G.R. No. 190641 , November 10, 2015
Valley Golf and Country Club, Inc., Petitioner, vs. Dr. Victor Reyes (Deceased), substituted by Edna H. Reyes, Melissa H.R. Gervacio, Norman David H. Reyes, Elizabeth Victoria H. Reyes, Noelle Simone R. Schifferer and Victor Alec H. Reyes, Respondents.

FACTS

Petitioner Valley Golf and Country Club, Inc. is a non-stock, non-profit corporation operating a golf course. In 1960, Dr. Victor Reyes purchased one share, evidenced by Stock Certificate No. 368, granting him exclusive membership and playing rights. From 1979 to 1986, Reyes assigned his playing privileges to others, who assumed the obligation to pay his monthly membership dues. When the last assignment ended in 1986, the payment of dues stopped, and Reyes’s account became delinquent. In 1994, Reyes inquired about transferring his share to his son and discovered that his share had been sold at a public auction on December 10, 1986, due to delinquency. Reyes filed a complaint with the Securities and Exchange Commission (SEC) for reinstatement of playing rights and re-issuance of a new certificate of share, alleging he was not notified of the delinquency or the public sale. The case was later transferred to the Regional Trial Court (RTC) of Makati due to a change in jurisdiction. Valley Golf claimed it sent a Notice of Due Account on June 11, 1986, received by Reyes on June 18, 1986, as shown by Registry Receipt No. 3384, and published a Notice of Auction Sale in the Philippine Daily Express on December 6, 1986. The RTC ruled in favor of Valley Golf, but the Court of Appeals reversed the decision, holding that the registry return receipt was insufficient proof of notice and that Reyes was deprived of the opportunity to settle his obligation.

ISSUE

Whether the Court of Appeals erred in invalidating the auction sale of Reyes’s share on the ground of lack of notice despite evidence of registered mail and publication.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals Decision and Resolution. The Court held that membership in a non-stock corporation is a property right, and its termination must comply with substantial justice and due process. Valley Golf failed to prove that Reyes was duly notified of his delinquency. The registry return card presented was unauthenticated and did not bear the name of the recipient. In civil cases, service by registered mail requires both the registry receipt and an affidavit of the person mailing; absent these, there is no proof of service. The registry receipt alone does not constitute proof of receipt. Since Reyes was not validly notified, the termination of his membership through the public auction sale violated his property rights without due process of law. Therefore, the auction sale was invalid, and Reyes (substituted by his heirs) is entitled to reinstatement of his playing rights or re-issuance of a new share.