WOODCHILD HOLDINGS, INC.

, petitioner,

vs.

ROXAS ELECTRIC AND CONSTRUCTION COMPANY, INC., respondent.

FACTS:

The respondent Roxas Electric and Construction Company, Inc. (RECCI) was the owner of two
parcels of land, identified as Lot No. 491-A-3-B-1 covered by Transfer Certificate of Title (TCT) No. 78085
and Lot No. 491-A-3-B-2 covered by TCT No. 78086. A portion of Lot No. 491-A-3-B-1 which abutted Lot
No. 491-A-3-B-2 was a dirt road accessing to the Sumulong Highway, Antipolo, Rizal. At a special meeting
on May 17, 1991, the respondent’s Board of Directors approved a resolution authorizing the corporation,
through its president, Roberto B. Roxas, to sell Lot No. 491-A-3-B-2 covered by TCT No. 78086, with an
area of 7,213 square meters, at a price and under such terms and conditions which he deemed most
reasonable and advantageous to the corporation; and to execute, sign and deliver the pertinent sales
documents and receive the proceeds of the sale for and on behalf of the company.

In a Letter to Roxas datedJune 21, 1991, WHI President Jonathan Y. Dy offered to buy Lot No. 491-
A-3-B- 2 for P1,000 per square meter or at the price of P7,213,000. Among the terms agreed was in the
event that the right of way is insufficient for the buyer’s purposes the seller agrees to sell additional square
meter from his current adjacent property to allow the buyer to full access and full use of the property.

Dy and Roxas discussed the need of the WHI to buy a 500-square-meter portion of Lot No. 491- A-
3-B-1 covered by TCT No. 78085 as provided for in the deed of absolute sale. However, Roxas died soon
thereafter. On June 17, 1992, the WHI filed a complaint against the RECCI with the Regional Trial Court of
Makati, for specific performance and damages. RTC rendered its decision in favor of petitioner. CA
reversed.

ISSUE:

WON Roberto Roxas, the President of RECCI, has the power to sell portion of Lot No. 491-A-3-B-
1, or to grant an option to the petitioner to buy a portion thereof?

HELD:

No. Evidently, Roxas was not specifically authorized under the said resolution to grant a right of
way in favor of the petitioner on a portion of Lot No. 491-A-3-B-1 or to agree to sell to the petitioner a
portion thereof. The authority of Roxas, under the resolution, to sell Lot No. 491-A-3-B-2 covered by TCT
No. 78086 did not include the authority to sell a portion of the adjacent lot, Lot No. 491-A-3-B- 1, or to
create or convey real rights thereon. Neither may such authority be implied from the authority granted to
Roxas to sell Lot No. 491-A-3-B-2 to the petitioner “on such terms and conditions which he deems most
reasonable and advantageous.”

A corporation is a juridical person separate and distinct from its stockholders or members.
Accordingly, the property of the corporation is not the property of its stockholders or members and may
not be sold by the stockholders or members without express authorization from the corporation’s board of
directors. A corporation may act only through its board of directors or, when authorized either by its by-
laws or by its board resolution, through its officers or agents in the normal course of business. Generally,
the acts of the corporate officers within the scope of their authority are binding on the corporation.
However, under Article 1910 of the New Civil Code, acts done by such officers beyond the scope of their
authority cannot bind the corporation unless it has ratified such acts expressly or tacitly, or is estopped
from denying them. Thus, contracts entered into by corporate officers beyond the scope of authority are
unenforceable against the corporation unless ratified by the corporation.

Under paragraph 12, Article 1878 of the New Civil Code, a special power of attorney is required to
convey real rights over immovable property. Article 1358 of the New Civil Code requires that contracts
which have for their object the creation of real rights over immovable property must appear in a public
document. validly grant a right of way and agree to sell a portion of Lot No. 491-A-3-B-1. The rule is that if
the act of the agent is one which requires authority in writing, those dealing with him are charged with
notice of that fact.