DOJ Opinion No. 192, s. 1988

DOJ OPINION NO. 192 , s. 1988 September 20, 1988 Atty. Marcelino C. Llao Vice-President-General Counsel National Power Corporation Diliman, Quezon City Sir : This refers to your request for opinion on whether or not the Officer-in-Charge designated by the President of the National Power Corporation ("NPC") may represent the latter as ex-officio Vice-Chairman of the National Power Board (the "Board") or as a member thereof in a Board meeting. You state that during the May 16, 1988 meeting of the Board, only three of its seven regular members were present; that among the absentees was Vice-Chairman Ernesto Aboitiz, who is also NPC President; that despite the presence of only three Board members, the Corporate Secretary declared a quorum by reason of the presence of the NPC Officer-in-Charge, SVP Higino H. Ibarra, who attended the meeting as representative of Vice-Chairman Aboitiz; that upon inquiry, you maintained that the said Officer-in-Charge cannot represent the NPC President in the latter's capacity as ex-officio Vice-Chairman of the Board and, accordingly, there was no quorum since the presence of the former should not have been considered for the purpose of determining the existence of a quorum in that meeting; and that it is, however, the position of the NPC Corporate Secretary that under the NPC By-Laws, upon his designation as Officer-in-Charge, SVP Ibarra assumed all the powers and functions of the NPC President, including the authority to act as ex-officio Vice-Chairman of the NPC Board and, therefore, that his presence in the May 16, 1988 Board meeting resulted in a quorum for said meeting. As a consequence of these conflicting views, the matter was referred to this department for opinion. prcd It appears from the additional papers furnished us that the Board had directed that the instant case be likewise referred to the Securities and Exchange Commission for resolution. For this reason, we should refrain from rendering opinion in deference to the said Commission. The Issue raised herein would require an application and/or interpretation of corporation law, of which the Commission is primarily charged with its enforcement. Pursuant to established policy and settled precedents of this Department, the Secretary of Justice should refrain from taking cognizance of matters over which another office or agency has primary jurisdiction, unless upon request of said office or agency (Opns., Secretary of Justice, No. 194, s. 1976; No. 169, s. 1979; No. 97, s. 1982; Nos. 18 and 139, s. 1986; and No. 95, S. 1987), in line with the rule that the opinion of said official, being advisory in nature, cannot prevail over the rulings of an agency on legal questions involving a statute which it is primarily tasked with enforcing (Opns., Id ., No. 145, s. 1973; No. 245, s. 1975, and Nos. 89 and 115, S. 1980). We are however, inviting your attention to the following authorities which we believe are pertinent to your query, to wit: 1. "Directors or trustees cannot attend or vote by proxy at board meetings (Sec. 2, The Corporation Code). 2. "The directors of a corporation cannot vote at directors' meetings by proxy, but must be personally present, and act for themselves. The rule is based on the premise that directors have been placed in office to exercise their personal judgment. As said in one case: 'If not present in person to give or receive business knowledge needed in conducting the affairs of the company, he has not performed his duty, because has not, in fact, participated in the deliberations of the board'" (Salonga, Law of Private Corporations, 3rd Ed., p. 245). prcd Very truly yours, (SGD.) SEDFREY A. ORDOEZ Secretary of Justice c.c.: Mr. Manuel S. Crudo Corporate Secretary National Power Corporation