aving been designated b# !an "iguel Corporation as a special non-
proprietar# member of CCCI he should have been treated b# petitioners (ith courtes# and
civilit#. 3t the ver# least the# should have informed him (h# his application (as disapproved.
1he e7ercise of a right though legal b# itself must nonetheless be in accordance (ith the proper
norm. @hen the right is e7ercised arbitraril# un9ustl# or e7cessivel# and results in damage to
another a legal (rong is committed for (hich the (rongdoer must be held responsible.
'
It bears
reiterating that the trial court and the Court of 3ppeals held that petitioners? disapproval of
respondent?s application is characteri<ed b# bad faith.
3s to petitioners? reliance on the principle of damnum absque injuria or damage (ithout in9ur#
suffice it to state that the same is misplaced. In Amonoy v. Gutierrez
7
(e held that this principle
does not appl# (hen +*1'1 (0 46 4.-01 ,3 4 >1'0,6?0 '()*+ as in this case.
Cebu Country Club loses court case (Sunstar CE!"
1he !upreme Court upheld the decision of the Court of 3ppeals ordering the Cebu
Countr# Club Inc. to pa# damages to a businessman (hose membership application (as
re9ected.
1he court said the club acted in bad faith in re9ecting the applicant an officer of !an "iguel Corp.
Chief Austice 2e#nato +uno (ho (rote the decision of the !C first division ho(ever modified
the decision of the appellate court and reduced the amount of damages a(arded to 2icardo
$li<aga*ue.
$li<aga*ue (as then senior vice president and operations manager of !an "iguel Corp. for
&isa#as and "indanao.
In )>>- the C3 decided to a(ard $li<aga*ue +- million in moral and e7emplar# damages and
+,>>>> litigation fees. 1he !C in its decision promulgated on Aan.18 reduced the figure to
+1>>>>>.
$li<aga*ue sued the Countr# Club?s board of directors for damages after the# disapproved his
application for proprietar# membership. 1he case (as filed in the 2egional 1rial Court in +asig
Cit# in .ecember 1998.
$li<aga*ue *uestioned the disapproval of his application because on !ept. ' 199' the CCCI
issued him a proprietar# o(nership certificate after he bought a +--million share from .r. /utalid
a club member.
1he board of directorsB!abino .apat 2uben 3lmendras Aulius Ceri .ouglas 4u#m Cesar 4ibi
2amontito =arcia and Aose !alaBelevated the issue to the C3 after the lo(er court ordered
them to pa# the businessman +9 million in damages.
6n appeal the !C said the club violated rules governing human relations and had to pa#
damages.
1he !upreme Court noted that the Countr# Club did not inform $li<aga*ue about its amendment
to section -c of the club?s b#-la(s (hich re*uired a unanimous vote of the directors present
during a special or regular meeting to *ualif# for membership.
@hat (as printed on $li<aga*ue?s application (as the original provision of section -c (hich (as
silent on the re*uired number of votes needed for admission of an applicant.
1he club directors said the amendment (as not printed on the form due to financial reasons but
the !C found the e7planation Dflims# and unconvincing.E Reporter Nilda Gallo