Estanislao L. Cesa, Jr.

April 14, 1981 Estanislao L. Cesa, Jr. Attorney-at-Law 3rd Floor, 2242 Rizal Avenue E. B. B. Olongapo City Sir : This has reference to your letter dated 29 January 1981 requesting the opinion of this Commission regarding the deadlock in the election of the directors of Progress Savings and Loan Association, Inc. The queries posed therein are answered hereunder in the order they are presented. a) In the absence of pertinent provision on the by-laws regarding resolution of deadlock in corporate election, it is common practice to decide tie votes by drawing of lots among the candidates concerned. b) In the event the three candidates involved do not agree on drawing of lots, the stockholders may vote again and elect among them the remaining two members of the board of directors. This matter should not be left for decision to the old board of directors or to the newly elected directors. Fletcher has this to say: "In the case of a business corporation, the directors are usually elected or appointed by the stockholders at a duly and properly called meeting for that purpose, in the absence of charter or statutory provisions to the contrary." (2 Fletcher 285) c) Pending resolution of the deadlock, it is proper for the elected directors to convene and organize and elect the officers of the corporation, provided that the statutory provision on vote requirements will be complied with Section 25 of the Corporation Code of the Philippines expressly provides that for the election of officers, "the vote of a majority of the members of the board" must be necessary. Thus, the vote of six directors must be necessary to elect each officer of the corporation. llcd Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department