This time I will discuss the right of members of a nonstock corporation to vote by proxy in a general membership meeting called for the purpose of amending the corporation’s bylaws. Hence, this query: Can proxies validly amend the bylaws of a nonstock corporation?

Section 58 of the Corporation Code provides that stockholders and members may vote in person or by proxy in all meetings of stockholders or members. Proxies shall be in writing, signed by the stockholder or member and filed before the scheduled meeting with the corporate secretary. Unless otherwise provided in the proxy, it shall be valid only for the meeting for which it was intended. No proxy shall be valid and effective for a period longer than five years at any one time. Also, the other relevant provision is Section 87 of the Corporation Code, which states that the provisions governing stock corporations, when pertinent, shall also be applicable to nonstock corporations, except as may be covered by specific provisions to the contrary.

One such provision specifically applying to nonstock corporations relative to proxy voting is Section 89 of the code, which states that the right of the members of any class or classes to vote may be limited, broadened or denied to the extent specified in the articles of incorporation or the bylaws. Unless so limited, broadened or denied, each member—regardless of class—shall be entitled to one vote.

The Securities and Exchange Commission (SEC)  has opined that under Section 89, the right of members to vote by proxy may be denied entirely by appropriate provisions in the articles of incorporation or bylaws of a nonstock corporation (SEC Opinion, September 24, 1994, SEC Quarterly Bulletin 20). If the law allows proxy voting to be denied in the articles of incorporation or bylaws of nonstock corporations, it follows that qualifications or limitations on the appointment of proxies may also be provided (Letter to Perpetuo Panerdated September 20, 1994, page 766). Thus, unless proxy voting is denied in the articles of incorporation or bylaws, a member of a nonstock corporation who cannot attend in person may appoint a proxy to represent him/her in the membership meeting. For all intents and purposes, a proxy holder is an agent of the member clothed with the authority to exercise the latter’s rights in the membership meeting as if the member was personally present (Letter to Maria Pelita Dotado-Viliran, dated August 4, 1998, page 910).

In statutory construction, basic is the rule that a statute must be read or construed as a whole or in its entirety—its parts, provisions or sections considered together and with respect to all the others—in harmony with the whole. This is a method of construction which aims to discover the meaning of a statute thru the comparison of its several parts with one another. Further, under the statutory construction rule Generalia specialibus non derogant, when there is in the same statute a specific provision, and also a general one which—in its most comprehensive sense—would include matters embraced in the former, the particular provision must control. The general provision must be taken to effect only such cases within its general language as are not within the provisions of the particular provision (Martin, Statutory Construction, page 148).

A perusal of the above-quoted provisions of the Corporation Code reveals that Section 58 is the general provision and Section 89 is the specific one as far as proxy voting is concerned. By mentioning that stockholders and members have the right to vote by proxy in all their meetings, Section 58 is applicable to both stock and nonstock corporations. Section 89, however, is considered a specific provision on proxy voting especially intended to apply to nonstock corporations, pursuant to Section 87 (SEC Opinion 12-05). Therefore Section 89 should hold sway when a conflict arises. So, in answer to the query at the beginning of this article, it is categorical that proxies can be validly voted in a meeting called for the amendment of the bylaws of a nonstock corporation.

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The Corporate Corner: Voting by proxy in a nonstock corporation

This time I will discuss the right of members of a nonstock corporation to vote by proxy in a general membership meeting called for the purpose of amending the corporation’s bylaws. Hence, this query: Can proxies validly amend the bylaws of a nonstock corporation?