Atty. J. Vicente G. Sison

October 15, 1990 Atty. J. Vicente G. Sison 307 ITC Building 337 Sen Gil J. Puyat Avenue Makati, Metro Manila S i r : This refers to your letter dated September 26, 1990 requesting opinion on the legality of removing a member of the Board of Directors by mere Board action pursuant to the following provision of the by-laws of a corporation which appears to be in conflict with Section 28 of the Corporation Code: cdll "SECTION 20. Absent Directors . A director who is absent without a valid excuse from three consecutive regular meetings of the Board may be replaced as director at the discretion of the Board ." (Emphasis supplied) Relative thereto, please be advised that the Commission has adopted the policy of not rendering opinions or categorical answers on queries based on issues which may eventually be litigated in the future. The opinion which may be rendered thereon would not be binding upon private parties who would in all probability, if the opinion happens to be adverse to their interest, take issue therewith and contest it before the court. However, for information purposes only, the following are imparted. The Board of Directors has no power to remove one of its members ( SEC opinion dated September 5, 1979 addressed to Mr. Ramon G. Hechanova , citing Bruch v. National Guarantee Credit Corp. 13 Del. Ch. 1801) Neither can the Board replace the vacancy in the Board caused by removal. Said power is vested in the stockholders or members of the corporation. This well-settled doctrine is embodied in the Corporation Code, which explicitly provides: "SECTION 28. Removal of directors or trustees . Any director or trustee of a corporation may be removed from office by a vote of the stockholders holding or representing two thirds (2/3) of the outstanding capital stock, or if the corporation be a non-stock corporation, by a vote of two-thirds (2/3) of the members entitled to vote : . . . Any vacancy resulting from removal pursuant to this section may be filled by election at the same meeting without further notice, or at any regular or at any special meeting called for the purpose, after giving notice as prescribed in this Code. . . . (Emphasis supplied) It is the first requisite of validity that by-laws must be consonant with, and not repugnant to or in contravention of, the law of the land.(8 Fletcher, Sec. 4185) The by-laws are subordinate to the articles of incorporation as well as to the Corporation Code and related statutes, and should therefore not be inconsistent with any of these. Otherwise, they would have no binding effect. (Campos and Lopez Campos, Corporation Code citing Fleischer v. Botica Nolasco, G.R. 23241, March 14, 1925, 47 Phil. 584 (1925) Thus, in case of conflict between the Corporation Code and the By-Laws, the former shall prevail. llcd (SGD.) RODOLFO L. SAMARISTA Associate Commissioner