Republic v. Acoje Mining Co.

Facts:
-

Acoje Mining wrote the Director of Posts requesting the opening of a post,
telegraph and money order offices at its mining camp at Zambales for the
use of its employees and their families living in said camp
the Director of Posts obliged on the condition that the company assume
direct responsibility for whatever pecuniary loss may be suffered by the
Bureau of Posts by reason of any act of dishonesty, carelessness or
negligence on the part of the employee of the company who is assigned to
take charge of the post office
Board of Directors of Acoje passed a resolution stating that:
o That the requirement of the Bureau of Posts that the Company should
accept full responsibility for all cash received by the Postmaster be
complied with, and that a copy of this resolution be forwarded to the
Bureau of Posts."
Post Office branch was opened but after five years, the postmaster, an
employee of Acoje, went on a 3-day leave and never returned
Acoje informed the Manila Post Office of the incident and upon making an
audit, it was found that 13k was missing
Post Office demanded payment from Acoje Mining and filed a suit with the CFI
Manila
Acojes Defenses:
o Boards act in assigning a postmaster was ultra vires; and
o companys liability was merely that of a guarantor
CFI ruled in favor of Post Office but awarded only 9k as supported by
evidence

Issue:
w/n the acts of Acojes Board of Directors was ultra vires
w/n its liability is merely that of a guarantor
Held:
1. No, the act covers a subject which concerns the benefit, convenience, and
welfare of the companys employees and their families. An ultra vires act if one
committed outside the object for which a corporation is created as defined by the
law of its organization and therefore beyond the powers conferred upon it by law.
However, there are certain corporate acts that may be performed outside of the
scope of the powers expressly conferred if they are necessary to promote the
interests or welfare of the corporation. Establishment of the local post office is a
reasonable and proper adjunct to the conduct of the business.
Moreover, an ultra vires act is merely voidable, in contrast to illegal acts which are
void. It may be enforced by performance, ratification or estoppel. Here it is fair that
the resolution be upheld at least on the ground of estoppel since the company at
least benefited from the transaction.

2. No, the terms employed in the resolution are clear and sweeping. Acoje assumed
full responsibility for all cash received by the Postmaster. Its liability is that of a
principal.