Mr. Antonio M. de Ynchausti, et al.

April 7, 1982 Mr. Antonio M. de Ynchausti, et al. Army and Navy Club of Manila, Inc. P.O. Box 460 Manila Dear Sirs: This is in connection with your letter-request dated August 8, 1981, relative to the Army and Navy Club, Inc. llcd It appears from your letter that there are three(3) types of membership in said club; regular, associate and honorary; that the first type has voting rights, while the second and third has none; that all of you are associate members; that you believe that the management unfortunately allows the club to deteriorate; and that you are therefore requesting this Commission to intervene and grant you voting powers. The SEC took time to answer your letter because it is a question of first impression. Its novelty arises from the fact that various presidential decrees granted the SEC greater powers, and you want it to wield its powers in your favor. However, after an in-depth study and continuous consultations by its officials with prominent corporate lawyers, we are sorry to inform you that we have to rule out any intervention in the affairs of your club. The simple reason is that under aforesaid prevailing circumstances, presently no law grants the SEC such power and therefore it has no legal basis to intervene in this case. Please note that all of you entered said club as associate members, knowing fully well in advance the limitation that you have absolutely no voice in its management. In short, you are presumed to have opted to become associate members. We are therefore constrained to abide by the law and follow the jurisprudence laid down by our Supreme Court in the celebrated case of "Vales vs. Villa" (GR No. 10028, Dec. 11, 1916, 35 Phil 769, 787-788) in connection with a similar situation, that unless there is a violation of law or actionable wrong, the courts should not interfere with the contracts of the parties. prcd Nevertheless, we are not saying that you will have to suffer in silence perpetually. Please be informed that per chance you may bring your plight or grievance to the Batasang Pambansa and seek succor therefrom, in the same manner that said body stuck down the lifetime privileges and pegged to only five (5) years the prerogatives of the owners of founder's shares to monopolize the management of the Corporation Code. However, we do not guarantee that said sections of the code and any similar legislation will easily pass the constitutional test of non-abridgment of contracts, although there is a good chance that such exercise of police power to pass remedial statutes is valid and lawful. We hope that we may have helped you in solving your predicament in some way or other, although we certainly cannot grant your request. Very truly yours, (SGD.) JULIO A. SULIT, JR. Associate Commissioner