ABS CBN v CA Facts: ABS-CBN and VIVA agreed to a Film Exhibition Agreement.

Viva allowed ABS-CBN exclusive rights to show some Viva Films on their network. In 1991, Viva through Vic Del Rosario offered 3 film packages which had 36 movies. However, ABS-CBN through Charo-Santos Concio refused the offer stating that out of the 36 movies, she could only pick 10 movies that ABS-CBN would like to air (including Maging Sino Ka Man). Charo Santos wrote an informal letter of refusal to Vic. After the refusal, Vic approached Charo Santos and offered a new list consisting of Original (unaired) movies (14 of which are subject of the case) as well as 104 re-runs. ABS-CBN would pick 52 titles from the re-runs and will be given rights over the 52 unaired movies for P60million. In 1992, Eugenio Lopez (GM) met with Del Rosario at the Tamarind Grill in QC to discuss the proposal. Lopez claimed that Del Rosario agreed to grant exclusive film rights to 14 Viva Films for P36million (this agreement was allegedly written on a piece of napkin). Del Rosario denied this and claimed that Lopez promised a counter-proposal to Vivas original offer. After ABS rejection of the offer, Del Rosario went to Republic Broadcasting Corp Senior Vp for Finance Graciano Gozon to offer to sell the 104 films. Del Rosario also received a handwritten note from Charo which contained a draft of the counter-offer. It covered only 52 films from the list and one film added by Charo for P35million. This was rejected by Vivas board of directors on the same day. After a series of meetings, Del Rosario and Viva President Teresita Cruz granted exclusive rights to 104 films to RBS. ABS-CBN moved for an injunction to prevent the airing of RBS of the 14 films subject of the case. They tried to have an amicable settlement but the parties could not come to an agreement. A temporary restraining order was issued against RBS upon ABS payment of a bond, however, RBS was able to pay a counter-bond. ABS questioned the granting of a counterbond to RBS and thereby raised it to the CA praying for issuance of a preliminary injunction. CA decided it was a premature issue and dismissed the petition. In the meantime, RTC decided against ABS CBN and ordered ABS to pay RBS and Viva. RTC stated that there was no meeting of minds on the price and terms of the offer between Viva and ABS. The alleged agreement between Lopez and del Rosario was still subject to approval of the board of directors of Viva. CA affirmed decision of RTC. ISSUE: Was there a perfected contract? RULING: NONE In the case at bar, ABS-CBN made no unqualified acceptance of VIVAs offer hence, they underwent period of bargaining. ABS-CBN then formalized its counter-proposals or counter-offer in a draft contract. VIVA through its Board of Directors, rejected such counter-offer. Even if it be conceded arguendo that Del Rosario had accepted the counter-offer, the acceptance did not bind VIVA, as there was no proof whatsoever that Del Rosario had the specific authority to do so. Under the Corporation Code,i[46] unless otherwise provided by said Code, corporate powers, such as the power to enter into contracts, are exercised by the Board of Directors. However, the Board may delegate such powers to either an executive committee or officials or contracted managers. The delegation, except for the executive committee, must be for specific purposes.ii[47] Delegation to officers makes the latter agents of the corporation; accordingly, the general rules of agency as to the binding effects of their acts would apply.iii[48] For such officers to be deemed fully clothed by the corporation to exercise a power of the Board, the latter must specially authorize them to do so. that Del Rosario did not have the authority to accept ABS-CBNs counter-offer was best evidenced by his submission of the draft contract to VIVAs Board of Directors for the latters approval. In any event, there was between Del Rosario and Lopez III no meeting of minds. The following findings of the trial court are instructive:
Q A Q A Q A Q A Now, Mr. Witness, and after that Tamarinf meeting the second meeting wherein you claimed that you have the meeting of the minds between you and Mr. Vic del Rosario, what happened? Vic Del Rosario was supposed to call us up and tell us specifically the result of the discussion with the Board of Directors. And you are referring to the so-called agreement which you wrote in [sic] a piece of paper? Yes, sir. So, he was going to forward that to the board of Directors for approval? Yes, sir (Tsn, pp. 42-43, June 8, 1992) Did Mr. Del Rosario tell you that he will submit it to his Board for approval? Yes, sir.

Mr. Lopez shows beyond doubt that he knew Mr. Del Rosario had no authority to bind Viva to a contract with ABS-CBN until and unless its Board of Directors approved it. The complaint, in fact, alleges that Mr. Del Rosario is the Executive Producer of defendant Viva which is a corporation. (par. 2, complaint). As a mere agent of Viva, Del Rosario could not bind Viva unless what he did is ratified by its Directors. As a mere agent, recognized as such by plaintiff, Del Rosario could not be held liable jointly and severally with Viva and his inclusion as party defendant has no legal basis.