Mr. Miguel G. Esguerra

November 15, 1983 Mr. Miguel G. Esguerra Mendez, Cavite Sir : This refers to your letter dated June 6, 1983, requesting for clarification as to whether proxy can be counted in determining a quorum for the corporation to transact business. llcd The system of proxy voting is not a mere convenience or favor to the distant and different shareholders. It is very important to the management in obtaining a quorum and adoption of its proposals (Ballantine on Corporations p. 411). Sections 24 and 58 of the Corporation Code of the Philippines provides, thus: "SECTION 24. Election of directors or trustees . At all election 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. ... In stock corporations, every stockholder 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 where the by-laws are silent, at the time of the election." xxx xxx xxx (emphasis supplied) "SECTION 58. Proxies . Stockholders and members may vote in person or by proxy in all meetings of stockholders or members. xxx xxx xxx (emphasis supplied) The foregoing provisions expressly allow presence and voting of stockholders either in person or by authorized representative. Proxy, therefore, should be counted in determining the existence of a required quorum in all stockholders' meeting. Without this device, the inability of the stockholders to attend in person might make it impossible to secure the quorum necessary to take corporate action. Section 25 of the Corporation Code, however, denies voting or attending by proxy at board meetings. The law provides, thus: "SECTION 25. Corporate Officers, quorum . xxx xxx xxx Directors or trustees cannot attend or vote by proxy at board meetings." llcd Please be guided accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman