- Petitioner
- Valley Golf & Country Club
- Respondent
- Rosa O. Vda. de Caram
- Citation
- G.R. No. 158805
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Tinga, J.
- Decided
- April 16, 2009
Summary
Valley Golf & Country Club sold the fully-paid golf share of deceased member Fermin Caram for unpaid dues totaling P7,525.45, realizing P25,000.00 at auction. Caram's widow Rosa challenged the sale, arguing it violated Corporation Code requirements. The SEC and Court of Appeals invalidated the sale, ruling that liens on shares must be in Articles of Incorporation under Section 6, not just by-laws. The Supreme Court upheld the nullification on different grounds, applying Section 91 which permits membership termination through by-laws in non-stock corporations. However, the Court found Valley Golf acted in bad faith by sending the final demand letter to Caram despite knowing he was dead, and that the by-laws lacked adequate notice and hearing procedures. Since membership termination involved significant property rights (the golf share), the process must comply with substantial justice and Civil Code provisions on human relations. The Court sustained P60,000.00 in damages, emphasizing that corporate actions affecting property rights require fair procedures and good faith conduct.