Mr. Edelito E. Borja

December 27, 1993 Mr. Edelito E. Borja P.O. Box 81222 8000 Davao City S i r : This refers to your letter inquiring whether San Antonio Tribal Christian Mining Association, Inc. is legally authorized to apply, file, in the name of the association ,Small Scale Mining Permit or engage in Small Scale Mining. Section 87 of the Corporation Code defines a non-stock corporation as follows: "SECTION 87. Definition . For the purpose of this Code, a non-stock corporation is one where no part of its income is distributable as dividends to its members, trustees, or officers, subject to the provisions of this Code on dissolution: Provided, that any profit which a non-stock corporation may obtain as an incident to its operations shall, whenever necessary or proper to be used for the furtherance of the purpose or purposes for which the corporation was organized ,subject to the provisions of this title." (Emphasis supplied) The Corporation Code likewise provides: "SECTION 14. Contents of the articles of incorporation ... xxx xxx xxx (2) ...:Provided, That a non-stock, non-profit corporation may not include a purpose which would change or contradict its nature as such :(Emphasis supplied) Under the foregoing provisions, non-stock, non-profit corporations, as a general rule, are not empowered to venture on economic business activities . As incident to its purpose(s), it may engage only in such business activities which are reasonably necessary to carry out the purpose(s) for which the corporation was organized. Any such powers which are reasonably necessary to enable corporations to carry out the express powers granted and the purposes of the creation are to be implied as are to be deemed incidental. (SEC Opinion dated February 18, 1993, addressed to Erlinda B. Ahoro, citing previous SEC opinion and AM. Jur., sec 740) However, activities merely convenient or useful are not implied, if they are not essential, having in view the nature and object of incorporation .(Ibid, citing Planters Bank v. Sharp, 6 How (VS) 301, 121, ED. 447). A perusal of the articles of incorporation of subject corporation disclosed that it is a non-stock corporation. Hence, it cannot engage in mining activities .Its purpose under its articles of incorporation is merely to assist its members to engage, apply for, own or operate mining claims. In view thereof, we answer your query in the negative. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman