Quezon City (Sports) Club, Inc.

March 10, 1987 Quezon City (Sports) Club, Inc. E. Rodriguez Sr. Blvd., corner Doa Juana Rodriguez Avenue Quezon City, Metro Manila Gentlemen: This relates to your letter, dated February 28, 1987, requesting confirmation of this Commission on the assumption taken therein. It appears that Quezon City (Sports) Club, Inc., a non-stock, non-profit organization, will hold its annual members-stockholders' meeting for the election of directors for the year 1987-88 on April 25, 1987. The pertinent provisions of your by-laws are quoted as follows: "SECTION 16. Election of Directors . The members of the Board of Directors shall be elected by secret ballot. Each registered owner of a share of stock, whether a natural or juridical person, shall have the right to vote in person or by proxy the number of shares standing in its name . . . ." "SECTION 33. (a) Billing of Members, Posting of Suspended Accounts. As soon as possible after the end of every month, a statement showing the account or bill of a member for said month will be prepared and sent to them. If the bill of any regular member remains unpaid by the 20th of the month following that in which the bill was incurred, the Treasurer shall notify him that if his bill is not paid in full by the end of the same month, his name will be posted as suspended the following day at the clubhouse Bulletin Board. While posted, a regular member together with the immediate members of his family may not use the facilities or avail of the privileges of the club." (Emphasis supplied) Your articles of incorporation and amended by-laws fail to show any authority on the part of the club to deny any member on suspended accounts from exercising his right to vote, hence, your assumption that members on suspended account may vote in the election of directors. Anent thereto, please be informed that a member of a non-stock corporation may forfeit his right to remain a member, and be expelled or disfranchised, if he is guilty of conduct authorizing expulsion. In such case, however, he must as a rule, be expelled. A member of a corporation does not lose his membership, ipso facto, because of an act or default which is made a cause of forfeiture or expulsion , unless it is expressly so provided, but there must be a proper action by the corporation expelling him. (12 Fletcher Cyc. Corp., 1984 Rev. Vol., sec. 5695) As aptly decided in a prevailing American case: "A by-law providing that, if a member fails to pay dues for a year, he shall be deemed to have relinquished his membership, and may be excluded from the rooms of the association, and his certificate of membership; shall be sold at auction, and any surplus of the proceeds be paid over to him does not ipso facto, terminate the membership of one whose dues are year in arrears, nor is the remedy given for non-payment of dues exclusive because the corporation, so long as he remains a member, may sue on his agreement and collect them." (Denver Chamber of Commerce & Board of Trade v. Green, 8 Colo. App. 420, 47 p. 140, cited in 12 Fletcher Cyc. Corp., 1984 Rev. Vol., sec. 5695) llcd The Commission had the occasion to rule in a previous opinion that members who have not been automatically dropped from the membership roster may so vote at the meetings of members . ( Letter to Philippine Institute of Certified Public Accountants, dated September 28, 1984 ). By-laws providing for disfranchisement of members are penal in character and must be strictly construed. Considering the foregoing, the Commission confirms your assumption that members on suspended accounts, and whose certificates of stock have not yet been sold by the club in pursuance of the provision of the by-laws are competent to vote at the election of directors. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman