People'S Aircargo v. Court of Appeals

Summary

Supreme Court case involving corporate authority and contract enforcement. People's Aircargo's president entered consulting contracts with Stefani Saño without board approval. Saño prepared operations manual and conducted employee training, enabling the corporation to obtain customs warehouse license. When corporation refused payment claiming lack of authorization and contract simulation, Saño sued for collection. Trial court found contract unenforceable but awarded P60,000 for unjust enrichment. Court of Appeals reversed, awarding full P400,000, finding valid contract and apparent authority. Supreme Court affirmed, establishing that corporate presidents can bind corporations through apparent authority derived from prior similar acts and corporate ratification through acceptance of benefits. The decision strengthens doctrine that corporations cannot deny authority they previously clothed officers with, protecting third parties who rely on apparent corporate authority.