This case has been cited 2 times or more.
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2016-01-11 |
LEONEN, J. |
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| There can be no apparent authority and the corporation cannot be estopped from denying the binding affect of an act when there is no evidence pointing to similar acts and other circumstances that can be interpreted as the corporation holding out a representative as having authority to contract on its behalf. In Advance Paper Corporation v. Arma Traders Corporation,[147] this court had the occasion to say: The doctrine of apparent authority does not apply if the principal did not commit any acts or conduct which a third party knew and relied upon in good faith as a result of the exercise of reasonable prudence. Moreover, the agent's acts or conduct must have produced a change of position to the third party's detriment.[148] (Citation omitted) | |||||
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2015-12-02 |
PERALTA, J. |
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| Lastly, the CA held that contracts entered into by a corporate officer or obligations assumed by such officer for and in behalf of the corporation are binding on said corporation, if such officer has acted within the scope of his authority, or even if such officer has exceeded the limits of his authority, the corporation still ratifies such contracts or obligations. The doctrine of apparent authority provides that a corporation will be estopped from denying the agent's authority if it knowingly permits one of its officers or any other agent to act within the scope of an apparent authority, and it holds him out to the public as possessing the power to do those acts.[16] Apparent authority is derived not merely from practice. Its existence may be ascertained through (1) the general manner in which the corporation holds out an officer or agent as having the power to act or, in other words, the apparent authority to act in general, with which it clothes him; or (2) the acquiescence in his acts of a particular nature, with actual or constructive knowledge thereof, whether within or beyond the scope of his ordinary powers. It requires presentation of evidence of similar acts executed either in its favor or in favor of other parties. It is not the quantity of similar acts which establishes apparent authority, but the vesting of a corporate officer with the power to bind the corporation.[17] The doctrine does not apply, however, if the principal did not commit any act or conduct which a third party knew and relied upon in good faith as a result of the exercise of reasonable prudence.[18] In the present case, the aforementioned circumstances are lacking and, indubitably, neither did PNCDC act in good faith. Also, it must be stressed that the board of directors, not the president, exercises corporate power.[19] While in the absence of a charter or bylaw provision to the contrary the president is presumed to have authority, the questioned act should still be within the domain of the general objectives of the company's business and within the scope of his or her usual duties.[20] Here, PRHTAI is an association of professional horse trainers in the Philippine horse racing industry organized as a non-stock corporation and it is committed to the uplifting of the economic condition of the working sector of the racing industry. It is not in its ordinary course of business to enter into housing projects, especially not in such scale and magnitude so massive as to amount to P101,150,000.00. | |||||