Atty. Rodolfo B. Valdes

July 16, 1984 Atty. Rodolfo B. Valdes 4th Flr.,Universalre Bldg. 106 Paseo de Roxas, Makati Metro Manila Sir : This has reference to your letter dated June 11, 1984 inquiring as to the legality of an action taken by the Board of Directors at a meeting held on June 6, 1984 increasing the monthly dues of its members from a uniform rate of P350.00 monthly to as follows: cdlex a) Proprietary Member P500.00 b) Associate Member 600.00 c) Playing Member 750.00 The Wack-Wack Golf and Country Club is a non-stock athletic membership club to foster, promote and conduct legitimate athletic exercises, sports and entertainments of all kinds. It has three (3) principal types of membership, namely: a) Proprietary who pays a membership fee of at least P150,000.00 and has voting rights; b) Associate pays an entrance fee of P60,000.00 and has no right to vote; and c) Playing pays an annual fee of P1,000.00 and likewise has no voting right. Records reveal that the amount of monthly dues paid by each type of member differs in that from the post liberation period up to the middle part of 1982, the proprietary members paid the least amount of monthly dues, with the playing members paying the higher monthly fees. The rationale behind this according to you is the proprietary members have big capital investment in the association which does not yield any earnings for which reason they must be granted certain privileges to sort of compensate for whatever loss they stand to suffer. Records further show that it was only from the year 1982 up to the present that all the three (3) types of members paid a uniform monthly dues of P350.00. You allege that because of the prevailing high cost of living brought about by the recent devaluation of the peso, it becomes imperative to make the necessary adjustments in the monthly dues of the members as the income generated by the present fee of P350.00 a month is grossly inadequate to finance the operations of the club. It was in this context that the board of trustees, during their meeting on June 6, 1984, adjusted the monthly dues of the members as adverted to earlier. This was done pursuant to the provisions of the by-laws stating: "SECTION 18. ...By unanimous vote, the Board may fix dues and fees subject to revision at the next meeting of members." Your query is: Can the Board validly fix a graduated amount of monthly dues? The by-laws of the corporation provide as follows: "SECTION 6. (a) Kinds of members. xxx xxx xxx (b) ....Proprietary member or a laying representative shall pay monthly dues of P350.00 payable in advance. ... (c) ....An associate member shall pay an entrance fee of P60,000.00 and monthly dues of P350.00 payable in advance. ... (d) ....Every playing member shall pay an annual fee of P1,000.00 and monthly dues of P350.00 payable in advance. ...." The rule is that when dues are expressly fixed in the by-laws, the same cannot be changed without amending the by-laws in accordance with Section 48 of the Corporation Code. The law provides, thus: "SECTION 48. Amendments to by-laws . The Board of Directors or trustees by majority vote thereof and the owners of at least a majority of the members of a non-stock corporation at a regular or special meeting duly called for the purpose may amend or repeal any by-laws or adopt new by-laws. The owners of two-thirds (2/3) of the outstanding capital stock or two-thirds (2/3) of the members in a non-stock corporation may delegate to the board of directors or trustees the power to amend or repeal any by-laws or adopt new by-laws. Provided, that any power delegated to the board of directors or trustees to amend or repeal any by-laws or adopt new by-laws shall be considered revoked, whenever stockholders owning or representing a majority of the outstanding capital stock or a majority of the members in non-stock corporations shall so vote at a regular or special meeting. Whenever any amendment or new by-laws are adopted, such amendment or new by-laws shall be attached to the original by-laws in the office of the corporation and a copy thereof, duly certified under oath by the corporate secretary and a majority of the directors or trustees shall be filed with the Securities and Exchange Commission, the same to be attached to the original articles of incorporation and original by-laws. The amended or new by-laws shall only be effective upon the issuance by the Securities and Exchange Commission of a certification that the same is not inconsistent with this Code. However, considering that the Board, under the aforecited Section 18 of the by-laws of the corporation is authorized to fix the dues of members, the same may be changed, subject however, to revision of the members as provided for under said provision. Thus, any change in the dues made by the Board in their capacity alone is subject to revision at the next meeting of members. prcd Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman