Mr. Magdaleno B. Palacol, Jr.

December 26, 1991 Mr. Magdaleno B. Palacol, Jr. United Coconut Planters Bank UCPB Building, Makati Avenue Makati, Metro Manila S i r : This refers to your letter of August 26, 1991 requesting opinion whether a Board Resolution, which is inconsistent with the By-Laws, operates as an implied amendment to the By-Laws. By-Laws have been defined as the rules of action adopted by the corporation for its own government and for the government of its members and those having the direction, management and control of its affairs. (Agbayani, Commercial Laws of the Philippines, Vol. 3 p. 1470) The corporation is governed by its by-laws which are its private laws, and such self-imposed private laws, when valid, have substantially the same force and effect as the laws of the corporation as have the provisions of its charter insofar as the corporation and the persons within it are concerned. They are in effect written into the charter and in this sense, they become part of the fundamental law of the corporation, and the corporation and its board of directors and officers are bound by and must comply with them .(8 Fletcher Cyc. Corps. sec. 4197) Thus, a Board Resolution which is contrary to the express provisions of the By-laws, is void. ( SEC Letter dated January 31, 1985 addressed to Dr. Arsenio Pascual ).Your query is therefore answered in the negative. To effect a change or amendment in any provision in the By-Laws, the corporation must comply with Section 48 of the Corporation Code, quoted hereunder: "SECTION 48. Amendments to by-laws . The board of directors or trustees, by a majority vote thereof, and the owners of at least a majority of the outstanding capital stock, or at least a majority of the members of a non-stock corporation, at a regular or special meeting duly called for the purpose, may amend or repeal any by-laws or adopt new by-laws. The owners of two-thirds (2/3) of the outstanding capital stock or two-thirds (2/3) of the members in a non-stock corporation may delegate to the board of directors or trustees the power to amend or repeal any by-laws or adopt new by-laws: Provided, That any power delegated to the board of directors or trustees to amend or repeal any by-laws or adopt new by-laws shall be considered as revoked whenever stockholders owning or representing a majority of the outstanding capital stock or a majority of the members in non-stock corporations, shall so vote at a regular or special meeting. Whenever any amendment or new by-laws are adopted, such amendment or new by-laws shall be attached to the original by-laws in the office of the corporation, and a copy thereof, duly certified under oath by the corporate secretary and a majority of the directors or trustees, shall be filed with the Securities and Exchange Commission, the same to be attached to the original articles of incorporation and original by-laws. The amended or new by-laws shall only be effective upon the issuance by the Securities and Exchange Commission of a certification that the same are not inconsistent with this Code. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman