Here are select January 2013 rulings of the Supreme Court of the Philippines on commercial law:
Corporations; power of bank employee to bind bank. Even assuming that the bank officer or employee whom petitioner claimed he had talked to regarding the March 22, 1984 letter had acceded to his own modified terms for the repurchase, their supposed verbal exchange did not bind respondent bank in view of its corporate nature. There was no evidence that said Mr. Lazaro or Mr. Fajardo was authorized by respondent bank’s Board of Directors to accept petitioner’s counter-proposal to repurchase the foreclosed properties at the price and terms other than those communicated in the March 22, 1984 letter. As this Court ruled in AF Realty & Development, Inc. v. Dieselman Freight Services, Co.:
Section 23 of the Corporation Code expressly provides that the corporate powers of all corporations shall be exercised by the board of directors. Just as a natural person may authorize another to do certain acts in his behalf, so may the board of directors of a corporation validly delegate some of its functions to individual officers or agents appointed by it. Thus, contracts or acts of a corporation must be made either by the board of directors or by a corporate agent duly authorized by the board. Absent such valid delegation/authorization, the rule is that the declarations of an individual director relating to the affairs of the corporation, but not in the course of, or connected with, the performance of authorized duties of such director, are held not binding on the corporation.
Thus, a corporation can only execute its powers and transact its business through its Board of Directors and through its officers and agents when authorized by a board resolution or its by-laws.