Bausa Ampil Suarez Paredes and Bausa

March 3, 1980 Bausa Ampil Suarez Paredes and Bausa 5th Floor Madrigal Building Escolta, Manila Gentlemen: This refers to your letter dated February 1, 1980, requesting opinion on the query presented therein. As narrated, during the last stockholders' meeting of CEU held on May 8, 1979, more time was wasted in the discussion and evaluation of the stockholders' proxies, thus causing unnecessary delay and prompting the stockholders to pass a resolution directing the board to consider the advisability of amending the by-laws to avoid its recurrence. Accordingly, an amendment was prepared but it is held in abeyance due to certain policy pronouncement from the Ministry of Education and Culture. Instead, the hereinbelow quoted board resolution was considered, enjoining all stockholders to file and submit their stockholders' proxies not later than three (3) working days before any stockholders/ meeting. It reads: "WHEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, that any and all stockholders of Centro Escolar University entitled to vote be as they are hereby urged and enjoined to file and/or submit their stockholders' proxies to the Office of the CEU Corporate Secretary, 11 Mendiola, Metro Manila, at least three (3) working days before the day set for the meeting of the stockholders at which the proxy shall attend. RESOLVED FURTHER, that the Corporate Secretary be as he is hereby authorized, empowered and directed to release the necessary "Notices of Annual Meeting of Stockholders for May 13, 1980," to all stockholders of the university as soon as possible, said Notices to contain he substance and rationale of this resolution". The CEU by-laws partly provides: cdlex "SECTION 3. Voting . In any meeting of the stockholders, stockholder entitled to vote can delegate the power to vote to another provided the latter has express written authority from the stockholders or his representative duly authorized in writing for the purpose. The document delegating the power to vote shall be presented to the Secretary and to the election inspectors, and shall be left in the custody of the Secretary". QUERY: Does the proposed resolution contravene the above-quoted provision of the by-laws or any corporate practice as to render it illegal and invalid? Would the injunction to the stockholders to file and submit their proxies to the Office of the Corporate Secretary at least three (3) working days before the meeting amount to an illegal curtailment of and an unjust imposition upon the freedom over property rights, considering that the tenor of the resolution allows the filing of proxies even up to the time of the meeting? The views of the Commission may be expressed thus; If the above resolution is merely intended as a regulatory measure or an appeal to persuade the stockholders to submit their proxy at least three days prior to the date of the meeting to avoid waste of time in determining its validity including lengthy preliminaries during the meeting without, however, precluding the stockholders to present or submit their proxies after the said period, this Commission subscribes to the rationale and substance of its adoption. However, if the said resolution is meant to compel the submission of the proxy instrument within the period stated the same partakes the nature of an amendment of the by-laws, hence, its adoption is beyond the competence of the Board of Directors. Please be guided accordingly. LexLib Very truly yours, For the Chairman: (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department