Atty. Leonides S. Respicio

March 25, 1987 Atty. Leonides S. Respicio 4842 Valenzuela cor. V. Mapa St. Sta. Mesa, Manila Sir : This refers to your letter dated February 23, 1987, inquiring as to whether your client, a non-resident Japanese citizen ,who is a stockholder of a corporation engaged in furniture manufacturing and trading business on a wholesale basis, can be elected as a President or Treasurer of that corporation. In reply thereto, please be advised that the Commission, in its previous opinions, has ruled that in firms engaged in wholly or partially nationalized activities , aliens are banned from being appointed to management positions as president, vice-president, treasurer, auditor, etc., of companies pursuant to the ruling of the Ministry of Justice, although they can be elected directors in proportion to their allowable participation or share in the capital of such activities in accordance with the Anti-Dummy Law, as amended by P.D. No. 715. (SEC Opinions dated June 14, 1982; July 1, 1983; May 15, 1985; May 28, 1985). Accordingly, a Japanese citizen, cannot be elected as president or treasurer of a domestic corporation engaged in nationalized or partially nationalized activities. Conversely where the existing laws do not prescribe any limitation on the amount of foreign investment in an economic activity, a foreigner may be elected as president or treasurer thereof, subject to the qualifications set forth in Section 25 of the Corporation Code pertaining to the President. Said provision is quoted in part as follows: "Immediately after their election, the directors of a corporation must formally organized by the election of a president, who shall be a director." Thus, considering that the business of the company is neither nationalized nor partly nationalized activity, your client can be elected as President. However, being a non-resident, he cannot be elected as treasurer in view of the following authorities pertinent thereto: "The treasurer of a private corporation is ordinarily the custodian of its funds with authority to disburse them in a proper case; this power he has by virtue of his office, (2 Fletcher, Cyc, Corps. 1969 Rev. Vol. sec. 654, p. 806).The treasurer of a corporation is the proper officer, and the only proper officer in the absence of express provision to the contrary, to receive and keep the moneys of the corporation. (Fletcher, Supra.,citing Abro Mining & Milling Co. v. Chinn, 20 Colo. App. 238, 77 p. 1097; Donbury & M.R.Go. v. Wilson, 22 Conn. 435, and others),and he is bound to disburse the corporate funds, under the orders of the directors or other officers in charge of the corporate business. (Alin Mathieson Chemical Corp. v. Planters Corp. 236 SC 318, 114 SE 2nd, 321).He has authority to receive and receipt for moneys due the corporation," (Brown v. Winnisimmet Co.,11 Allen 326). Thus while the Corporation Code does not impose a Philippine residency requirement of a treasurer, nevertheless, considering the nature of his functions as hereinabove set forth, good corporate practice dictates that the treasurer must be a resident of the Philippines . Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman