Mr. Gerardo R. Gonzales

August 3, 1993 Mr. Gerardo R. Gonzales Meralco Employees Savings and Loan Association, Inc. Lopez Building Ortigas Ave., Pasig, Metro Manila S i r : This refers to your letter of July 23, 1993 requesting opinion on the following: 1. Validity of the Resolution of the Board of Directors of Meralco Employees Savings and Loan Association, Inc. proposing an amendment in the By-laws of the corporation providing for a two (2)-year term of office of the Board of Directors in the light of Sections 23 and 92 of the Corporation Code. dctai 2. Clarification on the proper interpretation of two provisions in the By-laws on the voting required for the approval by the members. Shall the voting by the members be based on one vote per member (Article XI) or one vote per P10.00 capital contribution deposit (Article III, Section 5). The above proposed amendment to the by-laws is allowable under Section 92 of the Corporation Code quoted hereunder: "SECTION 92. Election and term of trustees . Unless otherwise provided in the articles of incorporation or the by-laws , the board of trustees of non-stock corporations, which may be more than fifteen (15) in number as may be fixed in their articles of incorporation and by-laws, shall, as soon as organized, so classify themselves that the term of office of one-third (1/3) of the number shall expire every year and subsequent elections of trustees composing one-third (1/3) of the board of trustees shall be held annually and trustees so elected shall have a term of three (3) years. Trustees thereafter elected to fill vacancies occurring before the expiration of a particular term shall hold office only for the unexpired period." (Emphasis supplied) From the above phrase "unless otherwise provided in the articles of incorporation or by-laws" it is clear that a non-stock corporation may provide a desired term of office of the Board in the articles of incorporation or by-laws. The proposed amendment, however, shall be effective only upon approval of the Commission pursuant to Section 48 of the Corporation Code. Relative to the second issue, the pertinent provision of the Corporation Code provides: "SECTION 89. Right to vote . The right of the members of any class or classes to vote may be limited, broadened or denied to the extent specified in the articles of incorporation or the by-laws. Unless so limited, broadened or denied, each member, regardless of class, shall be entitled to one vote." (Emphasis supplied) The articles of incorporation or by-laws of a non-stock corporation, non-profit corporation may, therefore, provide for the desired voting rights of the members. Corollary thereto, the by-laws of the association attached to your letter provide: "SECTION 5. Voting . Except where the Corporation Law prescribed that particular corporate decisions shall be reached on the basis of one vote per member at every meeting of the members of the Association, every member present, (except the surviving spouse of a deceased employee) shall be entitled to one vote for each ten pesos (P10.00) that he has as capital contribution with the Association regardless of his total savings deposit or outstanding obligation with the Association, provided that each regular member shall be entitled to at least one vote." (Emphasis supplied) It was noted, however, that Article XI, Section 1, of the by-laws provides for different voting in case of amendment of the by-laws, and we quote: "SECTION 1. Amendments . These By-laws or any of them may be amended or repealed or new by-laws adopted by the majority of the Board and at least a majority of the members at any regular or special meeting called for the purpose, but this power to amend, repeal, or adopt new by-laws may be exercised by the Board in the manner provided by law." (Emphasis supplied) As a general rule, conflict of the provisions in the By-laws should be avoided by endeavoring to harmonize and reconcile every part so that each shall be effective. By-laws should be construed and given effect on the same manner and upon the same principle as statutes. It is well-settled that where there is in the same statute a particular or special provision, and also a general one which in its most comprehensive sense would include what is embraced in the special or particular provision, the latter must be operative, and the general provision can only affect such cases as not within the particular provision. General words do not derogate from special. This rule, which is designed to give effect to each and every part of the statute and not to render any part useless or meaningless, applies regardless of the position occupied by the special provision in the statute, it may come earlier or later than the general one: for the former is deemed to be an exception to the latter. (Statutes Alcantara, 1979 Revised Edition p. 85-86) Thus, applying the above principle in statutory construction on the present situation, the desired voting under Article III. Sec. 5 of the by-laws of the Association which is a general provision shall not apply, in cases of amendment of by-laws which is covered by a special provision under Sec. 1 Article XI of the by-laws which is well-within the mandate of Section 48 of the Corporation Code. prcd Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman