Yao Ka Sin Trading v. Honorable Court of Appeals

Summary

This case involved a contractual dispute over a letter-offer for cement sales between Yao Ka Sin Trading and Prime White Cement Corporation. The corporate president signed the contract without board authorization, which was later disapproved. The Supreme Court held the contract unenforceable under Civil Code Article 1317, ruling that corporate officers cannot bind corporations without proper authority from the board of directors. The Court emphasized that apparent authority must be proven through evidence of similar past conduct, which was lacking. The decision reinforced corporate governance principles requiring board approval for significant contracts and clarified rules on corporate agency relationships in commercial transactions.