FIRST DIVISION
G.R. No. 210043, September 26, 2018
AYALA LAND, INC., Petitioner, v. ASB REALTY CORPORATION AND E.M. RAMOS & SONS, INC., Respondents.
D E C I S I O N
DEL CASTILLO, J.:
[U]nder 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.1
In the case at bar, defendant Ramos children failed to adduce a single evidence to show that they have been validly authorized by the Board of Directors of EMRASON to enter into a Contract to Sell with ALI thereby rendering the aforesaid contract void and unenforceable. Defendant Ramos children failed to present even a single witness to identify board resolutions, secretary's certificates or any written document for the purpose of proving that EMRASON validly conferred authority upon them to sell the subject property. Notably, not a single signatory to the Contract to Sell was presented by defendant Ramos children to identify the same and to testify as to the execution thereof.
x x x x
Upon the other hand, defendant ALI claims that it transacted with the Ramos children in good faith. On the contrary, evidence show that ALI knew and has in fact acknowledged the authority of Emerito Ramos, Sr to enter into contracts for and in behalf of EMRASON before ALI entered into the contract with defendant Ramos children. In almost all of defendant ALI's correspondence with EMRASON, defendant ALI specifically addressed the same to Emerilo Ramos, Sr., referring to him either as Chairman or President. In acknowledging the position of Emerito Ramos, Sr. in EMRASON, defendant ALI even requested Emerito Ramos, Sr. to meet its Chairman Jaime Zobel de Ayala, President Francisco H. Licuanan, Vice-President Fernando Zobel and Assistant Vice-President Victor H. Manarang for a luncheon meeting. More importantly, defendant ALI, though its representatives/realtors namely Mr. Geronimo J. Manzano and Oscar P. Garcia, wrote Emerito Ramos Sr. a letter dated 22 April 1994 regarding the draft formal offer of ALI to develop the subject property. In addition, ALI's letter dated 11 May 1994 clearly shows that it acted in bad faith. A perusal of the said letter which was described to be its "best and final offer", would readily show that the same [was] solely addressed to Emerito Ramos, Sr., seeking his acceptance and approval. If defendant ALI honestly believe[d] that Emerito Ramos, Jr. and Antonio Ramos [were] fully authorized by EMRASON to execute the Contract to Sell surely defendant ALI would not have bothered to seek the acceptance and approval of Emerito. Ramos. Sr. Notably the alleged authorized agents of EMRASON, Emerito Ramos. Jr. and Antonio Ramos, were merely furnished a copy of the said letter proposal and were not even included as signatories for the approval of the same. x x x
x x x x
It is an established rule that persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it.
In this connection, the Court observes numerous formal defects in the Contract to Sell[,] which would further support the fact that defendant ALI knew the absence of authority of defendant Ramos children to execute the same. Oddly, the first page of the contract failed to include the names of the duly authorized representative/s of EMRASON as the space specifically provided therefor was left in blank. In contrast, the duly appointed [a]ttorneys-in-fact of ALI are clearly named therein and designated as such. Similarly, page eighteen (18) of the said contract merely provided blank spaces to be filled up by the signatories of EMRASON vis-a-vis that of defendant ALI where the names of the [a]ttorneys-in-[f]act of defendant ALI are typewritten. Even in the acknowledgment page, only the names of the representatives of ALI were included. Interestingly, the acknowledgment failed to mention the names of signatories of EMRASON and their respective Community Tax Certificate Numbers. Considering that the subject contract involves a multi-million [peso] transaction, the Court finds it absolutely incredible that the parties thereto would fail to include the names of the signatories, their respective positions and/or authorities to enter into the said contract.26 (Citations omitted )
WHEREFORE, premises considered judgment is hereby rendered in favor of plaintiffs ASB Realty Corporation (ASB) and E.M. Ramos & Sons, Inc. (EMRASON) and against defendant Ayala Land and [sic] Inc. (ALI), and defendants Emerito B. Ramos, Jr., Januario [sic] B. Ramos, Josefa R. de la Rama, Victoria R. Tanjuatco, Horacio de la Rama, Teofilo Tanjuatco III, (Ramos children) as follows, viz[.]:
- DECLARING the Contract to Sell dated 18 May 1994 involving the "Dasmariñas Properties" entered into by defendant Ayala Land Inc. and defendant[s] Ramos children as null [and] void and unenforceable;
- DIRECTING the Register of Deeds for the Province of Cavite to CANCEL the annotation of the aforesaid " Contract to Sell" on the following Transfer Certificates[s] of Title Nos.–
2.1 T-1985 2.7 T-1991 2.13 T-1997 2.2 T- 1986 2.8 T-1992 2.14 T-1998 2.3 T-1987 2.9 T-1993 2.15 T-1999 2.4 T-1988 2.10 T-1994 2.16 T-20806 2.5 T-1989 2.11 T-1995 2.17 T-45584 2.6 T-1990 2.12 T-1996 2.18 T-16444- DECLARING the "Letter-Agreement" dated 21 May 1994 entered into by ASB and EMRASON as valid, binding and enforceable;
- DENYING the claim of plaintiffs ASB and EMRASON for moral damages for lack of merit;
- ORDERING defendant Ayala Land Inc. and defendant[s] Ramos children to jointly and severally pay ASB and EMRASON the sum of Two [Hundred Fifty] Thousand Pesos (Php250,000.00) as and by way of exemplary damages;
- ORDERING defendant Ayala Land Inc. and defendant[s] Ramos children to jointly and severally pay ASB and EMRASON the sum of Two [Hundred Fifty] Thousand Pesos (Php250.000.00) as and by way of temperate damages;
- ORDERING defendant Ayala Land Inc. and defendant[s] Ramos children to jointly and severally pay ASB and EMRASON the sum of One Hundred Fifty Thousand Pesos (Php150,000.00) as and by way of nominal damages;
- ORDERING defendant Ayala Land Inc. and defendant[s] Ramos children to jointly and severally pay ASB and EMRASON the sum of Two Hundred Thousand Pesos (Php200,000.00) as and by way of attorney's fees;
- ORDERING defendant Ayala Land Inc. and defendant[s] Ramos children to jointly and severally pay ASB and EMRASON the costs of suit;
- DENYING the respective Counter-claims of defendant Ayala Land Inc. and defendant[s] Ramos children against plaintiff[s] ASB and EMRASON for lack of factual and legal basis; [and]
- DENYING the respective Crossclaims of defendant Ayala Land Inc. and defendant[s] Ramos children against one another for lack of merit.
SO ORDERED.31
WHEREFORE, the appeal is DISMISSED. The Decision dated June 29, 2010 of the Regional Trial Court of Imus, Cavite, Branch 20, in Civil Case No. 931-94, is AFFIRMED.
SO ORDERED.41 (Emphasis in the original )
- THE COURT OF APPEALS GRAVELY ERRED IN ANNULLING THE CONTRACT TO SELL BETWEEN PETITIONER AND EMRASON NOTWITHSTANDING CLEAR EVIDENCE CONSISTENT WITH STATUTE AND CASE LAW SHOWING EMRASON'S OWN CONFIRMATION THAT THE RAMOS CHILDREN WITH WHOM PETITIONER DEALT, HAD BOTH AUTHORITY AND CAPACITY TO CLOSE THE SALE BETWEEN THEM.
- THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE VALIDITY OF THE LETTER-AGREEMENT BETWEEN ASBRC AND EMRASON DESPITE EVIDENCE AS ALLOWED BY LAW AND JURISPRUDENCE SHOWING THAT THE CONTRACT TO SELL THE RAMOS CHILDREN HAD SIGNED ON BEHALF OF EMRASON PRE- DATED THAT SIGNED BY RAMOS, SR. WITH ASRBC WHICH CARRIED NO BOARD AUTHORITY TO BEGIN WITH.
- THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE RTC'S DISMISSAL OF PETITIONER'S COMPULSORY COUNTERCLAIM AND CROSS-CLAIM DESPITE UNCONTROVERTED EVIDENCE ALLOWED BY LAW AND JURISPRUDENCE SHOWING THE BAD FAITH AND DAMAGE INFLICTED BY EMRASON ON PETITIONER BY ITS DISAVOWAL OF THE AUTHORITY GIVEN THE RAMOS CHILDREN TO CLOSE THE SALE TRANSACTION THEY HAD EARLIER SIGNED WITH PETITIONER.43
The doctrine of apparent authority is a species of the doctrine of estoppel. Article 1431 of the Civil Code provides that '[t]hrough 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.'50
August 3, 1993
AYALA LAND INC. (ALI)
Makati Stock Exchange Bldg.
Ayala Avenue, Makati
Metro Manila
Attention: Don Jaime Zobel de Ayala
Chairman
___________________________________
Thru : Mr. Victor H. Manarang
Assistant Vice President
Project Development Group
___________________________________
Gentlemen:
We deeply appreciate the privilege of receiving your letter- proposal dated July 28, 1993 signed by Mr. Victor H. Manarang regarding your interest in the development of our properties at Barrios Bucal and Langkaan, Dasmarinas, Cavite on a joint venture basis.
Your said letter-proposal was taken up by the Board of EMRASON during its regular meeting last Saturday, July 31, 1993 for our usual study and consideration. Messrs. Emerita B. Ramos, Jr. and Antonio B. Ramos, corporation officials, have been authorized to collaborate and continue negotiating and discussing with you terms and conditions that are equitable and profitable and mutually beneficial to both ALI and EMRASON.
We are honored to look forward tor the possibility of starting business and friendly relationship with your goodselves.
Very truly yours,
(sgd.)
EMERITO M. RAMOS, SR.
Chairman of the Board
It is a settled rule that persons dealing with an agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of the agent's authority, and in case either is controverted, the burden of proof is upon them to establish it. x x x56 (Emphasis supplied )
Inasmuch as a corporate president is often given general supervision and control over corporate operations, the strict rule that said officer has no inherent power to act for the corporation is slowly giving way to the realization that such officer has certain limited powers in the transaction of the usual and ordinary business of the corporation. In the absence of a charter or bylaw provision to the contrary. the president is presumed to have the authority to act within the domain of the general objectives of its business and within the scope of his or her usual duties.
Hence, it has been held in other jurisdictions that the president of a corporation possesses the power to enter into a contract for the corporation, when the 'conduct on the part of both the president and the corporation [shows] that he had been in the habit of acting in similar matters on behalf of the company and that the company had authorized him so to act and had recognized, approved and ratified his former and similar actions.' Furthermore, a party dealing with the president of a corporation is entitled to assume that he has the authority to enter, on behalf of the corporation, into contracts that are within the scope of the powers of said corporation and that do not violate any statute or rule on public policy.61 (Citations omitted)
Emerito Ramos, Sr. testified that on 17 May 1994[,] a special Board meeting was called to discuss various proposals regarding the Dasmariñas Property. In attendance were Emerita Ramos, Sr., Rogerio Escobal and Arturo de Leon. After some discussion, the Board resolved to accept the proposal of ASB Realty being the most advantageous and beneficial to EMRASON. In the said meeting, the Board [of] Directors also agreed, viz[.]: that Emerito Ramos, Sr. shall be authorized to accept the cash advance from ASB in his personal capacity; and that Emerito Ramos, Sr and Antonio Ramos shall be authorized to execute a Real Estate Mortgage in favor of ASB. Then, he identified the Minutes of the aforesaid Board Meeting and the signatures of the members of the board appearing thereon. He further alleged that at 4:00 in the afternoon of 17 May 1994 a Stockholders['] Meeting was subsequently held. He alleged that there was a quorum during the said meeting considering that he was present and the fact that he owns 2/3 of the subscribed capital of EMRASON.62
In this connection, the Court observes numerous formal defects in the Contract to Sell which would further support the fact that defendant ALI knew the absence of authority of defendant Ramos children to execute the same. Oddly, the first page of the contract failed to include the names of the duly authorized representative/s of EMRASON as the space specifically provided therefor was left in blank. In contrast, the duly appointed [a]ttorneys-in-fact of ALI are clearly named therein and designated as such. Similarly, page eighteen (18) of the said contract merely provided blank spaces to be filled up by the signatories of EMRASON vis-a-vis that of defendant ALI where the names of the [a]ttorney's-in-[f]act of defendant ALI are typewritten. Even in the acknowledgment page, only the names of the representatives of ALI were included. Interestingly, the acknowledgment failed to mention the names of signatories of EMRASON and their respective Community Tax Certificate Numbers. Considering that the subject contract involves a multi-million transaction, the Court finds it absolutely incredible that the parties thereto would fail to include the names of the signatories, their respective positions and/or authorities to enter into the said contract.70 (Emphasis supplied)
Endnotes:
* Per raffle dated September 19, 2018.
1 Professional Services, Inc. v. Court of Appeals, 568 Phil. 158, 168 (2008).
2 Rollo, pp. 15-34.
3 Id. at 44-58; penned by Associate Justice Stephen C. Cruz and concurred in by Associate Justices Magdangal M. de Leon and Myra V. Garcia-Fernandez.
4 Id. at 60-62.
5 Id. at 255-268; penned by Presiding Judge Fernando L. Felicen.
6 Id. at 267.
7 Pruticularly TCT Nos. T-19285; T-19286: T-19287; T-19288; T-19289; T-19290 (Lot No. 3860-A-1); T-19290 (Lot No. 3860-A-3); T-19291; T-19792: T-19293; T-19294; T-19295; T-19296; T-19297; T-19298; T-19299 (Lot No. 3868-A); T-19299 (Lot No. 3868-B); and T-20806. Id. at 66.
8 Id. at 16.
9 Id. at 17.
10 Id.
11 Id. at 134.
12 Id. at 78-88. Another letter of even date was made by ASBRC, with the conformity of Ramos, Sr. and Antonio including additional conditions to the letter-agreement. Id at 89-90.
13 Id. at 91-102.
14 Id. at 18.
15 Particularly Ramos, Jr., Januario, Josefa R. De La Rama, and Victoria R. Tanjuatco.
16 Rollo, p. 103.
17 Id.at 67.
18 Id. at 67-68.
19 Id. at 68.
20 Id. at 69.
21 Id. at 68.
22 Id.
23 Id. at 70.
24 Id. at 64-77.
25 Id. at 255-268.
26 Id. at 258-260.
27 Id. at 261.
28 357 Phil. 850 (1998).
29 Rollo, p. 262.
30 Id. at 263.
31 Id. at 266-268.
32 Id. at 293-297 and 301-302.
33 Id. at 44-58.
34 Id. at 53.
35 Id. at 54.
36 Id. at 55.
37 Id.
38 Inadvertently stated by the CA as "a special meeting on May 7, 1994". Id at 56.
39 Id.
40 Id. at 57.
41 Id.
42 Id. at 60-62.
43 Id. at 20-21.
44 First Philippine Holdings Corporation v. Trans Middle East (Phils.) Equities, Inc., 622 Phil. 623, 628 (2009).
45 Id. at 629.
46 Id.
47 Id. at 629, citing Associated Bank v. Pronstroller, 580 Phil. 104, 118 (2008).
48 People's Aircargo and Warehousing Company, Inc. v. Court of Appeals, supra note 28 at 862, citing Premium Marble Resources, Inc. v. Court of Appeals, 332 Phil. 10, 18 (1996).
49 540 Phil. 225 (2006).
50 Id. at 246, citing De Castro v. Ginete, 137 Phil. 453, 459 (1969).
51 Rollo, p. 134.
52 479 Phil. 896, 914 (2004), where this Court held:For the principle of apparent authority to apply, the petitioner was burdened to prove the following: (a) the acts of the respondent justifying belief in the agency by the petitioner; (b) knowledge thereof by the respondent which is sought to be held; and, (c) reliance thereon by the petitioner consistent with ordinary care and prudence. x x x
53 Rollo, p. 134.
54 Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc., supra note 52 at 910.
55 639 Phil. 35 (2010).
56 Id. at 48, citing Manila Memorial Park Cemetery Inc. v. Linsangan, 485 Phil. 764, 779 (2004).
57 Supra note 28.
58 Id. at 863.
59 Rollo, pp. 23-24.
60 Supra note 28.
61 Id. at 866-867.
62 Rollo, p. 262.
63 Id. at 27.
64 See id. at 25 where ALI stated, "[t]hat petitioner had addressed some of its letters to [Ramos], Sr. does not mean that petitioner knew of his supposed status as EMRASON's exclusive authorized representative, or, that the Ramos children only had limited authority to negotiate.
65 Supra note 28.
66 Id. at 864. Emphasis supplied.
67 Id. at 867.
68 The same was raised by petitioner in his appellant's brief before the CA. See rollo, p. 327.
69 Id. at 263.
70 Id. at 260.