Mr. Cesar M. Junio

October 6, 1994 Mr. Cesar M. Junio Luzon Colleges Perez Boulevard, Dagupan City S i r : This refers to your letter of September 28, 1994 requesting opinion on the legality of your proposal to remove a member of the board of directors of Luzon Colleges, Inc. for acts of disloyalty and/or conflict of interest on the basis of the facts stated in your letter to the Chairman of the Board of Trustees of said corporation. llcd Please be advised that the Commission does not, as a matter of settled policy, render opinion on queries or transactions based on allegations involving justiciable issues which may eventually be litigated in the future or which could only be clarified and determined in a proper proceeding, such as those presented in your letter. The opinion which may be rendered thereon would not be binding upon private parties who would in all probability if the opinion happens to be adverse to their interest, take issue therewith and contest it before the proper forum. The Commission, therefore, has to refrain from giving a categorical answer to the query raised in your letter so that it will not be estopped to resolve any controversy pertaining thereto if brought before it in a proper proceeding. However, for purposes of information only, the following are imparted. The pertinent provision of the Corporation Code: "SECTION 28. Removal of directors or trustees . Any director or trustee of a corporation may be removed from office by a vote of the stockholders holding or representing two-thirds (2/3) of the outstanding capital stock ,or if the corporation be a non-stock corporation, by a vote of two-thirds (2/3) of the members entitled to vote: Provided, That such removal shall take place either at a regular meeting of the corporation or special meeting called for the purpose ,and in either case, after previous notice to the stockholders or members of the corporation of the intention to propose such removal at the meeting. A special meeting of the stockholders or members of the corporation for the purpose of removal of directors or trustees, or any of them, must be called by the secretary on order of the president or on the written demand of the stockholders representing or holding at least a majority of the outstanding capital stock, or if it be a non-stock corporation, on the written demand of a majority of the members entitled to vote. Should the secretary fail or refuse to call the special meeting upon such demand or fail or refuse to give the notice, or if there is no secretary, the call for the meeting may be addressed directly to the stockholders or members by any stockholder or member of the corporation signing the demand. Notice of the time and place of such meeting, as well as of the intention to propose such removal, must be given by publication or by written notice as prescribed by this Code. The vacancy resulting from removal pursuant to this section may be filled by election at the same meeting without further notice, or at any regular or at any special meeting called for the purpose, after giving notice as prescribed in this Code. Removal may be with or without cause : Provided, That removal without cause may not be used to deprive minority stockholders or members of the right of representation to which they may be entitled under Section 24 of this Code." (Emphasis supplied) Thus, a member of the Board can be removed from office by following the procedure above set forth. It also appears from the above provision that the removal may be with or without cause and irrespective of the tenure of office. However, it has to be emphasized that in case of disqualification by operation of law, there is no need to follow the above procedure. A mere declaration of such disqualification is sufficient to remove him from office. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner