December 2013 Philippine Supreme Court Decisions on Commercial Law

Here are select December 2013 rulings of the Supreme Court of the Philippines on commercial law:

Corporations; doctrine of apparent authority. 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.  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. Advance Paper Corporation and George Haw, in his capacity as President of Advance Paper Corporation v. Arma Traders Corporation, Manuel Ting, et al., G.R. No. 176897, December 11, 2013.

Corporations; doctrine of apparent authority . In People’s Aircargo and Warehousing Co., Inc. v. Court of  Appeals,  we ruled that the doctrine of apparent authority is applied when the petitioner, through its president Antonio Punsalan Jr., entered into the First Contract without first securing board approval. Despite such lack of  board approval, petitioner did not object to or repudiate said contract, thus “clothing” its president with the power to bind the corporation. “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. Advance Paper Corporation and George Haw, in his capacity as President of Advance Paper Corporation v. Arma Traders Corporation, Manuel Ting, et al., G.R. No. 176897, December 11, 2013.

(Hector thanks Miracle Rodriguez and Camille Maria M. Castolo for their assistance to Lexoterica.)

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