Mrs. Lourdes N. Lustre

February 15, 1995 Mrs. Lourdes N. Lustre Assumption College Sapang Palay, Bulacan Madam : This refers to your letter of January 31, 1995 requesting opinion on the alleged gratuitous donation of all the properties and school building of Assumption Sapang Palay College, Inc. Please be advised that the Commission does not as matter of settled policy render opinions 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, take issue therewith and contest it before the proper forum. The Commission, therefore, has to refrain from giving categorical answer to your query so that it will not be estopped to resolve any controversy pertaining thereof, if brought before it in a proper proceeding. However, for purposes of information only, the following provisions of the Corporation Code which may be pertinent to your queries are imparted: "SECTION 40. Sale or other disposition of assets . Subject to the provision of existing law on illegal combinations and monopolies a corporation may by a majority vote of its board of directors or trustees sell, lease exchange, mortgage pledge or otherwise dispose of all or substantially all of its property and assets ,including its goodwill, upon such terms and conditions and for such consideration, which may be money stock, bonds or other instruments for the payment of money or other property or consideration, as its board of directors or trustees may deem expedient, when authorized by the vote of the stockholders representing at least two-third(2/3) of the outstanding capital stock; or in case of non-stock corporation ,by the vote of at least two-third (2/3) of the members ,in a stockholders' or members' meeting duly called for the purpose . Written notice of the proposed action and of the time and place of the meeting shall be addressed to each stockholder or member at his place of residence as shown on the books of the corporation and deposited to the addressee in the post office with postage prepaid, or served personally: Provided, that any dissenting stockholder may exercise his appraisal right under the conditions provided in this Code. A sale or other disposition shall be deemed to cover substantially all the corporate property and assets if thereby the corporation would be rendered incapable of continuing the business or accomplishing the purpose for which it was incorporated. After such authorization or approval by the stockholders or members, the board of directors or trustees may, nevertheless, in its discretion abandon such sale, lease, exchange, mortgage, pledge or other disposition of property and assets subject to the right of third parties under any contract relating thereto, without further action or approval by the stockholder or members. Nothing in this section is intended to restrict the power of any corporation, without the authorization by the stockholders or members, to sell, lease, exchange, mortgage, pledge or otherwise dispose of any of its property and assets if the same is necessary in the usual and regular course of business of said corporation or if the proceeds of the sale or other disposition of such property and assets be appropriated for the conduct of the remaining business. In non-stock corporations where there are no members with voting rights, the vote of at least a majority of the trustees in office will be sufficient authorization for the corporation to enter into any transaction authorized by this section. (Emphasis supplied) Furthermore, since the Department of Education, Culture and Sports has the administrative supervision over educational institution you may seek further advise from that office. cdll Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner