Atty. Alejandrino A. Balbuena

February 12, 1980 Atty. Alejandrino A. Balbuena 6778 Ayala Avenue Makati, Metro-Manila Sir : This has reference to your letter dated January 15, 1980, seeking enlightenment on the following: "1. If the charter and By-Laws of a corporation provide that the number of directors is ten, may five (5) directors constitute a quorum at directors' meeting taking into account that of the ten elected directors two already died and whose vacated positions were unfilled? 2. May stockholders hold special meeting at a place other than the principal office of the corporation or outside the city or municipality where the said principal office is located? Example: Principal office is located in Angeles City. May the stockholders hold stockholders' meeting in Manila? 3. May directors whose term of office already expired hold a combined meeting with stockholders for the purpose of electing new set of officers without first electing new directors?" Your first query is answered in the negative. "The requisite quorum is a majority of the entire board, as it would be constituted if all the vacancies were filled, and not a majority of the board as it remains with the vacancies unfilled" (19 CJS, sec. 749 subd. b, p. 94; Fletcher, Cyclopedia Corporations, Vol. 2, sec. 421; Currie V. Matson, 33 F Supp. 454). With regard to your second query, it is believed that stockholders may hold special meeting at a place other than the principal office of the corporation or outside the city or municipality where the principal office of the corporation is established or located provided the acts done and the proceedings had in the said meeting are within the powers of the corporation and that all the stockholders are present or represented at the meeting in the light of the provision of Section 25 of the Corporation Law, as amended, which reads as follows: "The proceedings had and the business transacted at any meeting of the stockholders or members of a corporation, if within the powers of the corporation, shall be valid even if the meeting be improperly held or called; Provided ,That all the stockholders or members of the corporation are present or represented at the meeting. At any such meeting, the stockholders or members of the corporation may elect directors and fill vacancies then existing, and may transact such other business of the corporation as might lawfully be transacted at a regular meeting thereof." (Emphasis Supplied) See also Fisher, the Philippine Law of Stock Corporations, par. 129. As regards the third query, quoted hereunder are Sections 29 and 33 of the Corporation Law, as amended: "SECTION 29. At the meeting for the adoption of the original by-laws, or at such subsequent meeting as may then be determined, directors shall be elected to held their office for one year and until their successors are elected and qualified. Thereafter, the directors of the corporation shall be elected annually by the stockholders ..." "SECTION 33. Immediately after their election, the directors of a corporation must organize by the election of a president, who must be one of their members, a secretary or clerk ...and such other officers as may be provided for in the by-laws. ..." In view of the aforequoted provisions, it is believed that the election of directors should precede the election of officers and with more reason when the term of office of the directors had already expired. Very truly yours, For the Chairman: (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department