Philippine Nurses Association

May 15, 1986 Philippine Nurses Association 1663 F.T. Benitez St., Malate, Manila Attention : Mrs . Florida R . Martinez Madam: This refers to your, letter, dated May 7, 1986, requesting the opinion of this Commission on the following queries: 1. Legality of the "carry-over" of the 1985 budget since the said budget was not approved by the general membership last October 1985 during the Nurses' Week Convention. 2. The extent of independence of NOMELEC since your by-laws states that NOMELEC is an independent body. In relation thereto, please be informed that by-laws signifies the rules and regulations or private laws enacted by the corporation to regulate, govern and control its own actions, affairs and concerns, and its stockholders or members and directors and officers with relation thereto and among themselves in their relation to it. In other words, by-laws are the relatively permanent and continuing rules of action adopted by the corporation for its own government and that of the individuals composing it and having the direction, management and control of its affairs, in whole or in part, in the management and control of its affairs and activities. (8 Fletcher, Cyc. Corps., Revised and Permanent Edition, sec. 4166,-pp. 633-634.) In this connection, Section 34, Article V of your approved by-laws provides thus: "Turn over. Within 60 days after the election, the outgoing Board members shall turn over to the incoming Board members, all reports, monies, accounts, and other pertinent papers and properties of the Association, otherwise, legal proceedings shall be taken." Nowhere is it stated in your by-laws that your budget for the previous year needs the approval of your general membership before said budget may be turned over to the incoming Board of Governors. Hence, the carry-over of your 1985 budget appears legal as the same conforms to the provisions of your by-laws quoted above. Corollary to this, the board of directors, or a majority thereof, in drawing to themselves the powers of the corporation, occupies a position of trusteeship in relation to the stockholders/members in the sense that the board should exercise not only care and diligence, but utmost good faith in the management of corporate affairs. (Agbayani, Commercial Laws of the Philippines, Vol. 3, 1984 ed., p. 267, citing Legarda v. La Previsora, G.R. No. 44451, December 16, 1938, 6a Phil. 723) Anent your second query, the extent of independence of your NOMELEC is that as provided for in Article IX of your by-laws. The so called election laws adopted by the corporation as mere "rules" on motion and not by the procedure specified in the by-laws for adoption of a by-law, to meet a particular situation then existing, without any intention to legislate for similar future situations, partake of the nature of resolutions and are not operative as by-laws. (8 Fletcher, Op. cit, p. 636, citing Hornady v. Goodman, 167 Ga. 555, 146 S.E. 173). llcd Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Acting Chairman