Mr. Noe S. Andaya

April 8, 1992 Mr. Noe S. Andaya Armed Forces of the Philippines Savings & Loan Association AFPSLAI Building EDSA, Cor. Col. Serrano Road Camp Aguinaldo, Quezon City S i r : This refers to your letter dated April 2, 1992 requesting opinion whether the Chief of Staff of the Armed Forces of the Philippines can still represent the residual and unassigned votes of the Philippine National Police (PNP) members as proxy under Section 5 of Article IV of the By-Laws of the Armed Forces of the Philippines Savings & Loan Association, Inc. which reads as follows: "SECTION 5. Voting . At all meetings, a member shall be entitled to one (1) vote for every P100.00 capital contribution or a maximum of one thousand (1,000) votes irrespective of the amount of his capital contribution as of December 1st immediately preceding the annual meeting which shall be the basis for computing the number of votes each member shall be entitled to; Provided, further, that during the period from December 1st to the date of the Annual Meeting, said contribution shall not be reduced below the amount of contribution as of December 1st; Otherwise, he shall be entitled only to the number of votes corresponding to the remaining balance as of February 1st; Provided finally that the Chief of Staff, AFP shall be entitled to cast the number of votes remaining after deducting the total votes of the members and the proxies present from the total registered number of votes of qualified members .(As amended on July 12, 1986)." Your query is premised on the fact that the PNP is now under the Department of Interior and Local Government (DILG) unlike before when it was under the Department of National Defense and was a part of the AFP. It is your contention that with the separation of the PNP from the control and supervision of the AFP, the Chief of Staff of the AFP cannot continue representing the residual votes of the members who belong to the PNP in the forthcoming election of the AFPSLAI Trustees since that right now properly belongs to the Director General of the PNP who must now exercise that right. The above-cited provision does not state that the Chief of Staff of the AFP shall represent only the residual votes with respect to the members who are under the Department of Defense or Armed Forces of the Philippines. Therefore it should be construed as applicable to all members in general, regardless of what Department the members belong . Said provision is consistent with Section 89 of the Corporation Code which declares that the right of the members of non-stock corporation may be limited, broadened or denied to the extent specified in the articles of incorporation or by-laws . In this connection, it has to be emphasized that by-laws are the private laws of the corporation. They are in effect written into the charter and in this sense, they become part of the fundamental law of the corporation, and the corporation, its directors, officers, and members are bound by and must comply with them .(8 Fletcher, Sec. 4197) Accordingly, procedures or any matter different or inconsistent from that specifically provided for in the by-laws of the corporation will run contrary to the basic tenet that the by-laws of the corporation is a rule for the government of the corporation and its stockholders or members in the conduct and management of its affairs. ( Letter dated September 18, 1990 addressed to Mr. Saliyusa H. Suhod, Al-Haj citing previous opinion) Thus, unless and until the above By-law provision is changed, modified or repealed in accordance with Section 48 of the Corporation Code of the Philippines, the corporation is duty bound to observe and follow the same. Please be advised accordingly. LexLib Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman