Alberto, Salazar & Associates

December 12, 1988 Alberto, Salazar & Associates Law Office Suite 212 Rufino Building 6784 Ayala Avenue, Makati, Metro Manila Sir : This refers to your letter, dated November 28, 1988, requesting for opinion as to whether a nominee or representative of a corporate member in a condominium corporation qualifies as a director therein. cdll The pertinent provisions of the Corporation Code read as follows: SECTION 23. . . . Unless otherwise provided on this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks, or where there is no stock, from among the members of the corporation ,who shall hold office for one (1) year and until their successors are elected and qualified. ... Trustees of non-stock corporations must be members thereof ....(Emphasis supplied) SECTION 92. "...No person shall be elected as trustee unless he is a member of the corporation ...." From the foregoing, it is unequivocably required that whoever occupies the position of director or trustee in a non-stock corporation must be a member thereof. As to who are the members of a condominium corporation, Section 2A of R.A. 4726 * , otherwise known as the Condominium Act provides thus: "A condominium is an interest in real property consisting of a separate interest in a unit in a residential, industrial or commercial building and undivided interest in common directly or indirectly, in the land on which it is located and in the other common areas of the building. A condominium may include in addition, a separate interest in other portions of such real property. Title to the common areas, including the land or the appurtenant interests in such areas, may be held by a corporation specifically formed for the purpose (hereinafter known as the Condominium Corporation) in which the holders of separate interest shall automatically be member or shareholders, to the exclusion of others in proportion to the appurtenant interest of their respective units in the common areas. ...(emphasis supplied). In addition, Section 10 of R.A. 4726 is quoted in part thus: "...Membership in a condominium corporation, regardless of whether it is a stock or non-stock corporation, shall not be transferable separately from the condominium unit of which it is appurtenance. ...". Considering the foregoing, and applying the ruling expressed the previous opinions of the Commission, a corporate unit owner and member of a condominium corporation cannot designate a representative or nominee to the board of directors. ( SEC letters addressed to Atty. Renato Liboro, dated June 2, 1986; Atty. Antonio Pastoleros, dated July 16, 1985 ). Furthermore, a corporation, being a juridical person is not qualified to occupy the position of a director. Although the Corporation Code does not contain an express provision to the effect that only natural persons can be elected as directors, yet, jurisprudence in corporation law acknowledges the discrimination. A corporation cannot act by itself but only through its officers and agents, being a juridical person. Such being the case, a corporation cannot attend personally board meeting of the corporation wherein it was elected a director, but only through a representative, hence, under such circumstances, whoever represents a corporation as a director is doing so in his capacity as "proxy" of the director. This is not allowed in this jurisdiction, considering the well-established principle in corporation law that "a director may not be represented by a proxy at a meeting of the board". ( SEC letters to Atty. Liboro, Supra.; Mr. Dante Sarraga, dated June 26, 1969 ,citing C.J.S. Vol. 19, p. 96; Dawdie v. Central Bank Co. 189 N.E. 145). Our answer to your query is therefor in the negative. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman * Copied verbatim from documents obtained directly from the Securities and Exchange Commission .