Ms. Ma. Pelita B. Dotado-Viliran

August 4, 1998 Ms. Ma. Pelita B. Dotado-Viliran Legaspi & Associates Suite 708 Lansdale Tower Mo. Ignacia Cor. Timog Avenue Quezon City M a d a m : This refers to your letter dated July 20, 1998 inquiring whether or not the members, who are unable to attend the general membership meeting for the ratification of a proposed merger of two non-stock corporations , ratify the merger by mail, facsimile or other electronic means . While under Section 89 of the Corporation Code, members of a non-stock corporation may be allowed to vote by mail or other similar means, the same should be treated as a general provision for non-stock corporation applicable only in the absence of a specific provision in the Corporation Code on a particular subject matter . It should be noted that Section 77 of the Code specifically provides for the procedure in approving merger agreements applicable to both stock and non-stock corporations. Being a specific provision, it should be treated as an exception to Section 89. Section 77 of the Corporation Code provides as follows: "SECTION 77. Stockholders' or members' approval . Upon approval by majority vote of each of the board of directors or trustees of the constituent corporations of the plan of merger or consolidation, the same shall be submitted for approval by the stockholders or members of each of such corporations at separate corporate meetings duly called for the purpose . Notice of such meetings shall be given to all stockholders or members of the respective corporations, at least two (2) weeks prior to the date of the meetings, either personally or by registered mail. Said notice shall state the purpose of the meeting and shall include a copy or summary of the plan of merger or consolidation as the case may be. . . ." (Emphasis supplied) The above provision explicitly requires corporate mergers to be approved by the stockholders or members at a meeting duly called for the purpose . The Commission, on several occasions, has opined that in cases where the law requires a duly called meeting to carry out a corporate transaction, " constructive " or " electronic presence " is not a substitute for " actual presence ". ( Ltr. to Wilma M. Valdemoro-Cua dtd. 9/10/93 citing previous SEC Opinion dtd. 3/25/81 addressed to Atty. Victor Africa) Accordingly, your query is answered in the negative. However, it may be worth mentioning in this connection that the inability to attend membership meetings would not be a problem inasmuch as Section 58 of the Corporation Code, quoted hereunder, allows voting either in person or by authorized representative (proxy). "SECTION 58. Proxies . Stockholders and members may vote in person or by proxy in all meetings of stockholders or members. . . . ." (Emphasis supplied) "SECTION 89. Right to vote . . . . . Unless otherwise provided by the articles of incorporation or the by-laws , a member may vote by proxy in accordance with the provisions of this Code." (Emphasis supplied) Thus, unless proxy voting is denied in the articles of incorporation or by-laws, a member of a non-stock corporation who cannot attend in person may appoint a proxy to represent him/her in the membership meeting. For all intents and purposes, a proxy holder is an agent of the member clothed with the authority to exercise the latter's rights in the membership meeting as if the member was personally present. Very truly yours, (SGD.) DANILO L. CONCEPCION Associate Commissioner