Atty. Fe Becina-Macalino

April 11, 1988 Atty. Fe Becina-Macalino 12th Floor, Ramon Magsaysay Center Roxas Boulevard, Manila Madam : This has reference to your letter dated March 28, 1988 requesting the opinion of this Commission on the following queries: LibLex 1. Who votes upon the shares of a deceased stockholder pending settlement of his estate and appointment of an administrator or executor? If a corporation has allowed that the stocks of said estate are being voted upon by the representative of the majority heirs pursuant to a General Power of Attorney is the corporation estopped from questioning his legal personality? (Note: Representative is not duly appointed by the court). 2. What is the effect of a non-registration of a voting trust with the SEC considering the provisions of Sec. 59 of the Corporation Code? How valid is the agreement executed by and between the Trustor and the Trustee? Relative to your query no. 1, please be informed that Sec. 55 of the Corporation Code provides, and we quote: "SECTION 55. Right to vote of pledgers, mortgagors, and administrators . ... Executors, administrators, receivers and other legal representatives duly appointed by the court may attend and vote in behalf of the stockholders or members without need of any written proxy." "Sec. 55 authorizes executors, administrators and receivers to vote stocks held by them as such persons in a position of trust and legally authorized to vote as stockholders held in their representative capacity. When they are able to establish their appointment they may vote even though they do not cause a change in the corporate records." (Emphasis supplied) (Agbayani, Commentaries and Jurisprudence on the Commercial laws of the Phil.,p. 514). "One who votes the shares of corporate stock belonging to an estate must prove his appointment as representative, when challenged, by producing certified copies of the letters of appointment".(38 Idaho 736, 225 p. 796 cited in 7 ALR 3d). From the above, it is clear that only executors, administrators and legal representatives who are appointed by the court can vote on the shares in the name of the decedent. Anent your question as to whether or not the corporation is estopped from questioning the legal representatives of the majority heirs pursuant to a general power of attorney the following is appropriate: "In Marks V. Financial News, Ltd. (1919, Eng.) 35 Times L 681, articles of a company providing inter alia, that executors, or administrators of a deceased member should be the only persons recognized by the company as having any title to the shares registered in the name of such member ,that one becoming entitled to shares in consequence of the death of a member might, on certain conditions, transfer the same, and that any person entitled to transfer shares might vote the same as if he was the registered holder, were said to have the general object to put as executor of a deceased stockholder, as regards voting, as far as possible in the same position as shareholder registered in his own name. ... It is intimated however, that the directors might again require the executor to show his right to vote ." (Emphasis applied; 7 ALR 3 d, pp. 642-643). Relative thereto, any considering the above, it is believed that the corporation is not estopped from questioning the legal personality of the representative of the majority heirs pursuant to a general power of attorney especially since in this instance the said representative is not appointed by the court. Anent your query no. 2, Sec. 59 provides, and we quote: "SECTION 59. Voting Trust . One or more stockholders of a stock corporation may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote and other rights pertaining to the shares for a period not exceeding five (5) years at any one time: Provided, that in the case of a voting trust specifically required as a condition in a loan agreement said voting trust may be for a period exceeding five (5) years but shall automatically expire upon full payment of the loan. A voting trust agreement must be in writing and notarized, and shall specify the terms and conditions thereof. A certified copy of such agreement shall be filed with the corporation and with the Securities and Exchange Commission, otherwise, said agreement is ineffective and unenforceable . xxx xxx xxx." Considering the above, the non-registration of a voting trust agreement with the SEC invalidates the same. LexLib Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman