5 Litonjua Jr. v. Eternit Corp.

Facts:
Eternit Corp manufactures roofing and pipe products - owns 47K Sq. m. land in
Mandaluyong
90% of shares owned by Eteroutremer S.A. Corp. laws of Belgium
Glanville - GM and president of EC
Delsaux - Regional Director for Asia of ESAC
1986 - Marcos destabilization - Committee for ESAC instructed Adams, member of
ECs BOD to dispose of the land
Adams engaged broker Marquez to oer sale to buyers - he oered to Litonjua
Authorized to sell for Php 27M
Litonjua counteroered Php 20M
Marquez informed Glanville and Delsaux of the counter oer, Delsaux did not
respond
Glanville telexed Delsaux who counteroered USD 1M and Php 2.5M to cover all
existing obligations
Marquez informed Litonjua who accepted Delsaux oer
Litonjua deposited USD 1M
Glanville confirmed then sent a letter on May 1987 saying that the sale would no
longer push through - BOD denied sale
Litonjuas demanded damages
RTC found for EC - no board resolution, Glanville and Delsaux were not authorized by
the BOD
CA armed
Issues:
W.O.N. the sale is valid
No - petitioners failed to prove that Adams, Glanville and Delsaux or Marquez
were empowered to sell the properties
Agency must be established by clear, certain and specific proof
Sec. 23 of Corp Code of the Phils - The Board of Directors or Trustees.
Unless otherwise provided in this Code, the corporate powers of all
corporations formed under this Code shall be exercised, all business
conducted and all property of such corporations controlled and held by
the board of directors or trustees to be elected from among the holders of
stocks, or where there is no stock, from among the members of the
corporation, who shall hold oce for one (1) year and until their
successors are elected and qualified
Sec. 23 of Corp Code of the Phils - Corporate powers and capacity.
Every corporation incorporated under this Code has the power and
capacity: To purchase, receive, take or grant, hold, convey, sell, lease,
pledge, mortgage and otherwise deal with such real and personal
property, including securities and bonds of other corporations, as the

transaction of a lawful business of the corporation may reasonably and

necessarily require, subject to the limitations prescribed by the law and
the Constitution
Property of a corporation is not the property of the stockholders, it cannot
be sold without express authority by the BOD
Absent valid delegation/authorization by the BOD, declarations of an
individual director are not binding on the corporation - Final say will
always be with the BOD
Any sale is void unless ratified expressly or impliedly by the BOD
When a sale of a piece of land or any portion thereof is through an agent,
the authority of the latter shall be in writing, otherwise, the sale shall be
void
Delsaux counteroer was only from a Belgian/Swiss decision and not
the BOD, EC was not bound by such acceptance
BOD resolution is a sine qua non to bind EC
Persons dealing with an assumed agent are bound at their peril, they
should ascertain the fact of agency - Petitioners failed to discharge the
burden
No damages awarded
W.O.N. EC is in estoppel
No - no proof of reliance upon the representations that predated the action taken
in reliance
Glanville and Delsaux declared they were acting for and in behalf of
ESAC, not EC