Engr. Oscar U. Cadag

June 7, 2002 SEC OPINION Engr. Oscar U. Cadag Antel Sea View Towers Condominium Association, Inc. 2626 Roxas Blvd. Pasay City S i r : This has reference to your fax-letter dated 10 April 2002 requesting opinion on the queries posed therein relative to Antel Sea View Towers Condominium Association, Inc. As stated, a General Assembly meeting was held last April 6, 2002 for the purpose of electing the board of directors who will serve from April 7, 2002 up to the first Saturday of April 2003. However, no quorum was established in the said meeting necessitating the incumbent board to hold-over their office until their successors are duly elected and qualified. In the interim, some directors lost interest and resigned even before the next election could be held. The hold-over board constituting a quorum decided to appoint members of good standing to act as directors in lieu of those who resigned. A hold-over board of directors cannot just select from among the members in good standing a replacement for those directors who resigned during the period of the hold-over status. Section 29 of the Corporation Code laid down the procedure for vacancies in the office of the director quoted in part hereunder: 'Sec. 29. Vacancies in the office of director or trustee. Any vacancy occurring in the board of directors or trustees other than by removal by the stockholders or members or by expiration of term, may be filled by the vote of at least a majority of the remaining directors or trustees, if still constituting a quorum; otherwise, said vacancies must be filled by the stockholders in a regular or special meeting called for that purpose. A director or trustee so elected to fill a vacancy shall be elected only for the unexpired term of his predecessor in office ...(emphasis supplied) In the case on hand, the term of all the directors has already expired. To "hold-over" when applied to an office implies that the office has a fixed term which has expired and the incumbent is holding the succeeding term (Corporation C od e Annotated by Rosario N. Lopez p. 388 citing Words and Phrases vol. 14, p. 238). A director who resigned during a hold-over status can only be replaced in an election duly called for that purpose since his term has already expired. However, the hold-over board can re-organize. The hold-over directors have the power to elect or choose the officers as they may deem necessary to implement their policies. The hold-over board is possessed of the same powers as would have been enjoyed by the new board that would have been elected at the annual meeting ( Ibid. citing State vs. Vanderbilt 164 SW 451 ). Notwithstanding the possibility that a quorum could not be established, it is incumbent upon the hold-over board of directors to call for another General Assembly meeting until a new set of directors could be elected. The regular election of directors as stated in the by-laws cannot be dispensed with by the board of directors in order to extend their term ( Ibid. p. 388 citing SEC opinion dated 16 March 1993 ). Anent thereto, in compliance with the reportorial requirements of corporations registered with SEC, the corporation should submit the General Information Sheet together with the Affidavit of Non-holding of Annual Meeting within thirty (30) days from date of annual meeting as specified in the by-laws. Please be guided accordingly. Very truly yours, (SGD.) BENITO A. CATARAN Director