Mr. Jimmy T. Tang

April 8, 1997 Mr. Jimmy T. Tang Federation of Filipino-Chinese Chambers of Commerce of Industry, Inc. 6th Flr.,Federation Center, Muelle De Binondo St. Manila S i r : This refers to your letter dated March 31, 1997 requesting opinion on whether or not the proposal to " automatically elect " the past presidents of the Federation as members of the Board of Directors without complying with the process and manner prescribed by the By-laws is legally feasible. The pertinent provisions of the Corporation Code provide: "SECTION 23. The board of directors or trustees . Unless otherwise provided in 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. ..." (Emphasis supplied) "SECTION 24. Election of directors or trustees . At all elections of directors or trustees, there must be present either in person or by 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 members. In stock corporations, every stockholders entitled to vote shall have the right to vote in person or by proxy the number of shares of stock standing, at the time fixed in the by-laws, in his own name on the stock books of the corporation, or when the by-laws are silent, at the time of the election; and said stockholder may vote such number of shares for as many persons as there are directors to be elected or he may cumulate said shares and give one candidate as many votes as the number of directors to be elected multiplied by the number of his shares shall equal, or he may distribute them on the same principle among as many candidates as he shall see fit; Provided, That the total number of votes cast by him shall not exceed the number of shares owned by him as shown in the books of the corporation multiplied by the whole number of directors to be elected: Provided, however, That no delinquent stock shall be voted. 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 .Any meeting of the stockholders or members called for an election may adjourn from day to day or from time to time but not sine die or indefinitely if, for any reason, no election is held, or if there are not present or represented by proxy, at the meeting, the owners of a majority of the outstanding capital stock, or if there be no capital stock, a majority of the members entitled to vote. (Emphasis supplied) The above-cited provisions clearly require that the Board of Directors shall be elected by the stockholders/members in accordance with the procedure laid down therein. Accordingly, an automatic declaration of past presidents of the Federation as elected members of the Board of Directors is not allowable. Very truly yours, (SGD.) PERFECTO R. YASAY, JR. Chairman