GR 140667; (August, 2004) (Digest)
G.R. No. 140667 ; August 12, 2004
WOODCHILD HOLDINGS, INC., petitioner, vs. ROXAS ELECTRIC AND CONSTRUCTION COMPANY, INC., respondent.
FACTS
Petitioner Woodchild Holdings, Inc. (WHI) sought to purchase a lot from respondent Roxas Electric and Construction Company, Inc. (RECCI) for a warehouse. The initial offer to purchase, accepted by RECCI President Roberto Roxas, included a provision that if the existing right of way was insufficient for WHI’s 45-foot container vans, RECCI would sell additional square meters from its adjacent property. This stipulation was later incorporated into the Deed of Absolute Sale executed by Roxas on behalf of RECCI. After the sale, WHI constructed a warehouse and secured a lease contract. However, WHI found the right of way inadequate and demanded that RECCI comply with its obligation to sell an additional 500-square-meter portion of the adjacent lot. RECCI refused, contending that Roxas had no authority to bind the corporation to sell part of another lot, as his board resolution only authorized the sale of the main lot.
ISSUE
Whether Roberto Roxas, as President of RECCI, had the authority to bind the corporation to the stipulation in the Deed of Absolute Sale obligating it to sell a portion of its adjacent lot.
RULING
The Supreme Court ruled that Roxas lacked the specific authority to bind RECCI to sell a portion of the adjacent lot, making that particular stipulation unenforceable. The Court’s legal logic is anchored on the principles of agency and the Statute of Frauds. A corporate president’s authority is limited to acts within the ordinary course of business. The sale of corporate real property is an act of strict dominion under Article 1878 of the Civil Code, requiring a special power of attorney. The board resolution granted Roxas authority only to sell the specific lot (Lot No. 491-A-3-B-2); it did not confer a special power to contractually obligate the corporation to sell a portion of a different lot (Lot No. 491-A-3-B-1) in the future. Consequently, the ancillary promise to sell additional land was unenforceable against RECCI for lack of proper authorization. However, the Court upheld the validity of the main sale of the primary lot, as that was within Roxas’s granted authority. The unenforceability of the ancillary stipulation did not void the entire contract, as it was severable from the principal object of the sale.