Justice Milagros A. German

March 21, 1991 Justice Milagros A. German Department of Agrarian Reform (DAR) M a d a m : This refers to your letter of February 13, 1991 manifesting doubts on the validity of a sale of a parcel of land of a corporation without authority from the Board of Directors but was allegedly considered by the SEC as a valid transaction. In connection therewith, please be advised that as a matter of policy, the Commission refrains from taking any action involving justiciable issues which can only be clarified and determined in a proper proceeding. The opinion or comments 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. Thus, unless the case is brought before us in a proper proceeding, the Commission cannot make appropriate action thereon. However, for information purposes only, the following may be imparted. It is well-settled that the board of directors is the governing body of the corporation with whom the management of the corporate affairs is vested. The pertinent provisions of the Corporation Code provide thus: SECTION 23. The Board of Directors or trustees . Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from and among the holders of stocks. ...." (Emphasis supplied) "SECTION 25. Corporate officers, quorum . Unless the articles of incorporation or the by-laws provide for a greater majority, a majority of the number of directors or trustees as fixed in the articles of incorporation shall constitute a quorum for the transaction of corporate business, and every decision of at least a majority of the directors or trustees present at a meeting at which there is a quorum shall be valid as a corporate act, ...." (Emphasis supplied) From the foregoing, it is clear that the power and authority to manage and conduct the affairs of a corporation is vested upon the Board of Directors acting as a body .The general rule therefore is that the power to bind a corporation rests in its board of directors. All other agents normally receive their authority by delegation from the Board. Accordingly, any act involving the affairs of the corporation not duly authorized by the Board of Directors is not binding on the corporation. cdll Very truly yours, (SGD.) GONZALO T. SANTOS, JR. Associate Commissioner