Mr. Jose Ngaw

March 13, 2003 SEC OPINION NO. 06-03 Mr. Jose Ngaw Federation of Filipino-Chinese Chamber of Commerce and Industry 6th Flr., Federation Center Building Muelle de Binondo Street Manila, Philippines S i r : This refers to your letter dated October 7, 2002 requesting opinion whether Mr. John K.C. Ng who was elected President by the Board of Directors of FCCI to serve the unexpired term of his deceased predecessor, is qualified to seek reelection this March. The facts you presented are as follows: FCCI's Board of Directors elected Mr. Ng as President in a special board meeting to fill up the vacancy left by the demise of Mr. Benjamin G. Chua, Jr. who was elected in 2001. Mr. Ng thus continues to serve the unexpired term of eleven (11) months, which ends March 2003. Article IX paragraph 2 of the Amended By-laws of the Federation of Filipino-Chinese Chamber of Commerce (FCCI) reads: "2. Election and Appointment All officers, . . . shall be elected by a majority vote of the Board of Directors . . . and shall hold office for a term of two (2) years and until the election and qualification of their successors. All officers may be re-elected, provided, however, that no person shall serve as President for more than one (1) term (or more than two consecutive years ) . . ." (Emphasis Ours) The phrase "for more than one (1) term (or more than two consecutive years)" in the above-quoted provision should be given a single meaning. It should be noted that the phrases are joined by the conjunctive "or" implying that the latter phrase is a mere qualifying description of the period comprising a term. To disqualify a candidate for FCCI's presidency, a completed term of two years must have been served by the incumbent. Mr. Ng simply served his predecessor's unexpired term of eleven (11) months. The following SEC opinion is applicable to instant query: The word "term" in a legal sense means the fixed and definite period of time, which the law describes that an officer may hold office and a hold over does not change the length of the term but results in shortening the period served by his successor . (Levin v . Hunter, 6 111 App 2d 461, 128 NE 2nd 630, cited in 2 Fletcher sec . 344) . Being a fixed period, it cannot be split into two or more terms so as to consider the remaining period as another term . Thus, we opine that for purposes of above prohibition in the by-laws of subject Corporation, the consecutive term referred therein should be applied only a director who was elected in the regular election for 1991-93 and was previously elected in the immediately preceding regular election and not to a trustee who merely serves the remaining period of the original term of the resigned director, unless it can be clearly established that the intention of the prohibition is to cover such a situation . (Ltr to Mr . Pishoo B . Mahibubani dated February 8, 1993) . As aptly put in the quoted opinion, the prohibition on the consecutive terms of years shall be applicable only to a director who was elected in a regular election and not to a trustee who merely serves the remaining period of the original term of the resigned director. In the instant case, Mr. Ng was not elected in a regular election but only in a special board meeting and he likewise served the remaining period of the original term of the demised president. Moreover, it has been said that the term, being a fixed period is not divisible. caAICE We, therefore, hold the view that Mr. Ng is qualified to run for re-election. Very truly yours, (SGD.) VERNETTE G. UMALI-PACO General Counsel