Mr. Armando C. Trinidad

September 4, 1989 Mr. Armando C. Trinidad Fortune Life & General Insurance Co.,Inc. Fortune Life Building, 162 Legaspi Street Legaspi Village, Makati, Metro Manila Sir : This refers to your letter dated August 28, 1989, seeking interpretation of Article VI of the articles of incorporation and Sec. 2, paragraph 2 of Article IV of the By-laws of Philippine Life Insurance Association, Inc.,quoted hereunder: cdll Articles of Incorporation (Article VI) "a. For purposes of electing Directors, the Association members shall be divided into three (3) groups based on the volume of each company's legal reserves as of the latest published report of the Insurance Commission, and each group shall nominate, by plurality vote among themselves, the number of directors they are entitled to nominate and the nominated directors shall be elected at large by all the members of the association . By-laws (Article IV Sec. 2) "For the purposes of constituting the Board, the Association members shall be divided into three (3) groups based on the volume of each company's legal reserves as of the latest published report of the Insurance Commission, and each group shall nominate by plurality vote among themselves, the number of directors they are entitled to nominate and the nominated directors shall be elected at large by all the members of the association . The pertinent provisions of the Corporation Code provide, to wit: "SECTION 23. The Board of Directors or trustees . Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and held by the board of directors or trustees to be elected from among the holders of stocks or where there is no stock, from among the members of the corporation who shall hold office for one (1) year and until their successors are elected and qualified." ...(emphasis supplied) "SECTION 24. Election of directors or trustees . At all election of directors or trustees, there must be present either in person or by representative authorized to act by written proxy ,the owners of the majority of the outstanding capital stock or if there be no capital stock, a majority of the members entitled to vote. ....Unless otherwise provided in the articles of incorporation or in the by-laws, members of corporations which have no capital stock may cast as many votes as there are trustees to be elected but may not cast more than one vote for one candidate." ...(emphasis supplied). It is clear from the aforecited provisions of the Corporation Code that the manner of choosing the members of the Board is by election and such authority to elect is vested in the members of the association . It is well-settled that the by-laws should be construed and given effect in accordance with the Corporation Code. Thus, in line with the said provisions of the Code, each group as enumerated in the by-laws, is entitled to nominate as many qualified members coming from the same group but the nominated members shall be elected not by the group itself but by the entire members of the association. llcd Please be advised accordingly. Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner