Mr. Mariano U. Godinez

October 23, 1980 Mr. Mariano U. Godinez 340 Nueva St. Manila Sir : This refers to your letter dated 5 August 1980 regarding the entrance fee and annual dues of members of the Rotary Club of Raha Sulayman Foundation which is a non-stock and non-profit corporation. It states that the present members of the abovenamed Foundation paid the entrance fee of P2,000.00 and annual membership dues of P100.00 as required under Section 9 of the by-laws of said corporation. In case subsequent to the entrance of these members, the Foundation by two-thirds vote amend the by-laws and reduce the entrance fee to P1,000.00, you pose the following queries: 1. May those members who have already paid the P2,000.00 entrance fee seek a refund of P1,000.00 from the foundation? 2. May the members of the Foundation by two-thirds vote allow the refund of P1,000.00 to those members who have previously paid the P2,000 entrance fee? Both are answered in the negative. The refund will not be proper since payment of the P2,000 entrance fee was made at the time the by-laws required said obligation and it will be prejudicial to the interest of the Foundation, as well as against public policy to allow the refund of previous payments. The amended Section 9 of the by-laws shall be effective only upon the issuance by the Securities and Exchange Commission of a certification that the same are not inconsistent with the Corporation Code of the Philippines. "It is the general rule of substantially universal acceptance that a by-law will be given prospective and not retrospective construction and effect, unless the intent that it shall operate retroactively clearly and strongly appears, and the same rule applies to resolutions which may have the effect of by-laws; and it is not limited to by-laws originally adopted, but applies equally in the case of amendments. (50 Fletcher 4195 citing Hayes v. German Ben Union, 35 Pa Super 142, 149; Eureka Reserve Life Ins. Co. v. Glazner, 115 Okla 180, 242 P 181)" Obviously payments of P2,000 made prior to the effectivity of the amendment cannot be reduced and P1,000 thereof refunded to the members. Very truly yours, For the Chairman: (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department