PEOPLES 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 International Airport 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 respondents services because of the latters membership in the task force, which was supervising the transition the bureau 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 Punsalans 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 companys employees. On January 10, 1987, Andy Villaceren, vice-president of petitioner, received the operations manual prepared by respondent. Petitioner submitted said operations manual to the bureau of customs in connection with the formers 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 latters employees. ISSUE: WON PETITIONER MAY VALIDLY DENY THE DEMAND THE PAYMENT MADE BY PRIVATE RESPONDENT SUNO, ON THE GROUND THAT SECOND CONTRACT WAS ENTERED 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.