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It is a
familiar doctrine that every express grant of power to a
corporation carries with it all the powers that may be
implied from or which are either incidental, necessary
or expedient to those expressly conferred, and that the
corporation may do whatever is necessary or expedient to
their exercise (SEC Opinion 11-02 citing Fletcher
Cyclopedia Corporations Volume 6 Sec. 2486).
XYZ
Corp. is a company, which was granted a legislative
franchise to operate as a telecommunications system in
the Philippines in accordance with the authority under
its franchise. As part of its expansion programs, XYZ
intends to sell phone units and accessories to the
public. Is this contemplated by the powers granted to
the corporation? The proposed sale and distribution by
ABC of said units and accessories to the public is held
to be within its corporate powers because it is
obviously reasonable that to sell the devices and to
operate the system are closely interrelated.
In a
similar instance, the commission has previously opined
that such activity may be treated as reasonable and
necessary activities to be engaged in by a
telecommunications operator considering that by
providing the necessary equipment, the conveyance of
communication is thus assured and the availment by the
subscribers or clients of the communication services
offered by the firm is thus enhanced (SEC Opinion May
31, 2001, Attorneys. Nisce and Guinto).
XYZ’s
proposed sale and distribution of phone units and
related devices or accessories may likewise be
considered as within the exercise of its implied powers.
The
exercise by corporations of implied powers is expressly
recognized under paragraphs 7 and 11 of Section 36 of
the Corporation Code, which provides that every
corporation incorporated has the power and capacity to
purchase, receive, take or grant, hold, convey, sell,
lease, pledge, mortgage and otherwise deal with such
real and personal property, including securities and
bonds of other corporations, as the transaction of the
lawful business of the corporation may be reasonably and
necessarily require, subject to the limitations
prescribed by law and the Constitution and to exercise
such other powers as may be essential or necessary to
carry out its purpose or purposes as stated in its
articles of incorporation.
The term
implied power of the corporation has been defined as one
which the law will regard as existing by implication.
Such power must be one in a sense necessary; that is
needful, suitable and proper to accomplish the object of
the grant that is, one that is directly and immediately
appropriate for the execution of the specific powers;
and not one that has slight, indirect or remote relation
to the specific purpose granted (Rosario Lopez, The
Corporation Code of the Philippines, Volume I, pp.
518-519, citing Ballantine Law Dictionary, p. 614; also
cited in SEC Opinion dated May 31, 2001).
The test
to be applied is whether the act in question is in
direct and immediate furtherance of the corporation’s
business fairly incident to the express powers and
reasonably necessary to their existence (SEC Opinion,
May 31, 2001).
The sale
of phone units and accessories to the public may be
treated as reasonable and necessary to its primary
business of operating a telecommunication system
including among others, the transmission of voice and
messaging considering that by providing the
cellular-phone units and related devices or accessories,
the provision of telecommunications services is actually
carried out and the availment by the subscribing public
of such telecommunications services is actually
realized. It is therefore directly and immediately
appropriate for the pursuit of its primary purpose. |
