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    #148 Ayala vs. ASB Corp

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    Harry Dave Ocampo Pagaoa
    The doctrine of apparent authority does not apply in this case. While EMRASON authorized the Ramos children to negotiate terms for a potential sale of property to ALI, it did not authorize them to enter into a final contract of sale. Acts of corporate officers beyond the scope of their authority cannot bind the corporation unless those acts are expressly ratified or the corporation is estopped from denying them. ALI failed to show any acts by the Ramos children that would indicate they had implied authority to sell the property based on EMRASON's habits, customs, or acquiescence. As an experienced business entity, ALI should have known that a corporation acts through its board of directors, not just its controlling shareholders.

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    #148 Ayala vs. ASB Corp

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    Harry Dave Ocampo Pagaoa
    297 views2 pages
    The doctrine of apparent authority does not apply in this case. While EMRASON authorized the Ramos children to negotiate terms for a potential sale of property to ALI, it did not authorize them to enter into a final contract of sale. Acts of corporate officers beyond the scope of their authority cannot bind the corporation unless those acts are expressly ratified or the corporation is estopped from denying them. ALI failed to show any acts by the Ramos children that would indicate they had implied authority to sell the property based on EMRASON's habits, customs, or acquiescence. As an experienced business entity, ALI should have known that a corporation acts through its board of directors, not just its controlling shareholders.

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    The doctrine of apparent authority does not apply in this case. While EMRASON authorized the Ramos children to negotiate terms for a potential sale of property to ALI, it did not authorize them to enter into a final contract of sale. Acts of corporate officers beyond the scope of their authority cannot bind the corporation unless those acts are expressly ratified or the corporation is estopped from denying them. ALI failed to show any acts by the Ramos children that would indicate they had implied authority to sell the property based on EMRASON's habits, customs, or acquiescence. As an experienced business entity, ALI should have known that a corporation acts through its board of directors, not just its controlling shareholders.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    297 views2 pages

    #148 Ayala vs. ASB Corp

    Uploaded by

    Harry Dave Ocampo Pagaoa
    The doctrine of apparent authority does not apply in this case. While EMRASON authorized the Ramos children to negotiate terms for a potential sale of property to ALI, it did not authorize them to enter into a final contract of sale. Acts of corporate officers beyond the scope of their authority cannot bind the corporation unless those acts are expressly ratified or the corporation is estopped from denying them. ALI failed to show any acts by the Ramos children that would indicate they had implied authority to sell the property based on EMRASON's habits, customs, or acquiescence. As an experienced business entity, ALI should have known that a corporation acts through its board of directors, not just its controlling shareholders.

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    © All Rights Reserved
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    Doctrine:  The doctrine of apparent authority is a species of the doctrine of estoppel.

    Article
    1431 of the Civil Code provides that through estoppel, an admission or representation is rendered
    conclusive upon the person making it, and cannot be denied or disproved as against the person
    relying thereon. Estoppel rests on this rule: Whenever a party has, by his own declaration, act, or
    omission, intentionally and deliberately led another to believe a particular thing true, and to act
    upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be
    permitted to falsify it.

    AYALA LAND, INC. v. ASB REALTY CORPORATION AND E.M. RAMOS & SONS,
    INC.
    G.R. No. 210043, September 26, 2018
    FIRST DIVISION, DEL CASTILLO, J.:

    FACTS:

    ALI claimed that EMRASON's brokers sent a proposal for a joint venture agreement
    (JVA) between ALI and EMRASON for the development of EMRASON's Dasmariñas Property.
    According to ALI, EMRASON made it appear that Ramos, Jr., Antonio, and Januario had full
    authority to act on EMRASON's behalf in relation to the JVA. ALI alleged that Emerita Ramos,
    Sr. (Ramos, Sr.), then EMRASON's President and Chairman, wrote to ALI and therein
    acknowledged that Ramos, Jr. and Antonio were fully authorized to represent EMRASON in the
    JVA, as shown in Ramos, Sr.'s letter. ALI and the Ramos children subsequently entered into a
    Contract to Sell. ALI alleged that it came to know that a Letter-Agreement and a Real Estate
    Mortgage respecting the Dasmariñas Property had been executed by Ramos, Sr. and Antonio for
    and in behalf of EMRASON, on one hand, and ASBRC on the other. Respondents averred that
    ALI submitted to EMRASON and Ramos, Sr. its proposal to purchase the Dasmariñas Property
    which proposal was however rejected. EMRASON, through Ramos, Sr., informed ALI that it
    had decided to accept the proposal of ASBRC because the latter's terms were more beneficial
    and advantageous to EMRASON. As a result, ASBRC and EMRASON entered into a Letter-
    Agreement. The following day, EMRASON executed a Real Estate Mortgage in compliance
    with its obligations under the said Letter-Agreement. Prior to the execution of the Letter-
    Agreement, a special stockholders' meeting was held during which EMRASON's stockholders
    authorized, approved, confirmed and ratified the Resolution of EMRASON's Board of Directors.
    The Board Resolution, which approved the Letter-Agreement and authorized Ramos, Sr. and
    Antonio to sign the same, was in tum likewise approved by EMRASON’s stockholders on the
    same date. After ASBRC learned about the Contract to Sell executed between ALI and the
    Ramos children and the annotation of the Contract to Sell on the transfer certificates of title
    (TCTs) covering the Dasmariñas Property,  ASBRC and EMRASON filed a Complaint for the
    nullification of Contract to sell and the cancellation of the annotations on the TCTs over the
    Dasmariñas Property.

    ISSUE:
    Will the doctrine of apparent authority apply in this case?

    HELD:

    No.
    Under the doctrine of apparent authority, the question in every case is whether the
    principal has by his/her voluntary act placed the agent in such a situation that a person of
    ordinary prudence, conversant with business usages and the nature of the particular business, is
    justified in presuming that such agent has authority to perform the particular act in question.

    A perusal of the shows that EMRASON, through Ramos, Sr. authorized Ramos, Jr. and
    Antonio merely to "collaborate and continue negotiating and discussing with [ALI] terms and
    conditions  that are mutually beneficial" to the parties therein. Nothing more, nothing less. To
    construe the letter as a virtual carte blanche for the Ramos children to enter into a Contract to
    Sell regarding the Dasmariñas Property would be unduly stretching one's imagination. Acts done
    by the corporate officers beyond the scope of their authority cannot bind the corporation unless it
    has ratified such acts expressly or is estopped from denying them. What is clear from the letter is
    that EMRASON authorized the Ramos children only to negotiate the terms of a potential sale
    over the Dasmariñas Property, and not to sell the property in an absolute way or act as
    signatories in the contract.

    The authority of the apparent agents may be "expressly or impliedly [shown] by habit,
    custom or acquiescence in the general course of business." For, indeed, ALI never mentioned or
    pointed to certain palpable acts by the Ramos children which were indicative of a habit, custom,
    or acquiescence in the general course of business that compel the conclusion that EMRASON
    must be deemed to have been bound thereby implacably and irretrievably. ALI's bare allegation
    that "the Ramos children submitted corporate documents to ALI to convince it that it was
    negotiating with the controlling shareholders of EMRASON" is gratuitous and self-serving,
    hence, does not merit this Court's consideration. As an established business entity engaged in real
    estate, ALI should know that a corporation acts through its Board of Directors and not through
    its controlling shareholders.

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