Dean Lydia G. Tapia

September 6, 1989 Dean Lydia G. Tapia Philippine Nurses Association 1663 F.T. Benitez St. Malate, Manila Madam : This refers to your letter dated August 7, 1989, inquiring on whether the following proposed amendments to the by-laws of Philippine Nurses Association are in accordance with the SEC rules and regulations on the matter: "Article VII General Membership Meeting 1. Section . Frequency and Venue The Association shall hold an Annual Convention in October even outside the principal office provided that it is within the Philippines with proper notice, Provided further that the venue shall be decided by the general membership during the Annual Business Meeting. cdll 2. Section 4 . Quorum Fifty percent plus one (50 + 1) of all registered members attending the convention shall constitute a quorum." Relative to the first proposed amendment, Section 93 of the Corporation Code provides: "SECTION 93. Place of Meetings . The by-laws may provide that the members of a non-stock corporation may hold their regular or special meetings at any place even outside the place where the principal office of the corporation is located :Provided, that proper notice is sent to all members indicating the date, time and place of the meeting :and Provided, further, that the place of meeting shall be within the Philippines ." (emphasis supplied) The holding of annual members meeting of non-stock corporations outside the place of principal office is therefore allowable provided that proper notice is sent to all members and the place of meeting shall be within the Philippines. However, it appears from the proposed amendment that the venue of the annual convention shall be determined during the same meeting. In this connection, it is to be noted that in construing the by-laws, the annual convention and general membership meetings are treated the same and are usually referred to as the annual election of the association. It is therefore suggested that you modify the provision in such a manner that the venue of the annual meeting shall be determined prior to the holding thereof. Anent the second proposed amendment, Section 52 of the Corporation Code provides that " Unless otherwise provided for in this Code or in the by-laws , a quorum shall consists of the stockholders representing a majority of the outstanding capital stock or majority of the members in case of non-stock corporations." In like manner, Section 47 of the Code provides that "subject to the provisions of the Constitution, this Code, other special laws, and the articles of incorporation, a private corporation may provide in its by-laws for: ...3. The required quorum in meetings of stockholders and members and the manner of voting them. The by-laws may therefore provide for the required quorum in meetings. However, in determining the quorum, the basis should be on the total number of registered members not only on the number of members present during the meeting. It is therefore suggested that the phrase "attending the convention" be deleted. Further, it should be emphasized that the provision in the by-laws relative to quorum will not hold true in those instances where the Corporation Code or applicable special law explicitly prescribes the proportion of stockholders or members necessary to resolve or carry out a particular corporate proposal. In such cases therefore, the quorum shall consist of such ratio of stockholders or members as may be declared by statutory provisions. It is a cardinal rule that a by-law providing what shall constitute a quorum is invalid if it is in conflict with the provisions of statute on the subject (5 Fletcher, Cyc. Corp. Sec. 2013). Thus, where the number necessary to constitute a quorum is prescribed by statute, a by-law requiring less than the proportion required by the particular legislation is subordinate to the statute. "By-laws cannot be used to defeat the provisions of the statute." (Fletcher, Supra) Please be guided accordingly. Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner