Atty. Benjamin P. Teodoro

October 1, 1985 Atty. Benjamin P. Teodoro 414 Regina Building Escolta, Manila Sir : This refers to your letter dated September 16, 1985 requesting for opinion/ruling on the queries posed therein. llcd It appears that you are contemplating to propose amendments to some portion of the by-laws of Iglesia Evangelica Unida de Cristo, a religious corporation aggregate registered with the SEC. You stated that the Church Officers are elected in the following manner: After the election of fifteen (15) directors composed of eleven (11) ministers and four (4) laymen, the four officers, namely General Superintendent (G. Sup.),General Secretary, General Treasurer and General Evangelist, are elected in that order from among the minister-directors. These officers are elected by change or by drawing of lots .For the election of the G. Superintendent, the names of the directors who garnered the first three highest number of votes will be written in three (3) pieces of paper, one director to each piece of paper, which are rolled and placed in a container. In another container are placed three (3) blank pieces of paper and the fourth in which the following words are written "You are selected by God".Each of the pieces of paper are rolled and after praying, a small child picks from the container a piece of paper, hands it to a member of the Committee on Election (COMELEC) who reads the name of the director from the paper picked. Another small child picks a piece of paper from the other container, hands it over to another member of the COMELEC who reads the contents of the piece of paper. If the paper is blank, another name is picked in the other container and the other child picks from the other. If nobody gets elected from the first three directors, the names of the directors gathering the next three highest number of votes will be drawn again in lottery and the same procedure as above stated is repeated, including in the drawing of lots the names of those ministers who were not elected directors but placing No. 12, 13, 14, etc. in the election of directors, until the G. Sup. is elected. The election of the other three (3) officers follows the same election procedure. To be qualified as a candidate for the position of G. Sup.,a minister must at least be forty-five (45) years old and not more than seventy (70) years old. Inasmuch as not all the elected eleven minister-directors, in every election, are qualified, it is possible that the G. Sup. may be elected from among the ministers who are not elected directors. The G. Sup. of your Church corresponds to the president of a corporation. From the foregoing facts you post the following queries: 1. Would it be in accordance with the Corporation Code, particularly Section 25, if your Church elected a G. Sup. who was not elected a director, but who subsequently becomes a director by virtue of his election as G. Sup.? 2. Is it in accordance with the provisions of the Corporation Code to provide in your by-laws for the relinquishment of the seat of an elected director to give way to a non-director who was elected an officer? 3. Your by-laws provide that all officers must be directors. Is this provision violated by another by-law provision electing a non-director but who subsequently becomes a director (in place of an elected director who under the by-laws must relinquish his seat) by virtue of his election as an Officer? Before going into your queries, your attention is invited to the following provisions of the Corporation Code relative to the manner of electing the Officers of a corporation: "SECTION 25. Corporate officers, quorum . Immediately after their election, the directors of a corporation must formally organize by the election of a president, who shall be a director, a treasurer who may or may not be a director, a secretary, who shall be a resident and citizen of the Philippines, and as such other officers as may be provided for in the by-laws." ...(emphasis supplied) "SECTION 92. Election and term of trustees . ... Unless otherwise provided for in the articles of incorporation or the by-laws, Officers of a non-stock corporation may be directly elected by the members ." It is very explicit from the aforequoted provisions that the officers of a non-stock corporation may only be elected either by the Board of Directors or directly by the members. Therefore, the proposed procedure for the election of your officers as described above is not legally feasible. In connection with your first query, Section 25 of the Corporation Code provides: "SECTION 25. Corporate officers, quorum . Immediately after their election ,the directors of a corporation must formally organized by the election of a president , who shall be a director ," ...(emphasis supplied) The above law requires that the president must be a member of the board of directors elected to that position by the members of the corporation in case of non-stock corporations. Your first query is therefore answered in the negative. Relative to your second query, the pertinent provision of the Corporation Code reads in part: "SECTION 34. 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. ...(emphasis supplied) The above-quoted provision of the Corporation Code prescribes the manner of choosing the members of the board of directors, which is done by election. Moreover, directors can only be removed in accordance with Section 28 of the Corporation Code which 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 :...(emphasis supplied) Query No. 2 is therefore answered in the negative. As regard your third query, the same is rendered moot and academic in view of our answers to queries Nos. 1 and 2. Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman