Mr. Oscar Tirona

June 9, 1993 Mr. Oscar Tirona Imus Rural Bank Imus, Cavite S i r : This refers to your letter dated May 21, 1993 requesting opinion on the following queries: LibLex 1. The By-laws of the Corporation provides that "the stock and transfer book shall be closed for twenty (20) days before the general election and before dividend declaration days." (a) Is there a need for a resolution of the Board of Directors stating the date of the closure of the Stock and Transfer Book? (b) In the event that the Board of Directors by resolution specifies the date of closure of the Stock and Transfer Book for less than the period of closure provided for in the By-laws, which shall prevail, the period of twenty (20) days prior to general election and dividend days as specified in the By-laws or the lesser period contained in the Board Resolution? (c) When the Stock and Transfer books are closed either by virtue of the provisions of the By laws as aforementioned or by resolution of the Board of Directors, is there a necessity of a Board Resolution to specify the date of the opening of the Stock Book for transfer or will the Stock and Transfer Book be opened automatically after the date of general election and/or dividend days without the necessity of a Board Resolution opening the Stock to record transfer of shares. 2. In the usual agenda of the regular meeting of the Board of Directors under the item of: "New Business", may the Board of Directors take up and deliberate legally on any matter within its competence and jurisdiction without said matter being calendared or listed in the agenda under the item of "New business" which is the usual and ordinary practice in the past of the Board of Directors in its regular meetings? Relative to your queries 1 (a) and 1 (c), it is well settled that by-laws are the private laws of the corporation. They are in effect written into the charter and in this sense, they become part of the fundamental law of the corporation, and the corporation, its directors, officers and stockholders or members are bound by and must comply with them. (SEC Opinion dated April 8, 1992 addressed to Noe S. Andaya citing 8 Fletcher, Sec. 4197) Accordingly, there is no need for Board Resolutions for their implementation. Anent query 1 (b), considering that the by-laws have substantially the same force and effect as the laws of the corporation and the persons within it, the Board cannot adopt any procedure or any matter different or inconsistent from that specifically provided for therein. Accordingly, a Board Resolution which is contrary to an express provision of the by-laws is considered void. ( SEC letter dated January 31, 1985 addressed to Dr. Arsenio Pascual ) Regarding your last query, the general rule is that where the law expressly requires notice of meeting of a particular transaction, no meeting can be validly held, unless the notice of such meeting specifies the corporate transaction to be resolved, except if all the stockholders/members are present or duly represented during the meeting and do not object. (SEC Opinion dated September 9, 1991 addressed to Mr. David R. Sinangote, Jr.) llcd Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman