Rev. Roberto-Jose M. Livioco

March 14, 1994 Rev. Roberto-Jose M. Livioco Grace Bible Church 3041 Nagtahan Street San Miguel, Manila 2804 S i r : This refers to your letter of March 9, 1994 requesting opinion whether the "holdover principle" which is allowed under Sec. 23 of the Corporation Code applies also to trustees/directors/officers of non-stock corporations elected for 3 years with staggered expiration of terms taking into consideration that the provision of the Corporation Code pertinent to non-stock corporations is silent on the matter. While under the Corporation Code non-stock corporations are primarily governed by Title XI of the Corporation Code, Section 87 (par. 2) thereof provides that: "The provisions governing stock corporations, when pertinent, shall be applicable to non-stock corporations, except as may be covered by specific provisions of this Title." Inasmuch as there is no special provision relating to hold-over term of the directors of non-stock corporations in Title XI of the Corporation Code, the provision under Section 23 of Corporation Code allowing such situation to stock corporations shall also be applicable to non-stock corporations by virtue of the above-cited provision. Accordingly, in case of failure of a non-stock corporation to hold an election, the incumbent members of the Board whose term has already expired, may continue their functions in a holdover capacity until their successors are duly elected and qualified. It has to be emphasized, however, that a hold-over term is a situation that arises only when no successors are elected due to valid and justifiable reasons. As a general rule, the regular election of directors as fixed in the By-laws cannot be postponed or dispensed with by the Board or Officers in order to extend their term of office. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman