FACTS:

The case involves a petition for review on certiorari filed by Cebu Country Club, Inc. (CCCI) and its Board of Directors. CCCI is a non-profit and non-stock private membership club operating in Cebu City. In 1987, the respondent, Ricardo F. Elizagaque, was designated as a special non-proprietary member of CCCI by San Miguel Corporation. In 1996, he applied for proprietary membership and purchased a proprietary share for P3 million. Despite this, the Board of Directors deferred action on his application during meetings on April 4, 1997 and May 30, 1997. Ultimately, on August 1, 1997, the respondent received a letter informing him that his application was disapproved. The respondent then sent letters of reconsideration to CCCI, but received no response. Consequently, he filed a complaint for damages against the petitioners with the Regional Trial Court (RTC) in Pasig City. The RTC ruled in favor of the respondent and awarded him compensatory damages, moral damages, exemplary damages, attorney's fees, and litigation expenses. The decision of the RTC was affirmed with modifications by the Court of Appeals. The petitioners sought reconsideration, which was denied by the appellate court. Hence, the petition for review on certiorari.

ISSUES:

1. Whether petitioners are liable to respondent for damages in disapproving his application for proprietary membership with CCCI.

2. Whether the liability of petitioners is joint and several.

RULING:

1. Yes, petitioners are liable to respondent for damages in disapproving his application for proprietary membership with CCCI. The Court of Appeals affirmed the trial court's finding that there was bad faith on the part of petitioners in disapproving respondent's application. The Court held that the non-approval of respondent's application without giving any valid reason constitutes a breach of contract and a violation of respondent's rights as a member. Therefore, petitioners are liable for damages.

2. The liability of petitioners is joint and several. The Court of Appeals affirmed the trial court's ruling that petitioners, as members of the Board of Directors who participated in the voting and decision-making process, are jointly and severally liable for the damages awarded to respondent. As such, each petitioner is liable for the entire amount of damages awarded.

PRINCIPLES:

• Non-approval of an application without valid reason constitutes a breach of contract and a violation of rights.

• Members of the Board of Directors who participate in the voting and decision-making process are jointly and severally liable for damages.