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Corporation Law Case Commercial Law Review Atty. Serge Ceniζa

1) The case involves a dispute over whether a quorum was present at the annual members meeting of the non-stock, non-profit Grace Christian High School corporation. There were originally 15 member-trustees, but 4 had died, leaving 11 living members. Only 7 members attended the meeting through proxies. 2) The issue is whether the 4 deceased members should still be counted for purposes of determining if a quorum was present. The court ruled that only living members with voting rights should be counted for a quorum in a non-stock corporation. Therefore, with only 11 remaining members, the quorum requirement of 6 members was not met. 3) The court affirmed that membership and voting rights in a non

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36 views1 page

Corporation Law Case Commercial Law Review Atty. Serge Ceniζa

1) The case involves a dispute over whether a quorum was present at the annual members meeting of the non-stock, non-profit Grace Christian High School corporation. There were originally 15 member-trustees, but 4 had died, leaving 11 living members. Only 7 members attended the meeting through proxies. 2) The issue is whether the 4 deceased members should still be counted for purposes of determining if a quorum was present. The court ruled that only living members with voting rights should be counted for a quorum in a non-stock corporation. Therefore, with only 11 remaining members, the quorum requirement of 6 members was not met. 3) The court affirmed that membership and voting rights in a non

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Carl Cortes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CORPORATION LAW CASE COMMERCIAL LAW REVIEW ATTY.

SERGE CENIΖA
** QUORUM **

CASE 44 entitled to one vote unless so limited, broadened, or


denied in the articles of incorporation or bylaws. [40] We
PAUL LEE TAN,- versus -PAUL SYCIP and MERRITTOLIM, hold that when the principle for determining the
quorum for stock corporations is applied by analogy to
nonstock corporations, only those who
FACTS: PETITIONER Grace Christian High School (GCHS) are actual members with voting rights should be
is a nonstock, non-profit educational corporation with counted.
fifteen (15) regular members, who also constitute the
board of trustees. During the annual members meeting Under Section 52 of the Corporation Code, the majority
held on April 6, 1998, there were only eleven of the members representing the actual number of
(11) living member-trustees, as four (4) had already voting rights, not
died. Out of the eleven, seven (7). attended the meeting the number or numerical constant that may originally
through their respective proxies. The meeting was be specified in the articles of incorporation, constitutes
convened and chaired by Atty. Sabino Padilla Jr. over the the quorum.[41]
objection of Atty. Antonio C. Pacis, who argued that
there was no quorum. In the meeting, Petitioners
Ernesto Tanchi, Edwin Ngo, Virginia Khoo, and Judith Tan Effect of the Death
were voted to replace the four deceased member- of a Member or Shareholder
trustees.
On the other hand, membership in and all rights arising
When the controversy reached the Securities and from a nonstock corporation are personal and non-
Exchange Commission (SEC), petitioners maintained transferable, unless the articles of incorporation or the
that the deceased member-trustees should not be bylaws of the corporation provide otherwise.[45] In other
counted in the computation of the quorum because, words, the determination of whether or not dead
upon their death, members automatically lost all their members are entitled to exercise their voting rights
rights (including the right to vote) and interests in the (through their executor or administrator), depends on
corporation. those articles of incorporation or bylaws.
SEC Hearing Officer Malthie G. Militar declared Applying Section 91 to the present case, we hold that
the April 6, 1998 meeting null and void for lack of dead members who are dropped from the membership
quorum. She held that the basis for determining the roster in the manner and for the cause provided for in
quorum in a meeting of members should be their the By-Laws of GCHS are not to be counted in
number as specified in the articles of incorporation , not determining the requisite vote in corporate matters or
simply the number of living members. The SEC en banc the requisite quorum for the annual members
denied the appeal of petitioners and affirmed the meeting. With 11 remaining members, the quorum in
Decision of the hearing officer in toto. the present case should be 6. Therefore, there being a
quorum, the annual members meeting, conducted with
CA dismissed the appeal of petitioners, because the six[47] members present, was valid.
Verification and Certification of Non-Forum Shopping
had been signed only by Atty. Sabino Padilla Jr.No
Special Power of Attorney had been attached to show
his authority to sign for the rest of the petitioners.
ISSUE: Whether dead members should still be counted
in the determination of the quorum, for purposes of
conducting the annual members meeting.

RULING: Basis for Quorum, In nonstock corporations,


the voting rights attach to membership.[39] Members
vote as persons, in accordance with the law and the
bylaws of the corporation. Each member shall be

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