8/2/2019 5. People Aircago vs CA

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PEOPLE’S AIRCARGO VS. COURT OF APPEALS

FACTS:

Petitioner is a domestic corporation, which was organized in the middle of 

1986 to operate as customs bonded warehouse at the old Manila InternationalAirport in Pasay City.

 To obtain a license for the corporation for the bureau of customs, Antonio

Punsalan Jr., the corporation president solicited a proposal from the private

respondent, Stefanie Sano, for the preparation of a fraudulently study. Private

respondent submitter a letter proposal dated Oct. 17, 1986.

Initially, Chen Yong, the majority stockholder if the petitioner objected to

private respondents’ offer, as another company proved similar proposal at only

P15,000. However, Punsalan preferred private respondent’s services because of 

the latter’s membership in the task force, which was supervising the transition thebureau of customs from the Marcos Government to the Aquino Government.

 The agreement was confirmed. Private Respondent prepared a fraudulently

study for petitioner which eventually paid him the Balance of the contract price,

although not according to the schedule agreed upon.

On Dec. 4, 1986 upon Punsalan’s request Stefani Sano sent petitioner

another letter-proposal for consultancy services. In this second contract an

operational manual has already been approved by the Commissioner and that

concurring seminar/workshop for the company’s employees. On January 10, 1987,

Andy Villaceren, vice-president of petitioner, received the operations manualprepared by respondent. Petitioner submitted said operations manual to the

bureau of customs in connection with the former’s application to operate a bonded

warehouse; Thereafter, in May 1987, the Bureau issued to it a license to operate,

enabling it to become one of the three public customs bonded warehouse at the

international airport. Private respondent also conducted, in the third week of Jan.

1987 in the warehouse of petitioner, a three-day training seminar for the latter’s

employees.

ISSUE: WON PETITIONER MAY VALIDLY DENY THE DEMAND THE PAYMENT MADE

BY PRIVATE RESPONDENT SUNO, ON THE GROUND THAT SECOND CONTRACT WASENTERED INTO BY PUNSALAN WITHOUT AUTHORITY FROM THE BOARD.

HELD: No

In the case at bar, petitioner through its President entered into the first contract

without first securing board approval. Despite such lack of board approval,

petitioner did not object to or repudiate said contract, thus clothing its president

the power to bind the corporation. The grant of apparent authority to Punsalan is

evident in the testimony of Yong, senior vice-president, treasurer and major

stockholder of petitioner. The first contract was consummated, implemented and

paid without a hitch.

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