Mr. Patrick T. Lugue

April 28, 1997 Mr. Patrick T. Lugue Calatagan Golf Club, Inc. 5/F Enzo Building, 399 Sen. Gil Puyat Ave., 1200 Makati, Metro Manila S i r : This refers to your letter dated March 13, 1997 requesting opinion on the following queries: 1. Can the Calatagan Golf Club, Inc., a non-profit stock corporation, within the context of Article 16 of the Corporation Code, obtain approval of amendment to articles of incorporation on the qualification of ownership of shares by sending all of its members through registered mail a notice of the proposed amendment together with a form which should be sent back by those who object to the proposed amendment, with the statement that unless the Club receives within a specified period the requisite number of the written objection form, the proposed amendment shall be considered approved by the members? In effect, the proposal will be considered carried unless a sufficient number of members manifest their objection. 2. Is the appraisal right available to the stockholders of this non-profit organization? Relative to query no. 1 the Corporation Code provides: "SECTION 16. Amendment of articles of incorporation . Unless otherwise prescribed by this Code or by special law, and for legitimate purposes, any provision or matter stated in the articles of incorporation may be amended by a majority vote of the board of directors or trustees and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, without prejudice to the appraisal right or dissenting stockholders in accordance with the provisions of this Code ,or the vote written assent of two-thirds (2/3) of the members if it be a non-stock corporation. xxx xxx xxx." While the above provision allows voting by " written assent",silence or failure to object on the proposal should not be treated as approval thereof, as the law explicitly requires the stockholder's "assent" to be in writing . Anent the second query, the above cited provision expressly authorizes the exercise of appraisal right in accordance with Section 81 of the same Code, quoted in part hereunder: "SECTION 81. Instances of appraisal right . Any stockholder of a corporation shall have the right to dissent and demand payment of the fair value of his shares in the following instances: 1. In case, any amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholders or class of shares ,or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence; ...." (Emphasis supplied) While the Club is a " non-profit " corporation, it has the character of a " stock corporation ".Unlike an ordinary non-profit, non-stock corporation, the member stockholders thereof have individual pecuniary interest in the Club represented in terms of " proprietary shares ",ownership of which is EVIDENCED BY certificates of proprietary share or membership ,and the corresponding market value of which can easily be determined or fixed. This kind of corporation is called " proprietary membership corporation ".While it has the color of a " non-stock corporation " being non-profit, it has the character more of a " stock corporation ".In the light of the foregoing, your second query may be answered in the affirmative. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner