G.R. No. 117847 - People vs People's Aircargo and Warehousing Co., Inc. vs. Court of Appeals

Petitioner: People’s Aircargo and Warehousing Co. Inc., incorporated mid-1986 to operate a customs bonded warehouse at the old Manila International Airport in Pasay City.
Private respondent: Stefani SaAo, industrial engineering consultant engaged to prepare feasibility studies, an operations manual, and to conduct a seminar for petitioner.

SaAo’s proposal: Professional consultancy for a Project Feasibility Study (market, technical, financial) and documentation preparation, at a fee of ₱350,000, payable 50% upon agreement, 25% after 15 days, 25% upon submission; deliverables due within 30 days of first payment.
Confirmation and performance: Petitioner’s president, Antonio Punsalan Jr., signed a confirmation letter same date, paid ₱100,000 down, and ultimately paid the balance. SaAo completed and delivered the study without objection.

SaAo’s December proposal: Consultancy for an operations manual and employee seminar/workshop, in a “package deal” of ₱400,000, payable ₱80,000 down and six post-dated checks of ₱53,333 each.
Performance and benefits conferred:

January 10, 1987 – Operations manual received by petitioner and submitted to the Bureau of Customs.
Third week of January 1987 – Three-day training seminar conducted on petitioner’s premises.
May 1987 – Petitioner obtained license to operate the bonded warehouse, relying on SaAo’s manual.

February 9, 1988 – SaAo filed a collection suit for ₱400,000. Petitioner denied corporate authorization for the Second Contract and pleaded simulation, countering that an internal team was assigned the manual.
RTC Decision (October 26, 1990) – Declared the Second Contract unenforceable or simulated; awarded SaAo ₱60,000 on unjust enrichment (quantum meruit).
CA Decision (February 28, 1994) – Rejected simulation, found Punsalan had apparent authority based on the First Contract precedent and corporate acquiescence, held the Second Contract valid and binding, and ordered payment of ₱400,000. Reconsideration denied (October 28, 1994).
Supreme Court petition – Petitioner alleged grave abuse of discretion in (1) binding the corporation to a contract its president lacked board authority to execute, (2) finding a corporate “practice” from a single prior instance, and (3) rejecting simulation.

Whether the president of petitioner-corporation had apparent authority to bind the corporation to the Second Contract despite no express board approval.
Whether the Second Contract was a valid, enforceable agreement and not a simulated transaction.