DOJ OPINION NO. 049 , s.

1978
April 4, 1978

The President
Central Luzon State University
Munoz, Nueva Ecija

Sir :
This is in reply to your request for opinion as to "whether Resolution No. 1733 of
the Board of Regents of Central Luzon State University (CLSU) is . . . repugnant to or
violative of R.A. No. 4067, otherwise known as the Charter of this /that/ University".
The said Resolution reads:
"Granting authority to the President of the University to lease about 2,500 to 5,000
square meters of the University Reservation along the Cagayan Valley Road to
any reputable firm or person willing to put up a motel or hotel, including
recreational facilities, for a period of twenty-five (25) years at a monthly rental, the
amount of which is to be determined later; provided, such lease is not in violation
of the Charter of the University, otherwise referred to as Republic Act No. 4067;
and provided further that the terms and conditions of the lease shall be presented
to the board later."LexLib

You state that with the growth of the University and its coming to the limelight of
public attention, visitors from government agencies and the private sectors come to
CLSU to see its various innovative agricultural projects. Because of this,
accommodation becomes quite a problem especially when visitors stay for a couple of
days or more, and it seems practical and economical for the University, with its
budgetary limitations, to encourage private capital to put up a motel or inn where
visitors can stay at a reasonable charge. You state further that recreational facilities
such as bowling alleys, billiard and pool tables, tennis, pelota courts and others could at
the same time be put up to serve your students and staff.
The following provisions of the University Charter are pertinent:
"SEC. 2. The university shall primarily give professional and technical training
in agriculture and mechanic arts besides providing advanced instruction and
promoting research in literature, philosophy, the sciences, technology and arts.

"xxx xxx xxx

"SEC. 6. The Central Luzon State University shall have the general powers set
out in Section thirteen of Act Numbered Fourteen hundred and fifty-nine as
amended, and the administration of the university and the exercise of its
corporate powers are hereby vested exclusively in the Board of Regents, and in the
President of the University in so far as authorized by the board."

And Section 13 of the Corporation Law provides that:

"Every corporation has the power"
"xxx xxx xxx
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 "(5) To purchase, hold, convery, sell, lease , let, mortgage, encumber, and
otherwise deal with such real and personal property as the purposes for which the
corporation was formed may permit, and the transaction of the lawful business of
the corporation may reasonably and necessarily require."

It is a familiar doctrine that a corporation has only such powers as are expressly
granted, or are impliedly granted as reasonably incident and necessary to the carrying
out of the express powers. It is noted further that the corporate power to deal with real
property above-described, is limited to those purposes for which the corporation was
formed, or the transaction of its corporate business may reasonably and necessarily
require. prcd

Judged by this rule, the construction of a motel or hotel to provide lodging and
recreation facilities to the travelling public in general cannot, to my mind, be justi ed as
within the scope of the powers conferred upon the CLSU by its charter, as the purpose
of the lease does not legitimately tend to effectuate its educational purposes. Though
the proposed lease of university property may be of some bene t to the university, the
plan might be deemed too remote from its general purposes to be reasonably within its
implied powers.
On the other hand, is a motel or hotel were to be constructed on the grounds of
the CLSU and the same were to be devoted primarily for the temporary
accommodation of the alumni and of the university visitors and not for general
patronage — the proposed lease of land of the university may be justi ed as reasonably
incident and necessary for carrying out its purposes. For a university can be said to be
morally on socially bound to provide necessary accommodations for its visitors and
alumni where these are unavailable elsewhere; and practical considerations dictate that
such accommodations be situated in the university's grounds.
Upon the understanding that the hotel or motel to be constructed within the
grounds of the CLSU will be for the primary use of its alumni and visitors and that the
lands to be leased will be devoted solely to the providing of lodging and meals and
other necessities for said alumni and visitors, and not for any commercial purpose,
which would be alien to the educational purposes of the University, I am of the opinion
that the proposed lease of a portion of CLSU land would not be legally objectionable. cda

You may therefore reword subject Resolution accordingly.

Very truly yours,

(SGD.) VICENTE ABAD SANTOS

Secretary of Justice

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