Case Digest (G.R. No. 111448)
Facts:
- AF Realty & Development, Inc. and Zenaida R. Ranullo are the petitioners.
- Dieselman Freight Services Co., Manuel C. Cruz, Jr., and Midas Development Corporation are the respondents.
- On May 10, 1988, Manuel C. Cruz, Jr. issued a letter to Cristeta N. Polintan, authorizing her to find buyers for a commercial lot owned by Dieselman.
- The lot is located at 104 E. Rodriguez Avenue, Pasig City, covering 2,094 square meters, with Transfer Certificate of Title No. 39849.
- Cruz, Jr. lacked written authority from Dieselman to sell the property.
- Polintan later authorized Felicisima "Mimi" Noble to sell the lot to AF Realty at P2,500.00 per square meter.
- Zenaida Ranullo accepted the offer and issued a check for P300,000.00 as partial payment, which was acknowledged as refundable.
- On June 29, 1988, AF Realty confirmed its intention to buy the lot and requested a board resolution from Dieselman.
- Polintan provided only the original title, tax declaration, and a photocopy of Dieselman's Articles of Incorporation.
- On August 2, 1988, Cruz, Sr. acknowledged the P300,000.00 as "earnest money" but later increased the price to P4,000.00 per square meter.
- On August 13, 1988, Cruz, Sr. terminated the offer and demanded the return of the title.
- AF Realty filed a complaint for specific performance against Dieselman and Cruz, Jr. in the Regional Trial Court.
- Dieselman executed a Deed of Absolute Sale with Midas Development Corporation on July 30, 1988, for the same property at P2,800.00 per square meter.
- The trial court ruled in favor of AF Realty, but the Court of Appeals reversed this decision.
Issue:
- (Unlock)
Ruling:
- The Court of Appeals ruled that there was no perfected contract of sale between AF Realty and Dieselman due to the lack of written authority from Dieselman for Cruz, Jr. to sell the property.
- The Court upheld the validity of Midas Development Corporation's purchase, stating it was executed with proper authority and without bad faith.
- Dieselman and Cruz, Jr. we...(Unlock)
Ratio:
- The Court of Appeals based its decision on the principle that corporate powers must be exercised by the board of directors or a corporate agent duly authorized by the board, as per the Corporation Code.
- Cruz, Jr. lacked written authority to sell the property...continue reading
Case Digest (G.R. No. 111448)
Facts:
The case involves AF Realty & Development, Inc. and Zenaida R. Ranullo as petitioners against Dieselman Freight Services Co., Manuel C. Cruz, Jr., and Midas Development Corporation as respondents. The events leading to the case began on May 10, 1988, when Manuel C. Cruz, Jr., a director of Dieselman, issued a letter titled "Authority To Sell Real Estate" to Cristeta N. Polintan, a real estate broker. This letter authorized Polintan to find buyers for a commercial lot owned by Dieselman, located at 104 E. Rodriguez Avenue, Barrio Ugong, Pasig City, Metro Manila, with a total area of 2,094 square meters and covered by Transfer Certificate of Title No. 39849. However, Cruz, Jr. did not possess written authority from Dieselman to sell the property. Subsequently, Polintan authorized Felicisima "Mimi" Noble to sell the same lot, which she offered to AF Realty at a price of P2,500.00 per square meter. Zenaida Ranullo, a board member and vice-president of AF Realty, accepted the offer and issued a check for P300,000.00 as a partial payment, which Polintan acknowledged as refundable within two weeks if AF Realty decided against the purchase.
On June 29, 1988, AF Realty confirmed its intention to buy the lot and requested a board resolution from Dieselman authorizing the sale. However, Polintan could only provide the original title, tax declaration, and a photocopy of Dieselman's Articles of Incorporation. On August 2, 1988, Manuel F. Cruz, Sr., the president of Dieselman, acknowledged the P300,000.00 as "earnest money" but later demanded a higher price of P4,000.00 per square meter. On August 13, 1988, Cruz, Sr. terminated the offer and demanded the return of the title. AF Realty then filed a complaint for specific performance against Dieselman and Cruz, Jr. in the Regional Trial Court, claiming a perfected contract of sale and seeking damages.
In the meantime, Dieselman had executed a Deed of Absolute Sal...