G.R. No. L-27022 May 28, 1970
RADIO HEALTH TRADING CORPORATION, plaintiff-appellee, vs. AIDA L. ABASTILLAS, doing business under the name and Style of AA General Merchandising, defendant-appellant.

FACTS

Plaintiff-appellee Radiowealth Trading Corporation filed an amended complaint against defendant-appellant Aida L. Abastillas to recover the sum of P37,236.00, representing the value of goods delivered pursuant to their dealership contract. During the pre-trial conference, Atty. Isidro Real, Jr. appeared for the plaintiff, along with Mr. Eugenio Elevado, the plaintiff corporation’s chief accountant, who presented a power of attorney authorizing him to represent the plaintiff. Mr. Elevado promised to later submit a board resolution authorizing the vice-president and general manager, Mr. Ramon P. Binamira, to execute said power of attorney. The defendant and her counsel, Atty. Hospicio M. Velarde, were also present. The court facilitated a settlement, resulting in a compromise agreement where the defendant confessed judgment for P35,795.00, with the difference of P1,441.00 to be resolved by the court after submission of supporting statements. The court approved the terms and rendered a decision on February 16, 1966, incorporating the compromise but making it subject to the submission of the board resolution and the court’s determination of the P1,441.00 dispute. The plaintiff later submitted a detailed statement of account and excerpts from its amended by-laws and board meeting minutes electing Mr. Binamira as vice-president and general manager, but not the specific board resolution authorizing the power of attorney. The defendant received the decision on March 3, 1966, and on March 10, 1966, filed a motion to declare the plaintiff non-suited for alleged invalid representation at the pre-trial. This motion was denied. On May 12, 1966, the defendant filed a petition to set aside the judgment, which was denied by the court on May 14, 1966, with an order for the defendant to either accept or except to the plaintiff’s claim of P37,236.00. The defendant’s motion for reconsideration was denied on June 4, 1966, prompting this appeal.

ISSUE

Whether the trial court erred in not declaring the plaintiff corporation non-suited for alleged lack of authority of its representative during the pre-trial and in denying the defendant’s petition to set aside the compromise judgment.

RULING

The Supreme Court affirmed the appealed orders. The Court held that the matter of corporate representation was not a controlling consideration for the compromise agreement, as the defendant was aware of the power of attorney presented at the pre-trial and did not allege any prejudice from the supposed lack of authority. The defendant’s consent to the agreement was not obtained by fraud. Furthermore, the general manager’s authority to execute trading contracts for the corporation implied the power to seek judicial redress for their breach. Even assuming a defect in authority, the plaintiff corporation’s subsequent submission of the detailed statement of account constituted an adoption and ratification of the compromise, curing any prior defect. The trial court did not abuse its discretion in not declaring the plaintiff non-suited. Additionally, the defendant’s petition to set aside the judgment was filed out of time, as it was not filed within sixty days after she learned of the judgment, as required by Section 3, Rule 38 of the Rules of Court. The Court imposed treble costs against the appellant’s counsel.