G.R. No. L-35146 - Alicia Leuterio vs. Court of Appeals

Forest Hills Golf and Country Club, Inc. was organized as a non-profit stock corporation to promote social, recreational, and athletic activities, governed by its articles of incorporation and by-laws.
In March 1993, Fil-Estate Properties, Inc. (FEPI) undertook marketing of Forest Hills shares under a Project Agreement; in July 1995 FEPI assigned its rights to Fil-Estate Golf and Development, Inc. (FEGDI).

In 1995, FEPI and FEGDI engaged Fil-Estate Marketing Associates, Inc. (FEMAI) to market and sell Forest Hills shares; FEMAI’s president clarified that share purchase alone did not guarantee membership without Board approval and compliance with requirements.
In 1996, Gardpro, Inc. purchased two Class “aCa” common shares, entitling it to designate two nominees for club membership.

In October 1997, Gardpro designated Fernando R. Martin and Rolando N. Reyes as its nominees; Forest Hills charged P50,000 each as membership fees (later raised to P75,000 with a P25,000 discount for early payment). Both nominees paid and were admitted upon Board approval.
When Gardpro later sought to replace its nominees, Forest Hills demanded P75,000 per replacement nominee; Gardpro refused, unable to effect replacement.

On July 7, 1999, Gardpro filed a complaint with the Securities and Exchange Commission (SEC) to challenge the collection of fees for replacement nominees.
The SEC Hearing Officer, on June 30, 2000, restrained Forest Hills from collecting new membership fees, applied the previously paid fees to replacements, and awarded P50,000 attorney’s fees to Gardpro.
The SEC En Banc on June 28, 2001 affirmed the Hearing Officer’s decision except for attorney’s fees, ruling that by-laws authorized only a transfer fee, not additional membership fees, on nominee replacement.

Forest Hills appealed to the Court of Appeals (CA); on September 26, 2003, the CA denied the petition for review and affirmed the SEC decision in toto.
The CA held that the club’s by-laws (Sections 2.2.2 and 13.7) distinguished between membership fees (upon initial admission) and transfer fees (for nominee changes), requiring only the latter on replacement.
Motions for reconsideration and intervention by the Federation of Golf Clubs of the Philippines, Inc. as amicus curiae were denied on grounds of partiality and lack of public interest.

Whether replacement nominees must pay membership fees under contract interpretation rules.
Whether the CA encroached on the club’s prerogative to set its own rules and bylaws interpretation.
Whether amicus curiae intervention by the Federation should have been allowed.

Whether, under applicable rules on contract interpretation, replacement nominees of Gardpro should pay membership fees.
Whether the CA erred in infringing Forest Hills’ prerogative to determine its own membership rules and to construe its articles of incorporation and by-laws.
Whether the CA erred in denying the Federation of Golf Clubs of the Philippines, Inc. leave to intervene as amicus curiae.