G.R. No. 115849 – 322 Phil. 280 – 252 SCRA 259 – Mercantile Law – Corporation Law – Liability of the Corporation – Apparent Authority
In 1987, the a manager of First Philippine International Bank (FPIB), Mercurio Rivera, entered into a contract of sale with Demetrio Demetria and Jose Janolo for the purpose of selling lands owned by the bank to Demetria and Janolo. FPIB at that time is already under conservatorship and the conservator assigned was Leonida Encarnacion. Later, Demetria and Janolo sold the land they bought to Carlos Ejercito. Later however, Encarnacion sought the repudiation of the contracts entered into by Rivera. She asserted that the bank is already in conservatorship hence the contracts are done without authority; that as conservator, she is the one empowered to dispose the assets of the bank.
ISSUE: Whether or not the real property sales contracts entered into by a property manager, like Rivera, are valid for being entered into with apparent authority.
HELD: Yes. Rivera was acting with apparent authority. This can be gleaned from the fact that Rivera has been advertised by the bank as the go-to guy as far as disposition of assets is concerned. Rivera is the manager of the property management department of the bank and as such is in charge of the assets of the bank. Therefore, the fact that there is already a conservator is of no moment. Rivera has been the active participant in all the transactions involving the lands subject of the contracts. He was advertised as such. The buyers therefore are not expected to know Rivera is not supposed to be in charge of the selling of the properties.
Read other versions of this digest: Legal Ethics; Forum Shopping | Civil Law; Perfection of Contract of Sale ¦ Private International Law; Forum Non Conveniens
