Atty. Edilberto S. Gaddi

August 17, 1998 Atty. Edilberto S. Gaddi E.G. Gaddi and Associates 7033 Kabihasnan Cor. Bonifacio San Dionisio, Paraaque City S i r : This refers to your letter dated August 14, 1998, requesting opinion on whether or not non-dues paying shares should be allowed to vote or be voted for in the forthcoming election of Orchard Golf and Country Club. In " stock corporations ", each share of stock, under Section 6 of the Corporation Code, is entitled to vote, unless denied in the articles of incorporation or declared delinquent under Section 67 of the Code. Likewise, under Section 47 of the Code, the corporate by-laws may provide for qualification/disqualification requirement for the election of the members of the Board of Director. In the case of " non-stock corporations ", Section 89 of the Corporation Code provides that "the right of the members of any class or classes to vote may be limited, broadened or denied to the extent specified in the articles of incorporation or by-laws. Unless so limited broadened or denied each member, regardless of class, shall be entitled to one vote ." Thus, the answer to your query depends on whether or not the stockholder/member referred to in your letter is denied the right to vote and be voted for, in the articles of incorporation or by-laws of the Club. Please be advised in this connection that the Commission always adheres to the hands-off policy in the interpretation and application of the provisions of corporate by-laws as they are internal matters that should first be resolved by the corporation itself. By-laws are the private laws of the corporation, hence, the provisions thereof must be construed and applied in accordance with the intent of its own framers. Thus, unless there is a formal complaint filed with the SEC questioning the interpretation/application made on the by-laws by the corporation, the Commission will not interfere. Very truly yours, (SGD.) DANILO L. CONCEPCION Associate Commissioner