Ms. Celedonia M. Aquino

December 16, 1991 Ms. Celedonia M. Aquino 14 T. M. Kalaw Street Tierra Pura, Tandang Sora Quezon City M a d a m : This refers to your letter of October 2, 1991 requesting opinion on the legality of the proposal of Philippine Central Conference of the Methodist Church to elect a bishop for life without having to go through an election and continue to be a bishop until he retires. Article V(1) of the By-Laws of Philippine Central Conference of the Methodist Church provide: "1. The Officers of the corporation shall consist of the Bishop of the area, a Secretary and Treasurer, all of whom shall be elected in accordance with the law of the Methodist Church." (Emphasis supplied) It appears from the above By-law provision that the Bishop of subject Church is considered an "Officer".Contract of employment for life or indefinite period of officers and other key personnel are generally invalid because they bind the hands of future board of directors. (2 Fletcher, Sec. 336, citing Massachusetts, Wilson v. Jennigs, 344 Mass 608, 184 NE 2nd 642).It has been a long standing policy of the Commission not to allow a provision in the articles of incorporation or by-laws providing for a life-time term of office of the corporate officers. This is precisely to avoid possible abuse of persons in power. Likewise, a life-time term of office absolutely deprives other members of the corporation of the opportunity to become officers of the corporation. This policy of the Commission not to allow perpetual term is well justified by Section 25 of the Corporation Code, quoted hereunder, which provides that the officers shall be elected after the election of the Board. "SECTION 25. Corporate Officers ,quorum. Immediately after their election, the directors of a corporation must formally organized by the election of a president, who shall be a director, a treasurer who may or may not be a director, a secretary who shall be a resident and citizen of the Philippines, and such other officers as may be provided for in the by-laws. ..." (Emphasis supplied). It can be deduced from the above provision that the term of the officers cannot extend beyond that of the directors. Under Article III (1) of the by-laws of subject corporation, quoted hereunder, the Board of Trustees shall have a term of four (4) years. "These shall be nine trustees for the Central Conference, three elected by the Philippines Annual Conference, three by the Northern Philippines Annual Conference and three by the Northwest Annual Conference. They shall hold office for a term of four years .New trustee shall be elected within the year succeeding the quadrennial session of the General Conference of the Methodist Church. Accordingly, allowing the bishop of your Church who is considered an officer under its by-laws, to serve beyond the term of the Board of Trustees or for a life time term is contrary to the aforecited provisions of the Corporation Code and By-laws, hence, not valid and binding and therefore, should not be countenanced. Your attention is also invited to the manner of electing the trustees of the corporation as provided for in the above-cited By-law provision which appears to be inconsistent with the following provision of the Corporation Code. "SECTION 24. Election of directors or trustees . At all elections of directors or trustees, there will be present either in person or representative authorized to act by written proxy, the owners of the majority of the outstanding capital stock, or if there be no capital stock, a majority of the members entitled to vote .The election must be by ballot if requested by any voting stockholder or member ....Unless otherwise provided in the articles of incorporation or in the by-laws, members of corporations which have no capital stock may cast as many votes as there are trustees to be elected but may not cast more than one vote for one candidate. Candidates receiving the highest number of votes shall be declared elected. ...." (Emphasis supplied) The aforequoted provision of law provides that the members of the Board of a non-stock corporation shall be elected by the members and it is necessary that a t least majority of all the members entitled to vote must be present either in person or by proxy at the meeting held for the purpose. In view thereof, you are hereby advised to amend said provision of your By-laws to conform with the aforecited provision of the Corporation Code. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman