Sycip Salazar Hernandez & Gatmaitan

April 19, 1988 Sycip Salazar Hernandez & Gatmaitan 4th Floor, PAIC Building 105 Paseo de Roxas Makati, Metro Manila Attention : Atty . Emmanuel Paras Sir : This has reference to your letter dated March 30, 1988, requesting the opinion of the Commission on the propriety of the practice of a corporation on proxy by providing in the proxy form the following: "In case of the non-attendance of the proxy named, the stockholder authorizes the chairman of the meeting to fully exercise all rights as the proxy of the stockholder at such meeting." You have attached a sample form used by the corporation. You specifically, request confirmation that the phrase "non-attendance of the proxy" refers to both voluntary and involuntary non-attendance (e.g., death) of the proxy named. Relative thereto, it is settled that "a proxy holder is in the eye of the law an agent and as such a fiduciary" as the Delaware court has said: "A person acting as proxy for another is but the latter's agent and owes to the latter the duty of acting in strict accord with these requirements of a fiduciary relationship which inhere in the conception of agency." (Rice v. Hutchins, Inc. v. Triplex Shoe C. 16 Del. ch. 298, 147 cited in Ballantine on Corporations, p. 409) An examination of the proxy form shows that the stockholder, as principal, has appointed two agents, namely, the proxy designated in the form and the chairman of the meeting as alternate who may act as proxy in the event of the non-attendance of the designated proxy. The death of the designated proxy results in the extinguishment of the agency established between him and the stockholder. "Agency in general is terminated by the death of the principal, or of the agent , or by the loss of capacity by either party, unless this is changed by statute." (Emphasis ours, Note, 44 Harv. L. Rev., 265 cited in Ballantine on Corporation, p. 409.) However, another agency is established between the stockholder and the chairman of the meeting in view of the non-attendance of the designated proxy. It must be noted that the power to act as proxy has its source in the principals' consent, as borne out by the terms of the proxy. Hence, such authority will extend to the alternate proxy regardless of the death of the proxy holder. From the foregoing, it is, therefore, opined that the phrase "non-attendance" refers to both voluntary and involuntary causes. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman