G.R. No.L-36929




Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-36929 June 18, 1976 CHINESE YOUNG MEN'S CHRISTIAN ASSOCIATION OF THE PHILIPPINE ISLANDS, WILLIAM GOLANGCO, in his capacity as Director and President of the said Association, and JUANITO K. TAN, in his capacity as Recording Secretary of the said Association, petitioners, vs. VICTOR CHING and THE COURT OF APPEALS, respondents. Tanada, Sanchez, Tanada & Tanada for petitioners. Poblador, Nazareno, Azada, Tomacruz & Parades for privates respondent. ESGUERRA, J: Petition to review on certiorari the decision of the Court of Appeals, dated March 27, 1973, sustaining and affirming in toto the Decision of the Court of First Instance of Manila which annulled the 1966 annual membership campaign of the Chinese Young Men's Christian Association of the Philippine Islands, without prejudice to the holding of another one in lieu thereof; declared as without legal effect the results of the membership campaign including the approval of 174 applications to constitute the active membership of the association; made permanent writ of preliminary injunction enjoining the respondents, now petitioners herein, from holding the annual election of the association, until such time as a new list of members shall have been finalized; and dismissed the counterclaim of petitioners Chinese Young Men's Christian Association of the Philippine Islands, William Golangco and Juanito K. Tan. The factual background of this case is as follows: On January 17, 1966, respondent Victor Ching filed with the Court of First Instance of Manila an action for mandamus with preliminary injunction against the herein petitioners, Chinese Young Men's Christian Association of the Philippine Islands (Chinese YMCA for short), William Golangco, in his capacity as Director and President of the Chinese YMCA, and Juanito K. Tan, in his capacity as Recording Secretary of the Chinese YMCA. Respondent Ching anchored his action in the Court of First Instance of Manila upon the claim that the Membership Campaign of the Chinese YMCA for 1966 held from September 27, 1965, up to November 26, 1965, only 175 applications for membership were submitted, canvassed and accepted on the last day of the membership campaign, which was November 26, 1965 at 5:00 p.m. The letter of the association for membership reads as follows: Dear Fellow Member: Your Board of Directors is pleased to inform you that the Annual Membership Campaign for 1966 will start on September 27, 1965, and end on November 26,1965. For our present active members, the membership may be renewed by the payment of the P100.00 annual membership fee at our office within the above-mentioned period. Failure to do so by a member will forfeit his right to active membership. Application for new members can be filed with the Office of the Association also within said period. The application must be proposed by a present active member. The application form, duly accomplished in duplicate, shall be accompanied by a P100.00 check or cash, which will be refunded should the application be not acted upon favorably. Application forms are available at our office. MANILA DOWNTOWN YMCA (Chinese YMCA of the P.I.) By: JUAN BAUTISTA LEE Chairman MEMBERSHIP COMMITTEE Not more than 240 membership applications, as reported in the November 28, 1965 issue of the Chinese Commercial News, were filed. The herein petitioners, on the other. hand, alleged that 249 membership applications, including the 106 submitted through respondent Ching, were filed during the campaign period. Further, the petitioners denied that there was any counting and/or approval of membership applications that took place on November 26, 1965, as under the Constitution and By-Laws of the Chinese YMCA membership applications had to be screened by its Membership Committee, endorsed favorably to its Board of Directors and approved by the latter body by two-thirds majority vote. For a better understanding of the matter, the pertinent provisions of the Constitution and By-Laws of the Association. are hereto quoted as follows: ARTICLE II — MEMBERSHIP Sec. 1. Any young man of good moral character may become a member upon payment of the annual fee. Sec. 2. — Male members in good standing in the Roman Catholic Church or in any other Christian Church who are eighteen years of age or over may become active members of this association by declaring in accordance with the Paris Basis of membership adopted by the world's Convention of Young Men's Christian Association, that regarding Jesus Christ as their God and Saviour according to the Holy Scriptures, they desire to be his Disciples in their doctrine and in their life and to associate their efforts for the extension of his Kingdom among young men. Only active members shall have the right to vote and hold office. xxx xxx xxx Sec. 4. — Any member of this association may propose an applicant for membership, such proposition to be made in writing to the Membership Committee. Any applicant reported favorably may be elected at a subsequent meeting of the Board of Directors, by a two-thirds vote of the membership present. Sec. 5. — The annual fees may be determined by the Board of Directors at any regular meeting, sixty days notice having been given of any contemplated change. The fees are payable at the office of the association. xxx xxx xxx ARTICLE VIII — STANDING COMMITTEE Sec. 8. — The Membership Committee shall devise means for maintaining the building up of the membership of the association. This committee shall also receive all propositions for membership coming to it as provided in Section 4, Article II, and, after such inquiry as may be necessary concerning the character of each person proposed, shall report in writing at a monthly meeting of the Board those recommended for election. It is claimed by the petitioners that of the 249 applications submitted, 174 were favorably endorsed by the Membership Committee to the Board of Directors and subsequently approved by the latter. Seventy-five applications, which were among those submitted by respondent Ching were not approved for the reason that said respondent had given "stop-payment" orders on the checks submitted by him and some others to cover payment of the fees corresponding to these 75 applications. Accordingly, petitioners contend that the 1966 membership of the Chinese YMCA should be constituted as they are constituted, only by those 174 applicants whose applications were approved by the Chinese YMCA Board of Directors. It is to be noted that respondent Victor Ching is a member of the Board of Directors of the Chinese YMCA, while herein petitioners, William Golangco and Juanito K. Tan, are its president and recording secretary, respectively; that in the campaign for membership for the year 1966, a rivalry had developed between two groups in the association, one headed by respondent Ching and the other by petitioner Golangco; that on the last day of the membership campaign, November 26, 1965, respondent Ching and herein petitioner Golangco were in the office of the Chinese YMCA located at Room 336, Republic Supermarket Building, Florentino Torres, Manila; that respondent Ching, after it was agreed upon that there was going to be no extension of the membership campaign and that no application would be received after 5 o'clock that afternoon of November 26, 1965, caused to be counted the number of applications actually in the possession of the General Secretary of the association, at the close of office hours, 5:00 o'clock p.m. or thereabout, and the number of applications thus submitted was 175; and that two (2) days thereafter, it was reported in the November 28, 1965, issue of the Chinese Commercial News that some 240 applications for membership were received by the Chinese YMCA during the last day of its membership campaign, November 26,1965,5:00 o'clock p.m. After trial, the Court of First Instance of Manila rendered its decision on the case, the dispositive Portion of which is as follows WHEREFORE, judgment is hereby rendered annulling the 1966 annual membership campaign of the respondent Chinese YMCA of the Philippine Islands, without prejudice to the holding of another one in lieu thereof; declaring as without legal effect the results of the same, including the approval of 174 applications to constitute the present active membership of the association; making permanent the preliminary injunction issued in this case enjoining the respondents from holding the annual election of the respondent association, until such time that a new list of members shall have been finalized; and dismissing the counterclaim of the respondents. The Court makes no pronouncement as to costs. The aforementioned Decision of the Court of First Instance of Manila, dated September 19, 1967, was appealed to the Court of Appeals by the herein petitioners, Chinese YMCA, William Golangco and Juanito K. Tan. On March 27, 1973, respondent Court of Appeals rendered its decision affirming the decision of the Court of First Instance of Manila, pertinent portions of which decision is quoted as follows: We find no reason to disregard the findings of facts of the Trial Judge not only because of his advantage in observing the demeanors of the witnesses when they testified before him and of gauging their credibility better than an appellate court and in cases of this nature the said findings are entitled to respect, unless he failed to consider a fact or circumstance of such importance as to warrant a modification or reversal of said findings, which is not the case here—but also because said findings are in accord with the facts and the rules of probabilities. As for the 75 applications submitted by petitioner Victor Ching, they were correctly rejected by the court a quo because his personal checks covering the membership fees for the said applications were dishonored by the bank when he gave the stop-payment order. Each application should be accompanied with a P100.00 check or cash to make it valid. He did not appeal from the decision; consequently, the said finding of fact is not now open to re-examination. It is, however, evident that he gave the stop- payment order pending the resolution of his request for clarification of the newspaper item regarding the more than 240 applications supposedly received during the campaign. By and large, the appealed decision is in accord with the law and facts. IN VIEW OF THE FOREGOING, the decision is hereby affirmed with costs against the respondents-appellants. AFFIRMED. Hence, this petition for review wherein petitioners have assigned the following errors: I. RESPONDENT COURT OF APPEALS ERRED IN ANNULLING THE 1966 ANNUAL MEMBERSHIP CAMPAIGN OF YMCA AND IN DECLARING INVALID THE APPROVAL BY YMCA OF 174 APPLICATIONS FOR MEMBERSHIP. II. RESPONDENT COURT OF APPEALS LIKEWISE ERRED IN INVALIDATING THE MEMBERSHIP OF SOME 70 MEMBERS, GRANTING ARGUENDO THAT THEIR APPLICATIONS WERE NOT FILED IN THE OFFICE OF YMCA, BECAUSE SAID APPLICATIONS WERE ADMITTEDLY PROCESSED BY YMCA'S SCREENING COMMITTEE AND FAVORABLY ENDORSED BY THE LATTER TO YMCA'S BOARD OF DIRECTORS WHICH IN TURN APPROVED THEM IN CONFORMITY WITH THE CONSTITUTION AND BY-LAWS OF YMCA. III. RESPONDENT COURT OF APPEALS ERRED IN DECLARING INVALID THE MEMBERSHIPS OF 174 MEMBERS IN YMCA ON THE STRENGTH MERELY OF SPECULATION, INFERENCE OR ASSUMPTION, SUPPORTED NEITHER BY FACT NOR BY THE LAW THAT THERE WAS A POSSIBILITY THAT SOME OF THE APPLICATIONS SUPPORTING SAID MEMBERSHIPS COULD HAVE BEEN FILED AFTER THE DEADLINE IMPOSED IN THE MEMBERSHIP CAMPAIGN, THEREBY MAKING THE ADVISORY AND SUPERVISORY POWER OF THIS HONORABLE COURT APPLICABLE TO THE CASE AT BAR. For the resolution of these issues, We must begin with the rule aptly restated by former Chief Justice Querube C. Makalintal in Ramos vs. Court of Appeals, 63 SCRA 331, that ... The general rule is that the appellate court's findings are conclusive, but this rule is not without some recognized exceptions, such as: (1) when the conclusion is a finding grounded entirely on speculation, surmises or conjectures (Joaquin vs. Navarro, 93 Phil. 257); (2) when the inference made is manifestly mistaken, absurd or impossible (Luna vs. Lina, 74 Phil. 15); (3) where there is grave abuse of discretion (Buyco vs. People, 51 O.G. 2929); (4) when the judgment is based on a misapprehension of facts (Cruz vs. Sosing, 94 Phil. 26); and (5) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same are contrary to the admission of both appellant and appellee (Evangelists vs. Alto, 103 Phil. 401). See also Garcia vs. Court of Appeals, et al., 33 SCRA 622; Roque vs. Buan, 21 SCRA 642. The trial court annulled the 1966 membership campaign of petitioner Chinese (Downtown) YMCA and the "approval of 174 applications to constitute the present active membership of the association" and issued a permanent injunction against the holding of the annual election by such active membership on the basis of its findings that Juan Bautista Lee as chairman of the membership committee had stated on the November 26, 1965 deadline that only 175 applications were received in the association's office while the newspaper reported two days later on November 28, 1965 a total of 240 applications filed and received. Consequently, it annulled all the 174 memberships as approved by petitioner association's board of directors after they had been processed and favorably endorsed by the petitioner's screening committee (174 applications remained from the 249 after respondent withdrew the 75 applications submitted by him by giving a stop-payment order on his personal check covering the payment of the membership fees) because of its conjecture (which was affirmed by the appellate court) that "It is not improbable that some of those applications were filed after said deadline or after said hour on November 26, 1965, or even on subsequent dates", as follows: It is true that, judging by what appears on the face of the 249 application forms submitted, Exhibits 9,9-A to 9-GGGGG, 10, 10- A to 10-KKK, 11, 11-A to 11-WWW, and the receipts for the payment of application fees, Exhibits 3, 3-A to 3-E, the applications were supposedly filed and the fees paid not later than November 26, 1965 the last date of the membership campaign. Nonetheless, some of said applications are undated, and those bearing dates do not show the time when they were received or filed. It is undenied that the deadline had been fixed at 5:00 p.m. on November 26, 1965. It is not improbable that some of those applications were filed after said deadline, or after said hour on November 26, 1965, or even on subsequent dates. As aforesaid, only 175 applications were in the office of the Association as of 5:00 p. m. of November 26, 1965. We find as in the above-cited Ramos case, that the position adopted by both the trial court and the Court of Appeals on the basis of the trial court's conjecture and speculation is not justified. The documentary evidence itself as cited by the trial court, consisting of the applications and the receipts for payment of the membership fees show that they were filed and paid not later than the November 26, 1965 deadline, and this was further supported by the bank statement of the petitioner YMCA deposit account with the China Banking Corporation and the checks paid by certain members to the YMCA which show that the application fees corresponding to the questioned 74 applications (that raised the total to 249 from 175) were already paid to petitioner YMCA as the time of the said deadline. (Exhibits 4, 6, 6-A, 6-B and 6-C). No evidence could be cited by the trial court to rebut this well nigh conclusive documentary evidence other than respondent's unsupported suspicion which the trial court adopted in a negative manner with its statement that it is "not improbable" that "some of those applications filed after said deadline". If there were indeed any applications filed after the deadline, they certainly should have been positively pin-pointed and specifically annulled. What is worse, 175 membership applications were undisputedly filed within the deadline (including the 75 withdrawn by respondent) and yet the 100 remaining unquestioned memberships were nullified by the questioned decision without the individuals concerned ever having been impleaded or heard (except the individual petitioners president and secretary). The appealed decision thus contravened the established principle that the courts cannot strip a member of a non-stock non-profit corporation of his membership therein without cause. Otherwise, that would be an unwarranted and undue interference with the well established right of a corporation to determine its membership, as announced by Fletcher, as follows: Compliance with provisions of charter, constitution or by-laws. —In order that membership may be acquired in a non-stock corporation and valid by-laws must be complied with, except in so far as they may be and are waived. *** But provisions in the by-laws as to formal steps to be taken to acquire membership may be waived by the corporation, or it may be estopped to assert that they have not been taken. [12A Fletcher Cyclopedia Corporations, Perm. ed., pp. 583-585; emphasis supplied.] Finally, the appealed decision did not give due importance to the undisputed fact therein stated that "at the board meeting of the association held on December 7, 1965, a list of 174 applications for membership, old and new, was submitted to the board and approved by the latter, over the objection of the petitioner [therein private respondent] who was present at said meeting." Such action of the petitioner association's board of directors approving the 174 membership applications of old and new members constituting its active membership as duly processed and screened by the authorized committee just be deemed a waiver on its part of any technicality or requirement of form, since otherwise the association would be practically paralyzed and deprived of the substantial revenues from the membership dues of P17,400.00 (at P100.00 per application). WHEREFORE the respondent court's decision is hereby set aside and in lieu thereof judgment is rendered dismissing private respondent's petition in the Court of First Instance of Manila and dissolving the preliminary injunction, with costs against private respondent. Makasiar, Muñoz Palma, Aquino, and Martin, JJ., concur. The Lawphil Project - Arellano Law Foundation