G.R. No. 159486-88 - Estrada vs. Sandiganbayan

In 1985, Contractors Equipment Corporation (CEC) leased various construction equipment to Roblett Industrial Construction Corporation (RICC), resulting in unpaid accounts totaling ₱342,909.38.
On 18 December 1985, RICC issued postdated checks totaling ₱10,000 that were dishonored; on 19 December 1985, RICC’s AVP for Finance, Candelario S. Aller Jr., signed an Agreement with CEC confirming the account, applying an offset of ₱115,000.00 in construction materials and fixing the remaining balance at ₱227,909.38, which was subsequently increased to ₱237,909.38 due to the dishonored checks.

On 24 July 1986, CEC’s GM, Mariano R. Manaligod Jr., sent RICC a demand letter for ₱237,909.38, seeking settlement by 31 July 1986; RICC requested a 30-day extension.
RICC alleged that the Agreement was unauthorized (signed without Board approval), asserted overpayment of ₱12,000.00 based on Equipment Daily Time Reports for 2 May–14 June 1985, and maintained that the Agreement did not reflect the true intention of the parties.

Trial Court (19 December 1990): Found the Agreement valid and binding in its entirety, held RICC liable for ₱237,909.38 plus legal interest from 31 July 1986, awarded ₱2,000.00 litigation expenses, 20% attorney’s fees, and costs of suit.
Court of Appeals (29 July 1994): Affirmed the Trial Court’s decision in toto.

Whether the Agreement is unenforceable for being an unauthorized contract (signed without Board approval).

Whether RICC had fully paid its obligation under the lease and overpaid by ₱12,000.00 based on its daily time reports.