Philippine Institute of Civil Engineers, Inc.

September 16, 1983 Philippine Institute of Civil Engineers, Inc. 395 Quezon Avenue, Quezon City Attention : Mr . Ramon G . Hechanova Chairman, Committee on Nominations and Elections Sir : This has reference to your letter dated August 24, 1983, requesting for the opinion of this Commission the queries posed therein. It appears therein that the Philippine Institute of Civil Engineers, Inc. (PICE),a non-stock, non-profit professional organization, shall be holding its annual meeting and election. Its Nomination and Election Committee has issued the Rules Governing the Conduct of Nominations and Elections, two of which are quoted hereunder: "1. A maximum of fifteen (15) candidates may be voted on each ballot. Any ballot with more and less than 5 names therein will be invalidated. 5. A member who cannot personally cast his own ballot should properly accomplish the proxy form printed outside the ballot envelope and the proxy must have this validated before casting. However, in case of chapter member, a ballot not authenticated on the proxy form by the President and Secretary of the Chapter concerned shall be authenticated by the main office staff. No member shall hold proxies for more than nine (9) other members ." You likewise allege that some members of the PICE Board of Directors observed that this is against the Corporation Law although your Committee feels that as a non-stock, non-profit professional organization, PICE cannot disenfranchise any member. What your committee is trying to correct is the practice of one member holding fifty and more proxies using such proxies to entice candidates on agreements. You now wish to secure the opinion of this Commission on the validity of the abovequoted rules. In a previous opinion, this Commission has held that "The manner and procedure to be followed in the election of officers and members of the board of directors of a corporation are usually embodied in the by-laws adopted by a majority of members thereof. This procedure, as thus embodied in the by-laws, shall govern the members in all their election proceedings, provided that the same is not contrary to the provisions of the Corporation Code. However, should such procedure contained in the by-laws prove inadequate, the applicable provision of the Corporation Code will have to be resorted to, in order to remedy the deficiency." ( Ltr. to Mr. Julio Pangilinan dtd. Oct. 23, 1978 ). Since the by-laws of the said corporation does not provide for a system of electing the directors, Sec. 24 of the Corporation Code should be applied. Said Sec. 24 is quoted hereunder: "SECTION 24. Election of directors or trustees . xxx xxx xxx Unless otherwise provided in the articles of incorporation or in the by-laws, members of corporations which have no capital stock, may cast as many votes as there are trustees to be elected but may not cast more than one vote for one candidate. xxx xxx xxx." Therefore, the voters may not cast more or less than one vote for each of the fifteen (15) candidates but may so choose whom they are only going to vote without invalidating their ballots. The law does not prohibit expressly or impliedly, voting for the candidates of their choice. To do so would result in the disenfranchisement of those who feel that not all of the candidates deserved to be voted. It is our opinion, therefore, that the first rule is contrary to sound corporate practice. As regards the second rule in question, please be informed that Section 47(4) of the Corporation Code of the Philippines, authorizes a corporation to provide in its by-laws, the form for proxies of stockholders or members. The law provides, thus: "SECTION 47. Contents of the by-laws . Subject to the provisions of the Constitution, this Code or other special law, and the articles of incorporation, a private corporation may provide in its by-laws for: xxx xxx xxx 4. The form for proxies of stockholders and members and the manner of voting them." xxx xxx xxx (Emphasis supplied) The by-laws of the corporation, therefore, would be controlling insofar as the execution of proxies is concerned. An examination of the by-laws of the Philippine Institute of Civil Engineers, Inc. reveals that the same does not contain any provision as to the mode of execution/securing proxies. Therefore, a proxy shall be perceived in relation to its compliance with the requirements of Sections 89 and 58 of the Corporation Code, quoted hereunder for your guidance: "SECTION 89. . . . 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. xxx xxx xxx "SECTION 58. Proxies . ...Proxies shall be in writing, signed by the stockholders or members and filed before the scheduled meeting with the corporate secretary." In view of the foregoing provisions, the requirement of previous validation and authentication of proxies should be dispensed with and the proxies should be accepted as long as these are executed in accordance with Section 58. In a previous opinion, this Commission has ruled that "There is a presumption of regularity in the execution of proxies. Hence, as a rule, they should be accepted if they have the appearance of prima facie authenticity in the absence of a timely and valid challenge and are signed as the names appear in the records." ( Ltr. to Mr. Jose Gelano dtd. Jan. 4, 1968 ) Likewise, the portion requiring that no member shall hold proxies for more than nine (9) other members would be tantamount to a qualification or limitation of the right of voting by proxy which is void since the appointment of proxy is purely person and an incident of ownership. Please be guided accordingly. Very truly yours, (SGD.) GONZALO T. SANTOS, JR. Associate Commissioner