Cebu Country Club Inc., v. Elizagaque (Case Digest)

Cebu Country Club Inc., v. Elizagaque 
G.R. No. 160273
January 18, 2008

CEBU COUNTRY CLUB, INC., SABINO R. DAPAT, RUBEN D. ALMENDRAS, JULIUS Z. NERI, DOUGLAS L.LUYM, CESAR T. LIBI, RAMONTITO* E. GARCIA and JOSE B. SALA, petitioners,
vs.
RICARDO F. ELIZAGAQUE, respondent

Facts:
Cebu Country Club is a domestic corporation operating as a non-profit and non-stock private membership club. Sometime in 1987, San Miguel Corporation, a special company proprietary of CCCI, designated Ricardo Elizagaque, its senior vice-president and operations manager for the Visayas and Mindanao, as a special non-proprietary member. In 1996, Elizagaque filed an application for proprietary membership. He purchased a share for Php3 million. Unknown to Elizagaque, however, was that the club had amended their by-laws in which a unanimous vote of the directors is required before an applicant may be admitted. This amendment was not reflected in the application form Elizagaque filled up. The Board adopted a black ball system in which the directors would drop a white ball when they approve of the applicant and a black one if they do not. During the voting, there was one black ball, which means the unanimous decision was not satisfied.

On August 1, 1997, Elizagaque received a letter from CCCI’s corporate secretary, informing him that the board disapproved his application for proprietary membership. Elizagaque, through Edmundo Misa, wrote a letter of reconsideration, but no reply came. They wrote two more times, but CCCI still did not reply. On December 1998, Elizagaque filed a complaint for damages against CCCI.

Issue:
Is Elizagaque entitled to payment of damages?

Ruling:
Yes. The Court cited Articles 19 and 21 of the Civil Code in its decision.

Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.
A right, though by itself legal because recognized or granted by law as such, may nevertheless become the source of some illegality. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible.

It was shown that Elizagaque’s letters remained unanswered and he was not even made aware of the club’s new rules. In defense of the failure to print a new application form with the amendments added, CCCI said that it was not able to print the updated form because of economic reasons. Being an exclusive golf club, it is unbelievable that the club would not be able to pay for printing costs of the updated application forms.

The Court found that CCCI violated the rules governing human relations and is thus liable for damages pursuant to Article 19 in relation to Article 21 of the Civil Code.