Bito, Lozada, Ortega & Castillo

August 24, 1988 Bito, Lozada, Ortega & Castillo 140 Alfaro St.,Salcedo Village Makati, Metro Manila Sirs : This refers to your letter, dated August 9, 1988, requesting the opinion of this Commission on the query posed therein. prcd Section 6, Article 11 of the by-laws of Legaspi Towers 300, Inc. reads as follows: " Quorum . The presence of members constituting a majority of the total voting power and not delinquent in the payment of their dues and assessments, shall constitute a quorum and a majority vote of those present and voting shall constitute a valid corporate act, except in matters and/or cases where the Corporation Law or the Condominium Act requires the affirmative vote a greater number. A smaller number of votes insufficient to constitute a quorum may adjourn the meeting from time to time and may take up only social or ceremonial matters." Considering that under the company's by-laws, members who are delinquent in the payment of their dues cannot vote, you now request the confirmation of the Commission that the presence of only a majority of non-delinquent members, and not necessarily the entire voting power, would be sufficient to constitute a quorum at every meeting of the members, whether annual or special. In other words, the quorum at any meeting of the members is ascertained by the presence, in person or by proxy, of a majority of members who are not delinquent in the payment of their dues inasmuch as delinquent members are disqualified to vote. Section 52 of the Corporation Code provides that "Unless otherwise provided for in this Code or in the by-laws, a quorum shall consist of the stockholders representing a majority of the outstanding capital stock or majority of the members in case of non-stock corporations". In like manner, Section 47 of the Corporation Code provides that "Subject to the provisions of the Constitution, this Code, other special laws, and the articles of incorporation, a private corporation may provide in its by-laws for: . . . 3. The required quorum in meeting of stockholders and members and the manner of voting them." The by-laws of Legaspi Towers 300, Inc. stipulates that the quorum of its members for the transactions of the ordinary business of the corporation shall consist of a majority of the voting powers and which are not delinquent in the payment of their dues and assessments, and the decision of the majority of such quorum shall be valid as a corporate act. The above provision, however, will not hold true in those instances where the Corporation Code or applicable special law explicitly prescribes the proportion of stockholders or members necessary to resolve or carry out a particular corporate proposal. In such cases therefore, the quorum shall consist of such ratio of stockholders or members as may be declared by statutory provisions. It is a cardinal rule that a by-law providing what shall constitute a quorum is invalid if it is in conflict with the provisions of statute on the subject, and yields to the statute. (5 Fletcher, Cyc. Corp., sec. 2013). Thus, where the number necessary to constitute a quorum is prescribed by statute, a by-law requiring less than the proportion required by the particular legislation is subordinate to the statute. "By-laws cannot be used to defeat the provisions of statutes. (Fletcher, Supra). cdll Precisely, the Commission in a previous opinion ruled that since Sections 16 and 48 of the Corporation Code are express provisions requiring the votes of two-thirds (2/3), and majority of the members, to approve the amendments of articles and by-laws respectively, of a non-stock corporation, it is clear that such proportion of all the members (whether or not in good standing) and not only of the members entitled to vote on ordinary corporate matters are the ones required to carry out the particular proposals. In both cases, however, the majority vote of the board of directors/trustees is required. ( Letter to PICPA, dated Sept. 28, 1984 ). We trust that the foregoing enlightens you on the matter requested. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman