G.R. No. 129459 - San Juan Structural and Steel Fabricators, Inc. vs. Court of Appeals

February 14, 1989: Agreement for sale executed between petitioner and Motorich Sales Corp. (through its Treasurer, Nenita Lee Gruenberg)
March 2, 1989: Stipulated deadline for full payment of balance
April 6, 1989: ACL Development Corp. sells the land to Motorich Sales Corp.
July 18, 1994: RTC, Makati (Branch 63) renders decision dismissing complaint and counterclaim
March 18, 1997: Court of Appeals affirms with modification (refund of P100,000 earnest money)
September 29, 1998: Supreme Court Decision resolving petition for review

1987 Philippine Constitution (decision post-1990)
B.P. Blg. 68 (Corporation Code):
• Sec. 23 – Corporate powers vest in board of directors
• Sec. 40 – Sale of corporate assets requires board vote and, if real estate, two-thirds stockholder approval
• Sec. 96 – Definition of a close corporation
Civil Code of the Philippines:
• Art. 1874 – Written authority required for sale of land through an agent
• Art. 1878 – Special power of attorney for immovable transactions
• Art. 1318 – Requisites of contract (consent, object, cause)
• Art. 1409 – Contracts void from inception remain unratifiable
• Arts. 2154–2155 – Restitution for mistake

RTC dismissed both petitioner’s complaint for specific performance and respondents’ counterclaim, ruling that treasurer Gruenberg lacked authority to bind Motorich Sales Corp. in selling corporate land.
CA affirmed the dismissal but ordered respondent Gruenberg to refund the P100,000 earnest money for unjust enrichment.
Petitioner sought SC review, raising issues on contract validity, piercing the corporate veil, alleged TSN alteration, and entitlement to damages and attorney’s fees.

A corporate treasurer’s authority does not extend to disposing of corporate real estate absent express board authorization or ratification.
No board resolution, bylaw provision, articles of incorporation, or other proof demonstrated that Gruenberg was empowered to sell Motorich’s land.
Under Civil Code Arts. 1874 and 1878, sale of land via agent requires written authority; absence renders agreement void.
No ratification by Motorich: the lone handwritten receipt, signed only by Gruenberg, did not establish corporate approval.
Conclusion: The February 14, 1989 Agreement was void for lack of seller’s consent and authority.

Petitioner argued that Gruenberg and husband owned 99.866 % of Motorich stock and that it functioned as a close corporation dispensing with board formalities.
Sec. 96, Corporation Code, sets strict requirements for a close corporation (shareholder limit, transfer restrictions, no public offering); Motorich’s articles lack these.
Mere concentrated ownership does not justify disregarding corporate personality absent evidence of fraud, illegality, or evasion of existing obligations.
Even if pierced, the property would fall under conjugal regime, requiring spousal consent or court authority for alienation—none shown.
Conclusion: Veil of corporate fiction remains intact.

Petitioner pointed to a purported change from “Yes” to “No” in Gruenberg’s testimony.
Her full testimony confirmed she never represented herself as authorized to sell; she merely

On February 14, 1989, San Juan Structural and Steel Fabricators, Inc. (Petitioner), through its President Andres T. Co, and Motorich Sales Corporation (Respondent), represented by its Treasurer Nenita Lee Gruenberg, executed an agreement for the sale of Lot 30, Block 1 of Acropolis Greens Subdivision (414 sq. m.), Quezon City, with TCT No. (362909) 2876.
Purchase price was set at ₱5,200.00 per square meter; Petitioner paid ₱100,000.00 as earnest money, with the balance due by March 2, 1989.
Petitioner prepared a Metrobank cashier’s check for the balance and arranged to meet Respondent’s representatives, but Respondent Gruenberg failed to appear.
Petitioner alleged Respondents refused to execute the Transfer of Rights/Deed of Assignment, causing delays and purported damages.
Meanwhile, ACL Development Corp. sold the same lot to Motorich by Deed of Absolute Sale on April 6, 1989, and the title was reissued in Motorich’s name under TCT No. 3571.
Petitioner claimed moral, nominal, exemplary damages, loss of opportunity, and attorney’s fees totaling in the hundreds of thousands of pesos.

Regional Trial Court (Makati, Branch 63) dismissed both Petitioner’s complaint and Respondents’ counterclaim for lack of merit, finding no proof that Treasurer Gruenberg was authorized to bind Motorich in the sale.
Court of Appeals (Sixth Division) affirmed the RTC decision with modification, ordering Gruenberg to refund the ₱100,000.00 earnest money but otherwise dismissing Petitioner’s claims.
Court of Appeals denied Petitioner’s motion for reconsideration on June 10, 1997.
Petitioner filed a petition for review on certiorari before the Supreme Court, raising questions on contract validity, corporate authority, piercing the corporate veil, transcript alteration, and liability for damages and fees.

Whether the February 14, 1989 Agreement constituted a valid and enforceable contract of sale between Petitioner and Motorich Sales Corporation.
Whether Motorich’s corporate veil should be pierced because its stock was almost entirely held by Nenita and Reynaldo Gruenberg.
Whether a purported alteration in the transcript of stenographic notes (changing a “Yes” to a “No”) materially affected the case.
Whether Respondents are liable for damages, moral and exemp