Mr. Orlando C. Paray

July 14, 1986 Mr. Orlando C. Paray c/o Valley Golf Club, Inc. Antipolo, Rizal Sir : This relates to your letter, dated July 1, 1986, requesting the opinion of this Commission on the queries posed therein. It appears therein that Proxy No. 0009-B was executed by Mr. Mario Rustia, appointing Atty. E. Baculi as his proxy in the annual meeting and special meetings of Valley Golf Club, Inc.,and any adjournment thereof for a period of one (1) year from August 24, 1985 .It appears further that on June 26, 1986, Mr. Rustia sent you a letter as corporate secretary of Valley Golf Club, Inc.,informing you that he is extending the period of Proxy No. 0009-B in favor of Atty. Baculi for another one (1) year, such that you need not send him another proxy form for the 1986 annual stockholders' meeting of the Club. Hence, your queries are: Is it valid and justified for you as corporate secretary of Valley Golf Club, Inc. to accept and recognize the proxy as extended for another year merely by virtue of the letter of Mr. Rustia, dated June 26, 1986. Corollary thereto, may the proxy named therein lawfully represent the stockholder in the annual stockholders' meeting of the club to be held in September 1986. Anent thereto, a proxy is properly the authority given by a shareholder to another to vote for him at a stockholders' meeting. The term is also used to refer to the instrument or paper which is evidence of authority of the agent and also to the agent or proxy holder who is authorized to vote. (Fletcher, Cyc. Corps.,1976 Rev. Vol.,sec. 2050, p. 228, citing Steinberg v. American Bantam Car Co.,76 F Supp. 426, dismd. 173 F2d 179; and others).The right to vote by proxy is now generally given, in the case of stock corporations, by a general statutory or constitutional provision, or by charters, or else it is provided for in the by-laws of corporations and is as effective as voting in person, (Fletcher, Supra.,citing Smith v. San Francisco & N.P. Ry. Co.,115 Col. 584, 47 p 582, 35 LRA 309, 56 Am. St. Rep. 119, Goldboss v. Reinmann, 55 F. Supp. 811, Aff'd 143 F2d 594). The pertinent provisions of the Corporation Code of the Philippines provide thus: "SECTION 58. Stockholders and members may vote in person or by proxy in all meetings of stockholders or members. Proxies shall be in writing, signed by the stockholders or members and filed before the scheduled meeting with the corporate secretary. Unless otherwise provided in the proxy, it shall be valid only for the meeting for which it is intended. No proxy shall be valid and effective for a period longer than five (5) years at any one time." In line with the above provisions, Section 5, Article III of the approved amended by-laws of Valley Golf Club, Inc. provides, thus: cdlex "Proxies. Every stockholder entitled to vote at any meeting of stockholders may so vote by proxy, provided that the proxy shall have been appointed in writing by the stockholders himself or by a duly authorized attorney-in-fact." " No particular form or words are necessary to constitute a proxy, unless expressly required. All that is necessary is that the writing shall show an intention to empower the person to whom it is given to act as agent in voting the stock, and to enable the election officers to know that it is authorized ." (5 Fletcher, Cyc. Corps., 1967 Rev. Vol., sec. 2056, p. 256, citing Smith v. San Francisco & N.P. Ry. Co., 115 Cal. 584, 47 p 582, 35 LRA 309, 56 Am. St. Rep. 119). In other words, the use of proxies in corporate elections should not be hedged about by restrictions which because of practical considerations, are almost prohibitive. (Fletcher, Supra., p. 257, citing Investment Associates, Inc. v. Standard Power & Light Corp., 29 Del-Ch. 225, 48 A. 2d 572; Atterbury v. Consolidated Coppermines, Cor., 26 Del. Ch. 1.20 A2d 743; and others). An additional requirement is imposed by Section 58 of the Corporation Code to the effect that proxies should be filed with the secretary of the meeting which should be done at such time before the meeting as may be provided for in the corporate charter or by-laws. In the absence of express provision to the contrary, a proxy cannot be rejected because it merely states the year and month, and not the day of the election. (Fletcher, sec. 2056, pp. 259-260, citing In re: Townsland, 64 Hun. 636, 18 N.Y.S. 905). In general, therefore, the authority of a proxy may be extended beyond the period fixed in the proxy instrument but within the limitation period imposed by law, by mere letter signed by the stockholder naming his proxy. "No particular form of words is required to constitute a proxy. Like any other agency, an instrument creating it may be informal. (13 Am. Jur.,sec. 497). However, there seems to be a legal technicality in the letter of Mr. Rustia, dated June 26, 1986, for it states that he is extending proxy No. 0009-B in favor of Atty. Baculi for one year "from date of proxy attached" and not "from original expiry date," although intent is otherwise. Considering the foregoing, it is suggested that you call the attention of Mr. Rustia on this matter. llcd Very truly yours, (SGD.) JULIO A. SULIT, JR. Acting Chairman